topic Re: We’re Tom Quinn & Tommy Lee - FICO Score Experts! Ask us anything. in Understanding FICO® Scoring

We’re Tom Quinn & Tommy Lee - FICO Score Experts! Ask us anything.

gdale6 — Fri, 18 Sep 2020 19:41:19 GMT

I am Tom Quinn, Vice President of Scores at FICO and I am Tommy Lee, Director of Analytics Science at FICO. Ask us anything. We’ll be taking questions until 4:30pm ET on September 16th and we will post answers later that day.

In order to keep the Q&A valuable to all members, please refrain from asking questions specific to your credit situation.

**Answers start on page 7!**

Re: We’re Tom Quinn & Tommy Lee - FICO Score Experts! Ask us anything.

Brian_Earl_Spilner — Thu, 10 Sep 2020 14:09:08 GMT

Hi, why are we penalized for not carrying debt?

Re: We’re Tom Quinn & Tommy Lee - FICO Score Experts! Ask us anything.

Anonymous — Thu, 10 Sep 2020 14:10:45 GMT

Wow thank you for this rare opportunity!

Can you say anything about the algorithm(s) that determine the score impact of a chapter 7 bankruptcy over time, say 1 year, 2 years, 18 months, 3 years etc until 10 years when it falls off? Often in Adverse Action letters, the language uses "recent" to describe a derogatory account/record, eg, "you have has a recent bankruptcy." I never know what that means, exactly.

So, I'd like to know more about what "recent" means and how the impact of my BK7 influences scores over time, so that I can plan future credit applications, eventual property acquisition, and other important financial decisions.

thank you!!!

Re: We’re Tom Quinn & Tommy Lee - FICO Score Experts! Ask us anything.

Credit12Fico — Thu, 10 Sep 2020 14:20:27 GMT

With all other things being equal, is a person with $400 of debt and 30% aggregate utilization scored the same as a person with $40,000 of debt and 30% aggregate utilization? In other words, does the dollar amount of debt (as opposed to the % utilization) impact the Fico scores in any way? This is not well understood but many of us here would love an answer on this. It's been one of the more elusive topics on the forum.

Re: We’re Tom Quinn & Tommy Lee - FICO Score Experts! Ask us anything.

Slabenstein — Thu, 10 Sep 2020 14:19:28 GMT

I have a couple that I've been wondering about:

1) What are the segmentation factors among the four dirty scorecards in FICO8?

2) What would an ideal or maximal profile look like with regards to credit mix in FICO8? What would distinguish a profile that was very good from one that was exceptional, in this regard? The algorithm appears to want more than just having an installment and a few revolvers.

Thank you!

Re: We’re Tom Quinn & Tommy Lee - FICO Score Experts! Ask us anything.

Brian_Earl_Spilner — Thu, 10 Sep 2020 14:26:26 GMT

Another question always asked here, which has a greater weight, chargeoffs with a balance or collections with a balance? Basically, which should be paid first for the most improvement?

Re: We’re Tom Quinn & Tommy Lee - FICO Score Experts! Ask us anything.

Anonymous — Sun, 13 Sep 2020 15:00:23 GMT

Is there anything you are able to say about the accuracy/predictiveness of the FICO score, e.g. "for every X point reduction in score below a threshold, issuers experience defaults within 2 years at Y%?" And each new version is an attempt to improve on this, or are there other metrics issuers look at in evaluating whether to buy the scores?

Thanks

Re: We’re Tom Quinn & Tommy Lee - FICO Score Experts! Ask us anything.

TSlop — Fri, 11 Sep 2020 00:48:12 GMT

How accurate/reliable are the free FICO scores that are offered by many credit cards, such as Chase Credit Journey and Discover FICO Credit Scorecard? Are they even close to real scores if I were to request them from the bureaus?

Re: We’re Tom Quinn & Tommy Lee - FICO Score Experts! Ask us anything.

K-in-Boston — Thu, 10 Sep 2020 15:00:23 GMT

Thank you Tom and Tommy for this wonderful opportunity. Due to the way that different credit monitoring front-ends display both revolving utilization and total revolving credit limits differently in some cases, there has always been some confusion over how certain accounts are treated by FICO scoring models.

a.) Can you clarify whether closed revolving credit accounts reporting both a balance and a credit limit are indeed essentially treated the same as open revolving accounts until they reach a $0 balance for the purposes of both individual account and aggregate revolving utilization, particularly for FICO 8?

b.) Can you can confirm whether revolving HELOC accounts and revolving credit card accounts with very large reported limits ($100k+ for example) are weighted the same as smaller revolving accounts individually (i.e. does a $150k balance on a $200k HELOC carry the same weight as a $15k balance on a $20k limit credit card?) and whether they are weighted the same, or even factored in at all, for aggregate revolving utilization, particulary for FICO 8?

Re: We’re Tom Quinn & Tommy Lee - FICO Score Experts! Ask us anything.

BmoreBull — Thu, 10 Sep 2020 16:14:12 GMT

Thank you for taking the time to try and answer our questions. My question is, does a paid charged off account affect you negatively for the entire 7 years that it's on your reports? Or does the effect lessen over time, like a 30 or 60 day late does? Thank you again.

Re: We’re Tom Quinn & Tommy Lee - FICO Score Experts! Ask us anything.

Anonymous — Thu, 10 Sep 2020 16:20:31 GMT

If I have 10 cards with a total credit line of 100K and I carry 8K of debt all on one card that has a CL of 8.5K, why does my score suffer so much, whereas if I spread that 8K of debt evenly on my 10 cards, my score does not take such a hit? I would think spreading it over 10 cards is more risky, if you add up the minimum payments of all 10 cards vs the minimum payment on 1 card. The monthly commitment would be higher spread over 10 cards.

Re: We’re Tom Quinn & Tommy Lee - FICO Score Experts! Ask us anything.

Anonymous — Thu, 10 Sep 2020 16:33:56 GMT

Is there a reason why scoring is purposely made difficult and confusing for the average consumer, or why there needs to be 40 different versions in additoon to the internal scoring of a particular Lender?

Couldn't it all be made much simpler instead of other reasons that are driven by Money?

Re: We’re Tom Quinn & Tommy Lee - FICO Score Experts! Ask us anything.

Dmessina666 — Thu, 10 Sep 2020 17:45:52 GMT

First off, thank you guys for doing this. My question is this.........

When Paid Charge-off accounts are just sitting there waiting to age off, and a consumer decides they want to dispute for whatever reason, the account is updated and effectively penalized their score and makes it seem like the derogatory account fresh and new???

Ive done this, unknowingly, and it wiped away my previous 37 months of on-time payments with Equifax. Thanks!

Re: We’re Tom Quinn & Tommy Lee - FICO Score Experts! Ask us anything.

SecretAzure — Thu, 10 Sep 2020 18:14:26 GMT

Why isn't there a guaranteed, positive path into the FICO scoring system for those with no credit?
- Why do we rely on third parties (Capital One, Discover, Credit Unions, etc.) to be the ultimate deciding factor on whether one will start off on the right foot or the wrong?

Re: We’re Tom Quinn & Tommy Lee - FICO Score Experts! Ask us anything.

Remedios — Thu, 10 Sep 2020 18:38:12 GMT

My question is regarding FICO 10

If lenders do not wish or aren't required to provide TD, how will that impact scoring in TD version as it would be based only on fraction of accounts?

Also, if lender doesn't wish to provide TD, are they still going to have access to those reports, even though they "opted out" from providing data that contributes to score calculations?

Basically, is "they can have it both ways" going to be a new reality.

Thank you

Re: We’re Tom Quinn & Tommy Lee - FICO Score Experts! Ask us anything.

Girlzilla88 — Thu, 10 Sep 2020 18:49:36 GMT

Thank you and Hello!

Why are the penatlys so different between Credit B's if the 'negative marks' are the same for the different ones?! For example EQ may give -10 points for high use while high use on an EX will give -5 or +5 etc why do they affect differently for the same issues?! ((of course random figures just example))

Re: We’re Tom Quinn & Tommy Lee - FICO Score Experts! Ask us anything.

Girlzilla88 — Thu, 10 Sep 2020 18:57:02 GMT

On a different perspective is there anything you know that may be considered Uncommon Knowledge that you wish more people were aware of or knew about?! Some things you may not even know to ask or know until after it is found out (usually by doing something bad/wrong).

Re: We’re Tom Quinn & Tommy Lee - FICO Score Experts! Ask us anything.

SouthJamaica — Thu, 10 Sep 2020 19:51:09 GMT

Questions:

1. Is there a separate revolving utilization scoring factor for "raw dollars" in total limits (as opposed to percentage of limits)? If so, what are the thresholds or breakpoints for this factor?

2. Are there certain breakpoints or thresholds in percentage of aggregate revolving utilization? If so, what are they?

3. Are there certain breakpoints or thresholds in percentage of aggregate installment loan utilization? If so, what are they?

4. Why do one's FICO 8 scores drop when (a) all revolving accounts report a zero balance, and (b) one's only open installment loan is paid off?

5. Is it accurate to say that with respect to a closed revolving account that has a balance, the balance is factored into the aggregate revolving utilization computation, but the limit is not?

Re: We’re Tom Quinn & Tommy Lee - FICO Score Experts! Ask us anything.

Meanmchine — Thu, 10 Sep 2020 20:27:27 GMT

On the same day .......

Why can your FICO8 scores go up and at the same time your FICO9s go down ?

Re: We’re Tom Quinn & Tommy Lee - FICO Score Experts! Ask us anything.

coreysw12 — Thu, 10 Sep 2020 21:44:08 GMT

Why do mortgages still use (very) old FICO 2, 3, and 5 models?

Which carries more weight: utilization of specific credit cards, or overall utlization across all cards?

And finally, is utilization factored into scores by the range it falls into (where any utlization in a certain range, say 20-29%, results in the same score), or is it more linear (where, for example, 26% utilization might result in a higher score than 27%)?