topic Re: Spree Penalty in Understanding FICO® Scoring

Spree Penalty

Curious_George2 — Tue, 09 Feb 2021 16:21:20 GMT

I was reading through @Anonymous's Scoring Primer and I noticed that not much is known with certainty about the Spree Penalty. This is the point deduction associated with a reason that says "You've recently opened too many new credit accounts." I am currently seeing it on EX2, EX BC2 and EX AU2.

I'm on a mature scorecard -- AoOA is over 26 years -- so the theory that this penalty only affects young profiles is not correct, at least for EX2 and its industry variants.

Here are the new accounts I have:

Student loan (refi) opened Feb. 2020 (current age, 12 mo)
Amex Delta SkyMiles opened Mar. 2020 (11 mo)
NFCU Platinum opened Apr. 2020 (10 mo)
DCECU Low Rate Visa opened Apr. 2020 (10 mo)
NFCU Auto loan opened Jun. 2020 (8 mo) (now closed)

(The date on which I get my 3B updates is the 28th, so my most recent one from Jan. 28 would have had all the ages one month less than what's shown above.)

On EX2, the spree penalty is reason #3, ahead of missed payments (?!), which is in the fourth position. I have a 30D from 2017, which is my lone baddie. Here's a pic:

EX2 Reasons, 1/28/2021

On EX AU2, it is in fourth position. On EX BC2, it is in third position, ahead of You have too many credit accounts with balances.

As an aside, have other people noticed that on MF, the reasons are sometimes displayed in a different order when viewed under the Reports tab versus the Scores tab? Mine are. When I view EX BC2 under the scores tab, it lists the spree penalty first. That's crazy, so I assume it's wrong. Hopefully the order is correct in the Reports view. Kind of annoying that reason order might not be reliable, since we read meaning into it.

I don't have the spree penalty reason showing anywhere else. It's not on any of my scores other than the Score 2 series, or on either of the other two bureaus. There is some cleanup coming for my profile in the weeks and months ahead, so it's possible the spree penalty reason will percolate up to visibility on some scores.

I'm a little surprised we don't hear more about this penalty, given how common app sprees are around here. Maybe @tcbofade will see it soon.

Does anyone else have DPs to share about this penalty?

Re: Spree Penalty

Anonymous — Tue, 09 Feb 2021 16:39:47 GMT

Those reason statements all seem out of order to me. A lone 30D baddie on an otherwise clean/mature file from what I've seen if it ages off naturally is usually good for around 25-30 points. That being in your 4th slot is suggestive that the other 3 factors are impacting your scores more than that, which to me simply doesn't sound right. Anyone else have comments on that?

Re: Spree Penalty

Curious_George2 — Tue, 09 Feb 2021 17:02:07 GMT

I had the same thought. The score associated with that set of reasons is 766. That makes the math challenging, because EX2 maxes out at 844, right? So I'm only losing 78 points, total.

Generally my scores and reasons are consistent with the conventional wisdom that a 30D costs at least 25-30 points. Is it possible there is a smaller penalty for a lone, aged 30D on the EX2 model?

Re: Spree Penalty

Anonymous — Tue, 09 Feb 2021 18:36:59 GMT

While it has a maximum number that doesn’t mean there’s not a buffer beyond that. I’ll be right back

Re: Spree Penalty

Anonymous — Tue, 09 Feb 2021 19:05:47 GMT

So you have code 9 and you have code 30 for EX2. Typically when something says too many, one can be too many. However, here we have 2 separate codes indicating a difference between a new account or many new accounts.

I would love to hear from someone who has code 9: time too recent since new account opened. I’d like to know at what point it switches over to too many.

And you’re right we don’t know whole lot about it. It’s very strange that you have reason codes in different orders. The order is significant we need to get to the bottom of that.

Re: Spree Penalty

Anonymous — Tue, 09 Feb 2021 19:17:12 GMT

@Curious_George2 wrote:

Generally my scores and reasons are consistent with the conventional wisdom that a 30D costs at least 25-30 points. Is it possible there is a smaller penalty for a lone, aged 30D on the EX2 model?

If we're going under the assumption that the reason statements are in order of importance, I'd say the penalty must be less on EX2 relative to F8.

Do we have any data points out there on the EX2 gain associated with the dropoff of an aged lone minor?

BM, have we seen many profiles that have pinned the needle on EX2 / potential buffer in place? I personally haven't, but I haven't exactly been looking either. I've always understood it that buffer was more of a factor on F8 and newer models.

Re: Spree Penalty

Anonymous — Tue, 09 Feb 2021 19:55:53 GMT

To be honest I do not know. I’m just aware that there could be a buffer. I haven’t looked for them either.

Whenever they added the two scorecards to 8, I think it was so they could impose a greater penalty on recent delinquencies and less on older ones, I think. So I’m not sure which would have a greater increase.

Re: Spree Penalty

Curious_George2 — Tue, 09 Feb 2021 20:16:13 GMT

@Anonymous wrote:
While it has a maximum number that doesn’t mean there’s not a buffer beyond that. I’ll be right back

Interesting. I assumed that any score model that has a real-world max of less than 850 (or 900 where applicable) doesn't have buffers.

If that assumption is wrong, how would buffers work? And why would they develop a scoring system that initially purports to have a max of 850, but that imposes internal buffers to preclude any score higher than, in this case, 844?

That seems so unlikely that until I see evidence of it, I'm going to stick with my prior assumption that EX2 and other scores with real world maxes below their theoretical max don't have buffers.

Re: Spree Penalty

Anonymous — Tue, 09 Feb 2021 21:19:28 GMT

I'm not sure I've ever even seen an EX2 of 844. There are definitely scores out there that are much more difficult to achieve the ceiling on, such as EQ BCE8. I would naturally theorize that the more difficult it is to achieve the ceiling on any given model, the more difficult it would be to have any buffer built into that ceiling score.

In order to know if there's any buffering capability on an EX2 844 score, the first step would be to talk to some people with EX2 844 scores, if they're somewhere on this forum.

Re: Spree Penalty

tcbofade — Tue, 09 Feb 2021 21:57:21 GMT

None of my new accounts have shown up on my CRAs yet... and I already have it.

Re: Spree Penalty

Anonymous — Tue, 09 Feb 2021 22:31:43 GMT

How many new accounts do you have currently in say the last 12/24 months and do you recall at what point that negative reason statement appeared relative to those accounts?

Re: Spree Penalty

tcbofade — Wed, 10 Feb 2021 00:30:21 GMT

0/12, 5/24.

No idea when that reason showed up.

As mentioned, there is about to be a stack of new accounts reporting...

Re: Spree Penalty

Anonymous — Wed, 10 Feb 2021 04:17:57 GMT

@tcbofade wrote:
0/12, 5/24.

No idea when that reason showed up.

As mentioned, there is about to be a stack of new accounts reporting...

@tcbofade how many new accounts do you have in the last 17 months? And how many new revolvers?

Maybe @Thomas_Thumb would be kind enough to enlighten us more on buffers?

Re: Spree Penalty

Curious_George2 — Wed, 10 Feb 2021 04:39:13 GMT

@tcbofade wrote:
None of my new accounts have shown up on my CRAs yet... and I already have it.

I didn't mean to stalk you, but I think I recall that your tally of new accounts this month includes a mortgage refi, a personal loan and three cards. And you had no new accounts of any kind for at least a year before that, right? None of the new accounts appear on EX yet, but you are already being penalized for the spree? That's... perplexing. Maybe this is one of those CRA front end lag situations where things are just off by a day or two.

Or, as Birdman and BBS's questions hint, maybe this reason is still haunting you from a spree more than a year ago. Such a lengthy intreperation of the word "new" would be surprising, but less problematic than time-travel.

Re: Spree Penalty

Anonymous — Wed, 10 Feb 2021 04:58:13 GMT

@Curious_George2 wrote:
@tcbofade wrote:
None of my new accounts have shown up on my CRAs yet... and I already have it.

I didn't mean to stalk you, but I think I recall that your tally of new accounts this month includes a mortgage refi, a personal loan and three cards. And you had no new accounts of any kind for at least a year before that, right? None of the new accounts appear on EX yet, but you are already being penalized for the spree? That's... perplexing. Maybe this is one of those CRA front end lag situations where things are just off by a day or two.

Or, as Birdman and BBS's questions hint, maybe this reason is still haunting you from a spree more than a year ago. Such a lengthy intreperation of the word "new" would be surprising, but less problematic than time-travel.

@Curious_George2 The threshold for new account segmentation on the mortgage Scores is more than the 12 months it is with 8/9. I have a data point of 17 months for EX2. I am currently letting time go by waiting for the code to drop myself.

The additional complication is we have not conclusively determined whether or not the mortgage Scores segment only on revolvers or if all new accounts segment on the mortgage Scores.

it appears that loans may cause new account segmentation on the mortgage Scores as well, but not sure. If we could get some more people to contribute data points hopefully we can learn.

Re: Spree Penalty

Curious_George2 — Wed, 10 Feb 2021 05:05:03 GMT

I see. That makes sense. Thanks!

Re: Spree Penalty

Curious_George2 — Wed, 10 Feb 2021 05:45:15 GMT

@Anonymous wrote:

And you’re right we don’t know whole lot about it. It’s very strange that you have reason codes in different orders. The order is significant we need to get to the bottom of that.

The plot has thickened. I can see multiple instances of reasons being displayed in different orders, depending on the path taken. It's currently happening to me on EX AU2, EX BC2 and TU AU4. I haven't ruled out others.

In the spirit of "pics or it didn't happen"...

Left: MF Reports. Center: MF Scores. Right: Experian. All: Reasons for my EX AU2 score today.

As you can see, myFICO orders my EX AU2 reasons differently under the Reports tab (left) than it does under the Scores tab (center). Experian's app (right) agrees with the MF Scores ordering.

One innocuous explanation for the variable ordering is that there could be ties. If multiple factors cost the same number of points, their ordering could be done differently by different portions of the front-end code without violating the principle of sorting by decreasing magnitude.

Re: Spree Penalty

Anonymous — Wed, 10 Feb 2021 06:36:03 GMT

@Curious_George2 wrote:
@Anonymous wrote:

And you’re right we don’t know whole lot about it. It’s very strange that you have reason codes in different orders. The order is significant we need to get to the bottom of that.
The plot has thickened. I can see multiple instances of reasons being displayed in different orders, depending on the path taken. It's currently happening to me on EX AU2, EX BC2 and TU AU4. I haven't ruled out others.

In the spirit of "pics or it didn't happen"...
Left: MF Reports. Center: MF Scores. Right: Experian. All: Reasons for my EX AU2 score today.
As you can see, myFICO orders my EX AU2 reasons differently under the Reports tab (left) than it does under the Scores tab (center). Experian's app (right) agrees with the MF Scores ordering.

One innocuous explanation for the variable ordering is that there could be ties. If multiple factors cost the same number of points, their ordering could be done differently by different portions of the front-end code without violating the principle of sorting by decreasing magnitude.

@Curious_George2 sorry to ask, but is your 3B on the left from the same date as the alert in the center?

Re: Spree Penalty

Curious_George2 — Wed, 10 Feb 2021 06:52:44 GMT

Left and center are from the same date, Jan. 28. Maybe we use the term differently, but I wouldn't say the center one is from an alert. It is from the Scores tab, dated as of my monthly 3B update that day. I'm putting a screen snip below of the desktop view to show what I mean.

Technically, the one on the right, from Experian's app, is from today (I don't know how to change the date in their mobile app), but I checked and it's identical today to what it was on Jan. 28.

So, effectively, they are all from Jan. 28.

Re: Spree Penalty

Anonymous — Wed, 10 Feb 2021 08:41:05 GMT

@Curious_George2 wrote:
Left and center are from the same date, Jan. 28. Maybe we use the term differently, but I wouldn't say the center one is from an alert. It is from the Scores tab, dated as of my monthly 3B update that day. I'm putting a screen snip below of the desktop view to show what I mean.

Technically, the one on the right, from Experian's app, is from today (I don't know how to change the date in their mobile app), but I checked and it's identical today to what it was on Jan. 28.

So, effectively, they are all from Jan. 28.

@Curious_George2 no we don't use the terms differently, I just didn't know what I was talking about. Now I see what you're talking about. Lol.

if they're from the same day bureau and Version, they should be in the same order. And it's important that they be in the correct order, since they are listed in order of precedence.

Maybe you should do a post in the technical help thread or call customer service because something doesn't add up there.