topic Re: Very Interesting. Very, very interesting. FICO score & AU accounts in Understanding FICO® Scoring

Very Interesting. Very, very interesting. FICO score & AU accounts

CH-7-Mission-Accomplished — Tue, 08 Sep 2020 02:18:02 GMT

So I posted last month that my partner's EX FICO 8 dropped from 850 to 834 after one revolver paid off and all that was left reporting was an AMEX. So I wrote it off as AMEX not scoring as a revolver. But then a BofA card reported a small balance and the points were not regained. Then a few days later a third card, a Synchrony Bank Cathay Pacific Visa reported a $5 balance, and at that point the 16 points came back and the score returned to 850.

Well this month the same thing happened. But I noticed something different this time.

The AMEX is an AU from a housemate (from the 1980s). I wasn't sure if when only this AMEX reported if it was not scored for having a balance due to being an AU or due to being an AMEX.

Well then that BofA card reported a small balance again. Once again, the points did not come back. Guess what? That BofA account is also an AU account.

These AU accounts are from the 1980s (we are old) so I have left them alone. But now it dawns on me that FICO 8 is NOT scoring either of these two AU accounts as satisfying the requirement of having at least a small balance report. FICO is ignoring the small balance on these AU accounts. It is inflicting a 16 point penalty on an an otherwise perfect FICO file.

The AAofA is clearly scoring.

I know the 16 points will return as soon as a revolver reports that is not an AU account, but to me this was a light bulb moment.

I can't control the two AU accounts. The AMEX always reports some amount from $300 to $2000 and the BofA AU is normally not used. Utilization is not jumping beyond 1% overall and maybe 10% on the AMEX (limit is 20K).

Thoughts?

Re: Very Interesting. Very, very interesting. FICO score & AU accounts

AllZero — Tue, 08 Sep 2020 02:27:48 GMT

Glad you figured it out. Maybe AU anti abuse algorithm?

As posted below https://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Well-explain-the-16-pt-drop-after-going-from-8-to-7-And-other/m-p/6118298/highlight/true#M175982

@Curious_George2 wrote:
Here's how Birdman explained it in post 3 of the FICO 8 Primer thread:

"C. All Zero Penalty- (AU Test included)

When all revolvers report $0 balance, there is a scoring penalty of ~10-25 points. If one has AU cards (that are not discounted by the anti-abuse algorithm) and they all report $0 balances, the penalty will also occur, indepedently."

There's further discussion of it later in that thread.

Re: Very Interesting. Very, very interesting. FICO score & AU accounts

CH-7-Mission-Accomplished — Tue, 08 Sep 2020 02:32:56 GMT

@AllZero wrote:
Glad you figured it out. Maybe AU anti abuse algorithm?

As posted below https://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Well-explain-the-16-pt-drop-after-going-from-8-to-7-And-other/m-p/6118298/highlight/true#M175982

@Curious_George2 wrote:
Here's how Birdman explained it in post 3 of the FICO 8 Primer thread:

"C. All Zero Penalty- (AU Test included)

When all revolvers report $0 balance, there is a scoring penalty of ~10-25 points. If one has AU cards (that are not discounted by the anti-abuse algorithm) and they all report $0 balances, the penalty will also occur, indepedently."

There's further discussion of it later in that thread.

Oh you are 100% correct. Sometimes we don't actually see what's hapening. My SO has two other BofA accounts so I didn't think about the AU when that one didn't fix things.

So I'm curious, for people who have an AMEX and if it reports a small balance, will it score if they are the primary accountholder?

Forgive me if I'm being stupid. I have over 1000 hours on here but even now miss some stuff.

Re: Very Interesting. Very, very interesting. FICO score & AU accounts

AllZero — Tue, 08 Sep 2020 02:56:32 GMT

@CH-7-Mission-Accomplished wrote:
Oh you are 100% correct. Sometimes we don't actually see what's hapening. My SO has two other BofA accounts so I didn't think about the AU when that one didn't fix things.

So I'm curious, for people who have an AMEX and if it reports a smallreferring balance, will it score if they are the primary accountholder?

Forgive me if I'm being stupid. I have over 1000 hours on here but even now miss some stuff.

It wasn't quite clear how many different AmEx accounts you were referring to in your original post or just that one?

If that AmEx is a charge card, it may not count in FICO 8. It may count in the older scoring models, e.g. EX2, TU4, EQ5. That is why members recommend using a national bank card (revolver) for AZEO.

Thus, when the account holder used their Synchrony Bank Cathay Pacific Visa that they are primary account holder on, they did not receive the All Zero score penalty.

Re: Very Interesting. Very, very interesting. FICO score & AU accounts

AllZero — Tue, 08 Sep 2020 03:22:30 GMT

ETA For FICO 8, maybe, best practice is one primary card reporting a balance and one AU card reporting a balance.

Update: FICO2 experiment (is it worth it?)

Re: Very Interesting. Very, very interesting. FICO score & AU accounts

Anonymous — Tue, 08 Sep 2020 04:03:02 GMT

Great advice above.

The authorized user accounts are being discounted by the anti-abuse portion of the algorithm; they are not counting for anything. He is suffering the all zero penalty because he has no revolver, that is being counted, that has a balance.