topic Re: Change in FICO Algorithm with the New Year? in Understanding FICO® Scoring

Change in FICO Algorithm with the New Year?

Anonymous — Wed, 23 Jan 2008 05:55:05 GMT

On 12/26/07 my score was 726. On 1/5/08 it dropped 29 points to 697. This is by far the largest drop ever, however there was no change in any of my accounts, i.e., no increase in balances, or any other negative event. (I have never had any late payments or collection accounts.) Can anyone here provide any explanation, or even informed speculation, for this large drop in my score when no event occurred that triggered it? There were no other major events for many months before this drop, and my FICO score has been in the range of 720 to over 750 for several years. I am wondering if this score drop may have something to do with the global credit crunch, that is, as credit has dried up generally, perhaps Fair Isaac reconfigured their algorithm after the New Year and my FICO score dropped along with a lot of other peoples'.

Re: Change in FICO Algorithm with the New Year?

Anonymous — Wed, 23 Jan 2008 06:57:39 GMT

Which CRA?

Do you have a lot of authorized user accounts?

Do you have installment accounts (car, personal loan, etc) that are relatively new?

Yes, there is a new model, called FICO-08, was supposed to come out in Sept 2007, Experian was first. But according to what I am seeing, it is not out yet.

Re: Change in FICO Algorithm with the New Year?

haulingthescoreup — Wed, 23 Jan 2008 16:54:18 GMT

Hi, gumshoe --has either your average credit age or overall credit history age changed any, as in increased one year? It almost sound as though you had moved into a new score bucket. We are all grouped into "buckets" (scorepools, scorecards, etc.) with others with similar characteristics, such as how long we've had credit, whether we've had a bankruptcy, whether we had many accounts on our reports or few, and so forth. When your profile changes, and you move into a score bucket, your scores may temporarily drop, because you're being measured against a new set of credit peers.

This happened to me in October and I had what felt like a pretty brutal score drop, after I added on to my husband's 18-year-old Discover card. I was not a happy camper, but I have since regained the lost points and moved beyond where I was. I was able to tell, because I got a scorewatch alert.

Since nothing else has changed on your reports that you can see, this is one rather obscure possiblity. The easy way to check for age change would be to look at two of your reports, the before and after ones, and look on screen 2 where it tells you your positives and negatives. If account age is addressed, it will show your average age and age of oldest account. If either of those figures changed, that might be it. (You can also find the overall credit age on the Credit-at-a-Glance screen.)

That's kind of a wild stab, but so far, no one has found any definite signs that FICO 08 is now in place. I just pulled an EQ score the other day, and my AU account is still being counted for scoring.

Re: Change in FICO Algorithm with the New Year?

Anonymous — Wed, 23 Jan 2008 17:44:27 GMT

Hey Hauling - Can we ask Barry or one of the myfico guys to update us on the latest rollout plan? At least for EX and TU, since EQ won't be playing for awhile.

Thanks.

Re: Change in FICO Algorithm with the New Year?

Anonymous — Wed, 23 Jan 2008 19:34:19 GMT

The admins said they do not display/use a new FICO version on myFICO until 50% of lenders are using it.

The TU score on myFICO is still the 2004 version.

Boscoe wrote:

Hey Hauling - Can we ask Barry or one of the myfico guys to update us on the latest rollout plan? At least for EX and TU, since EQ won't be playing for awhile.

Thanks.

Re: Change in FICO Algorithm with the New Year?

Anonymous — Wed, 23 Jan 2008 20:29:48 GMT

gum - you display all the characteristics of having been bucketed - which is a good thing.

Didn't we hear in Jan. 07, the new model was going to kick in by September 07? And now we are hearing the same thing in Jan. 08.

If I wasn't so cynical, I would think this is just a lot of smoke to get people to remove AU's from their accounts.

Re: Change in FICO Algorithm with the New Year?

Anonymous — Wed, 23 Jan 2008 20:35:30 GMT

Re: "has either your average credit age or overall credit history age changed any, as in increased one year?" A: I turned 50 in mid-December. But it's hard to believe that would lead to such a precipitous drop. Again, there were no significant changes shown on the Score Alert: no new accounts, no new inquiries, no significant balance increases, and certainly no major new items like collection accounts, late payments, etc. As for the age of the accounts, all or virtually accounts are very seasoned. Some are more than 15 years old, and the most recent ones are at least a couple years old. None of them changed recently.

Re: Change in FICO Algorithm with the New Year?

Anonymous — Wed, 23 Jan 2008 20:45:49 GMT

Gumshoe's problem appears to be the same thing that happen to me. My credit score recently dropped 15 points from 720 to 705 and the only balance increase was a $10 charged on a card I don't use that often that was paid off two weeks later. I hardly see $10 dropping a score 15 points but I am only 24 and my credit history is short. It just feels that I keeping doing everything right and getting punished for little things like this because others in my bucket have credit history of 19 years, that means I would have to have opened my first account when I was 5. Ridiculous expectations!

Re: Change in FICO Algorithm with the New Year?

Anonymous — Wed, 23 Jan 2008 21:39:10 GMT

I think we will hear from the AUs when 08 release hits. That the sign I am looking for.

Re: Change in FICO Algorithm with the New Year?

Anonymous — Wed, 23 Jan 2008 23:22:05 GMT

I volunteer to be a guinea pig if F.I. wants to run my file through their new scoring model....as long as the tell me what the score is! lol.

I'm absolutely curious to see the effects of FICO08.

Re: Change in FICO Algorithm with the New Year?

haulingthescoreup — Wed, 23 Jan 2008 23:39:49 GMT

Hooray for gumshoe! There's someone almost as old as I. No, your personal age wouldn't have anything to do with it. But if your oldest account went one year older, and IF that particular age put you in a new bucket, that might account for it. Same with your average age: if it went up a year, and that happened to be a transition point, you would have wound up in a new bucket.

I got re-bucketed when I went from 12 to 18 years of oldest account. I have no idea where that transition point is: 12 changing to 13 years old (or older), 15 to 16 years, etc. But obviously, somewhere between 12 and 18 there is an credit age that re-assigns you.

That's why I asked about the average age and overall age that you might find on screen 2 of your reports. If one of them had changed, that might have triggered a new bucket. If both of them were the same before your score drop and after, then it must be something else.

BTW, around here, we use bucket changes as our version of voodoo spells. When we can't find anything else to explain a big score change, we fall back on buckets. A few of us with Scorewatch are lucky enough to get alerts so that we know exactly what happened. Everyone else has to go with the voodoo, er, bucket change.

Re: Change in FICO Algorithm with the New Year?

haulingthescoreup — Wed, 23 Jan 2008 23:53:05 GMT

@Anonymous wrote:

Gumshoe's problem appears to be the same thing that happen to me. My credit score recently dropped 15 points from 720 to 705 and the only balance increase was a $10 charged on a card I don't use that often that was paid off two weeks later. I hardly see $10 dropping a score 15 points but I am only 24 and my credit history is short. It just feels that I keeping doing everything right and getting punished for little things like this because others in my bucket have credit history of 19 years, that means I would have to have opened my first account when I was 5. Ridiculous expectations!

That does make you pull your hair out, doesn't it?

I doubt that you are in a bucket with those with 19 years or more of credit. Like I said, there are different determinants for your bucket assignment. Yours might be age 5 years or less, or "thin file" (relatively few accounts), or something else that none of us have even thought of. That's the whole point of buckets --you're not being compared to 40 and 50-year-olds half-way through a thirty-year mortgage with a dozen open CC's and another dozen closed. You're being compared with others who match your profile more closely.

Your score drop might well have had nothing to do with a bucket change. For instance, I lost 34 points on TU last week because two CC's reported a balance instead of one. How insane is that? And what really gripes me is that when I had initially gotten only one to report, I had gained 14 points. So that's a net loss of 20 points. I'm waiting to see what I get back if TU ever decides to start reporting again.

What I have to wonder is how much of this seemingly random score movement goes on in the background all the time, and we would never have been aware of it if we hadn't been pulling scores. I try to tell myself that if I'm not actually getting ready to apply for something, it probably doesn't matter. One of those tree falling in the forest with no one to hear things. But it's pretty nerve-wracking if you are in the market for new credit.

Re: Change in FICO Algorithm with the New Year?

RobertEG — Thu, 24 Jan 2008 03:21:32 GMT

Since most who report drops not related directly to changes in their credit report seem to occur when they reach the low to mid 700's, it would appear that the logical explanation is a bucket change, where they are now being run through a whole different scoring algorithm based upon their movement into the "average" FICO score category, which is also in the low 700's. Surprise! . FICO is not generated to be Fair, Dear Isaac. Buckets are aggravating and often illogical, but the principal behind them is sound from the programming point of view, so what we must live with. Buckets, from a mathematical and conveniience perspective, must be based on broad categories with changeovers, and not linearly incremented.comparisons. Otherwise the FICO model would be thousands of times longer in program code. It is business sense,and not simply common sense or fairness to the consumer, that drives much of how the FICO model must operate. Telling FairIsaac to change their algorithms based on perceived unfairness to the consumer is like telling Donald Trump to take a part time job at McDonalds.

Message Edited by RobertEG on 01-23-2008 07:21 PM

Re: Change in FICO Algorithm with the New Year?

Gigi77 — Thu, 24 Jan 2008 05:25:27 GMT

Yep- this happened to me as well-- Rebucketted when oldest account hit 13 years this January...

Re: Change in FICO Algorithm with the New Year?

Anonymous — Thu, 24 Jan 2008 16:44:21 GMT

What RobertG said.

Re: Change in FICO Algorithm with the New Year?

haulingthescoreup — Thu, 24 Jan 2008 18:31:43 GMT

@Gigi77 wrote:
Yep- this happened to me as well-- Rebucketted when oldest account hit 13 years this January...

Thanks, Gigi! This is the first post I have read that was able to identify the year that triggered the re-bucket!

Every little scrap of data we can get...

Re: Change in FICO Algorithm with the New Year?

Anonymous — Thu, 24 Jan 2008 19:03:24 GMT

So, if we agree that a re-bucketing occurs at 13 years, are there any further buckets to be moved into, say at year 19, or later?

If 13 and higher is better than 12 and lower, is there another one, i.e. 19+ is better than 18- ????

Re: Change in FICO Algorithm with the New Year?

MidnightVoice — Thu, 24 Jan 2008 19:11:36 GMT

I didn't notice a sigificant change when I went from 19 to 20

Re: Change in FICO Algorithm with the New Year?

haulingthescoreup — Thu, 24 Jan 2008 23:07:22 GMT

@Anonymous wrote:

So, if we agree that a re-bucketing occurs at 13 years, are there any further buckets to be moved into, say at year 19, or later?

If 13 and higher is better than 12 and lower, is there another one, i.e. 19+ is better than 18- ????

Hmmm, the Discover turns 19 this June. I will need to keep an eye on Scorewatch, assuming that TU's failure to update hasn't driven me over the brink by then.

Good question!

Re: Change in FICO Algorithm with the New Year?

Anonymous — Tue, 26 Feb 2008 05:43:12 GMT

The exact same thing happended to me, my FICOS went from 756/754/726 in 9-07 to 728/719/697 in 2-08. The biggest drop being 28 pts. With no changes to my CR's or reason for the FICO drops??? This has dropped my average to far below the magic number of 720. The lender seemed to think "it may be due to a new FICO scoring system that was supposed to begin in 2008". I have never used this site before now, why is it that this site does not have the answer as to whether a new FICO scoring system has gone into effect or not, & what about the new scoring system can cause an unchanged CR to drop so drastically in FICOS, when no changes have occured to cause the drop?? Is that not what this site specializes in. Where do you suppose we can find these answers??? By the way I came into this site via myfico.com, is this still that? Also what is a thread, & what is AU??

Thank You!

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