topic Re: More fun with reason codes in Understanding FICO® Scoring

More fun with reason codes

SouthJamaica — Mon, 01 Apr 2019 15:18:50 GMT

Today my aggregate revolving account utilization in EX is a rounded 11%.

In FICO 8 I have the following positive reason code:

Low revolving credit usage

You've limited the use of your available revolving credit.

Ratio of your revolving balances to your credit limits

11%

FICO® Scores evaluate the total revolving account balances in relation to the total credit limits on those accounts . People who keep their ratio of balances to credit limits low pose less risk to lenders than those with higher ratios.

For FICO High Achievers , the average ratio of the revolving account balances to the credit limits is less than 7%.

And I have the following negative reason code:

High revolving balances

The amount owed on your revolving and/or open-ended accounts is too high.

Total owed on revolving and/or open-ended accounts

$63,863

FICO® Scores evaluate how much is owed on revolving and/or open-ended accounts, such as credit cards. Generally, the more owed on these accounts, the greater the risk posed to lenders.

Note, consolidating or moving debt from one account to another will usually not change the total amount owed.

Most FICO High Achievers owe less than $2500 on revolving and/or open-ended accounts such as credit cards and department store cards.

Re: More fun with reason codes

Anonymous — Mon, 01 Apr 2019 17:05:59 GMT

Looks like you’re giving weight to the idea that BBS (and I think you yourself) discussed in a different thread about at some point, it becomes about the dollar value rather than the percentage. $63k is a small percentage of your lines, but it’s still a lot of money, and it seems that when one reaches the level of credit access you have, they may start to look at dollar value rather than percentage of TCL.

Re: More fun with reason codes

SouthJamaica — Mon, 01 Apr 2019 18:28:30 GMT

@Anonymous wrote:
Looks like you’re giving weight to the idea that BBS (and I think you yourself) discussed in a different thread about at some point, it becomes about the dollar value rather than the percentage. $63k is a small percentage of your lines, but it’s still a lot of money, and it seems that when one reaches the level of credit access you have, they may start to look at dollar value rather than percentage of TCL.

I guess that would resolve the seeming inconsistency, but I don't really think that is the case.

Re: More fun with reason codes

Remedios — Mon, 01 Apr 2019 18:46:01 GMT

You're getting both carrot and a stick with exact same reasons, negatives being antithesis to positive ones.

Seems a bit on multiple personality side

Re: More fun with reason codes

Anonymous — Mon, 01 Apr 2019 19:06:25 GMT

I don’t know what else it could be. Your positive codes indicate that FICO is happy with your UTI percentages but the negative codes talk about excessive usage. Dollar value of the balances is the only way to quantify them other than as a percentage of your TCL. It’s like they’re saying the dollar value of debt looks high, and that’s a negative, even though you’ve been responsible in keeping your UTI percentage low and in check, which they’re giving you credit for in the positive codes.

Re: More fun with reason codes

Anonymous — Tue, 02 Apr 2019 02:43:26 GMT

Let's keep in mind that only negative reason statements are ones that impact FICO scores at least 1 point or more. Positive reason statements are just there for fluff really and may or may not have anything to do with score. For example, the one positive statement says something about revolving credit being 11%, when we all know that 11% aggregate utilization means a scoring penalty is being imposed.

Re: More fun with reason codes

SouthJamaica — Tue, 02 Apr 2019 03:05:27 GMT

@Anonymous wrote:
Let's keep in mind that only negative reason statements are ones that impact FICO scores at least 1 point or more. Positive reason statements are just there for fluff really and may or may not have anything to do with score. For example, the one positive statement says something about revolving credit being 11%, when we all know that 11% aggregate utilization means a scoring penalty is being imposed.

So, i.e., it's only really fun when the negative reason codes are inconsistent Like when I was accused of "High Credit Usage" the day before I was guilty of "Not Using Revolving Credit"

Re: More fun with reason codes

Revelate — Tue, 02 Apr 2019 14:17:46 GMT

+1 BBS: no such thing as a positive reason code.

As for the other high credit usage and no revolving activity , so some account types aren’t counted for some metrics: we knew that anyway the only surprise was the type of accounts that had problems with the all zeros metric.

Shouldn’t be much surprise people find this crap confusing haha, at least there is more transparency than ever before.