topic Thresholds for fico’s rating system in Understanding FICO® Scoring

Thresholds for fico’s rating system

SRT4kid93 — Sat, 02 Nov 2024 18:11:01 GMT

Hey guys,

i wanted to start a thread for some of the know thresholds for ficos rating system (poor, fair, good, very good, exceptional)

as you know each section gets a rating, and while these ratings may seem silly, these ratings greatly impact your score. Whether the affect is directly because of the rating or indirectly I don't know, but I know it has an impact. To give you an idea I have also added my score changes associated with the ratings changes, keep in mind these score changes are specific to my profile.

here are some of the thresholds I have learned recently, feel free to add your own experiences

payment history-

was at good rating- 1 late payment and 50% of accounts paid as agreed

was improved to very good rating when my accounts paid as agreed went from 50% to 75%. Resulted in about 15/20 point increase across the board.

amount of new credit:

Was at fair rating- 2 new accounts in the past year, with newest account under 3 months of age

Improved to good rating once newest account hit 3 months, resulting in increase of about 10 points across all 3 cra's

amount of debt:

Was at very good rating- 4% aggregate utilization ratio, 1/1 accounts with balances

improved to exceptional rating once I added 2 additional accounts and made sure I did AZEO, making totals 1/3 accounts with balances and 1% aggregate utilization ratio. Resulted in about 15/20 point gain

credit age:

good rating- age of oldest account over 7 years, average age of accounts over 4 years

decreased to fair rating once I dropped to 2 years 7 months average age of accounts. So 3 or 4 years average age seems to be the thresholds to go from fair to good. Fair to good change resulted in 10 point gain for me.

credit mix

was at good rating with 1 open credit card and 1 closed auto loan, improved to very good after adding 2 additional credit cards.

Re: Thresholds for fico’s rating system

FlaDude — Mon, 04 Nov 2024 13:25:06 GMT

These ratings are not part of FICO scoring. They are displayed by myFICO and other portals to give you an idea how you stand in each of those categories and are based on whatever criteria each portal uses.

Re: Thresholds for fico’s rating system

Kforce — Mon, 04 Nov 2024 18:41:03 GMT

Like trying to put 10-scale numbers on terms, what is "nice", "hot" , "interesting".

7, 9, 8 or 6, 10, 7.

Re: Thresholds for fico’s rating system

SRT4kid93 — Wed, 06 Nov 2024 20:51:56 GMT

@Kforce @FlaDude

Yes agreed. The score increases were because of the data that caused the rating to change not because of the rating change itself. Example- the fact that my youngest account hit 3 months was the reason for the score change, but this also happened to be a threshold to change your "amount of new credit" from fair to good. Or when my newest accounts got enough age behind them, they became "accounts paid as agreed", improving my payment history from good to very good.

So, now people know that when their newest account hits 3 months, they can expect a score increase, and they now know that it's because their amount of new credit improved. They no longer have to guess as to why the score improvement occurred.

like I said, the ratings themselves maybe not be "directly affecting the score" but they are certainly indirectly affecting the scores and there is absolutely a correlation between your rating and your score.

When my ratings went up so did my score, again, not directly because of the ratings, but that was not the point of this, the point was to try to pinpoint known thresholds in which your ratings change, to try to give people an idea as to when their score may increase and by how much.

because again, there is a correlation. That's all I was trying to point out.

Re: Thresholds for fico’s rating system

Anonymous — Thu, 07 Nov 2024 03:03:16 GMT

The eye-candy fluff "rating system" has absolutely no bearing on your fico scores, metrics, or anything. Not directly and not indirectly. It is a simple attempt to give simple people an idea of where their metrics stand and there is absolutely no way that any amount of score points could be assigned to the "fluffy feel good" system.

It is on par with a "smiley face rating system"

And since you ignore what everyone tells you and you will try yet again to back up your incorrect understanding of anything, I would like you to spend some time googling for answers to this question of yours. You will find nothing about it, and that is because (reread this reply from the beginning.)

Re: Thresholds for fico’s rating system

SouthJamaica — Thu, 07 Nov 2024 05:00:25 GMT

@Anonymous wrote:
The eye-candy fluff "rating system" has absolutely no bearing on your fico scores, metrics, or anything. Not directly and not indirectly. It is a simple attempt to give simple people an idea of where their metrics stand and there is absolutely no way that any amount of score points could be assigned to the "fluffy feel good" system.

It is on par with a "smiley face rating system"

And since you ignore what everyone tells you and you will try yet again to back up your incorrect understanding of anything, I would like you to spend some time googling for answers to this question of yours. You will find nothing about it, and that is because (reread this reply from the beginning.)

Agreed

Re: Thresholds for fico’s rating system

SouthJamaica — Thu, 07 Nov 2024 05:01:02 GMT

@FlaDude wrote:
These ratings are not part of FICO scoring. They are displayed by myFICO and other portals to give you an idea how you stand in each of those categories and are based on whatever criteria each portal uses.

Agreed

Re: Thresholds for fico’s rating system

Kforce — Thu, 07 Nov 2024 18:40:07 GMT

@Anonymous wrote:
The eye-candy fluff "rating system" has absolutely no bearing on your fico scores, metrics, or anything. Not directly and not indirectly. It is a simple attempt to give simple people an idea of where their metrics stand and there is absolutely no way that any amount of score points could be assigned to the "fluffy feel good" system.

It is on par with a "smiley face rating system"

And since you ignore what everyone tells you and you will try yet again to back up your incorrect understanding of anything, I would like you to spend some time googling for answers to this question of yours. You will find nothing about it, and that is because (reread this reply from the beginning.)

Re: Thresholds for fico’s rating system

SRT4kid93 — Fri, 08 Nov 2024 16:03:40 GMT

@Kforce @SouthJamaica @Anonymous

@Anonymous Im not trying to back up my misunderstanding and I'm also not misunderstanding anything. I NEVER said the rating directly impacts the score, only that a correlation exists between the two. When my ratings improving, so did my scores. That is an undeniable fact. Not a misunderstanding. On my very first post in this thread you will notice that not only did i talk about the rating change, but i noted the actual changes that caused the rating change. Like when my newest account went from under 3 months to over, that is obviously the cause for the score change. Not the rating change, never the less, when 1 went up, so did the other. Correlation.

But honestly my wording doesn't matter. The truth is, the fico system is completely unknown. None of us know the secrets.

ALL I SAID

was that when my rating went up, so did my score. That proves that there is a correlation between the two. The scores do not need to be directly affected by the rating in order for a correlation to exist.

Correlation means that there is a relationship between 2 things. It doesn't define the relationship, nor the severity of said relationship. Direct or indirect, etc.

anyways, i want to say that I'm not mad. I was trying to have an intellectual conversation with you until you went on and attacked and bullied me over something that did not exist.

Re: Thresholds for fico’s rating system

SouthJamaica — Fri, 08 Nov 2024 14:32:33 GMT

@SRT4kid93 wrote:
@Kforce @SouthJamaica @Anonymous

@Anonymous Im not trying to back up my misunderstanding and I'm also not misunderstanding anything. I NEVER said the rating directly impacts the score, only that a correlation exists between the two. When my ratings improving, so did my scores. That is an undeniable fact. Not a misunderstanding. On my very first post in this thread you will notice that not only did i talk about the rating change, but i noted the actual changes that caused the rating change. Like when my newest account went from under 3 months to over, that is obviously the cause for the score change. Not the rating change, never the less, when 1 went up, so did the other. Correlation.

But honestly my wording doesn't matter. The truth is, the fico system is completely unknown. None of us know the secrets. So, why are you trying to make other people feel stupid when you actually have no idea. If you were genuinely trying to help me understand that would be one thing. But your post contributed nothing. The sole purpose of your post was to attack me and trying to make me feel stupid. Especially because you are putting words in my mouth.

You have failed to read what I said and therefore Mis interpreted what I said, probably because you skimmed what I said, without actually reading it. I can't blame you for that, I tend to type a lot. I would probably skim too. But if you are going to skim what I read, then you cannot judge me for your lack of understanding. If you took the time to read what I actually said. You would feel foolish

ALL I SAID

was that when my rating went up, so did my score. That proves that there is a correlation between the two. The scores do not need to be directly affected by the rating in order for a correlation to exist.

Correlation means that there is a relationship between 2 things. It doesn't define the relationship, nor the severity of said relationship. Direct or indirect, etc.

There's a correlation between children who were abused and those same children going on to abuse their kids. Does that 100% mean that the abuse they went through 100% made them go on to abuse their kids? No, it's possible that is the case, but a correlation between the two does not mean that is definitely what's happening.

it could have been any number of things that happened as a result of the abuse, not the abuse itself. Maybe the abuse the person suffered cause them to think that's how parents are supposed to act, and so that's what they did. Maybe the abuse made them have no self confidence in themselves, and hate themselves. So they want to hurt others to make themselves feel better.

anyways, i want to say that I'm not mad. I was trying to have an intellectual conversation with you until you went on and attacked and bullied me over something that did not exist.

this thread is now completely ruined. By not reading what I actually said, you contributed to the spread of misinformation about what this thread was actually about. It was meant to be a post about the thresholds between the ratings and so that people could read it and gain insight, and it could have been a really good place for information. and now when someone comes across this thread, they will see your comment, and assume exactly what you assumed. Making this thread practically dead before it ever got started. Shame.

I can assure you that I read, and reread, your posts carefully.

Re: Thresholds for fico’s rating system

JoeRockhead — Fri, 08 Nov 2024 14:52:07 GMT

@SRT4kid93 wrote:
Hey guys,

i wanted to start a thread for some of the know thresholds for ficos rating system (poor, fair, good, very good, exceptional)

as you know each section gets a rating, and while these ratings may seem silly, these ratings greatly impact your score. Whether the affect is directly because of the rating or indirectly I don't know, but I know it has an impact. To give you an idea I have also added my score changes associated with the ratings changes, keep in mind these score changes are specific to my profile.

here are some of the thresholds I have learned recently, feel free to add your own experiences

payment history-

was at good rating- 1 late payment and 50% of accounts paid as agreed

was improved to very good rating when my accounts paid as agreed went from 50% to 75%. Resulted in about 15/20 point increase across the board.

amount of new credit:

Was at fair rating- 2 new accounts in the past year, with newest account under 3 months of age

Improved to good rating once newest account hit 3 months, resulting in increase of about 10 points across all 3 cra's

amount of debt:

Was at very good rating- 4% aggregate utilization ratio, 1/1 accounts with balances

improved to exceptional rating once I added 2 additional accounts and made sure I did AZEO, making totals 1/3 accounts with balances and 1% aggregate utilization ratio. Resulted in about 15/20 point gain

credit age:

good rating- age of oldest account over 7 years, average age of accounts over 4 years

decreased to fair rating once I dropped to 2 years 7 months average age of accounts. So 3 or 4 years average age seems to be the thresholds to go from fair to good. Fair to good change resulted in 10 point gain for me.

credit mix

was at good rating with 1 open credit card and 1 closed auto loan, improved to very good after adding 2 additional credit cards.

-------------------------------------------------------------------------------------------------------------------------------
@SRT4kid93 wrote:
@Anonymous Im not trying to back up my misunderstanding and I'm also not misunderstanding anything. I NEVER said the rating directly impacts the score, only that a correlation exists between the two. When my ratings improving, so did my scores. That is an undeniable fact. Not a misunderstanding. On my very first post in this thread you will notice that not only did i talk about the rating change, but i noted the actual changes that caused the rating change. Like when my newest account went from under 3 months to over, that is obviously the cause for the score change. Not the rating change, never the less, when 1 went up, so did the other. Correlation.

But honestly my wording doesn't matter. The truth is, the fico system is completely unknown. None of us know the secrets. So, why are you trying to make other people feel stupid when you actually have no idea. If you were genuinely trying to help me understand that would be one thing. But your post contributed nothing. The sole purpose of your post was to attack me and trying to make me feel stupid. Especially because you are putting words in my mouth.

I know you know the difference between scores and ratings, but wording does matter. I have to say that when I read your post, it was your words that made it sound as if the ratings resulted in your scores increasing. Which, is what was essentially pointed out to you (and to others that have read, and will read this thread) as a correction in that the ratings, for all intents and purposes... are meaningless. They only exist as a word descriptor for one's scores.

Stating that the Fico system is completely unknown is misleading as there are several members here (not me) that have quite a good grasp of how a great number of things work within different scoring models.

I have to disagree when you say that you have been bullied, or that anyone has ruined your thread. These threads are for the purpose of open discussions. At times there is discourse, which is what has happened here. The benefit is that everyone, involved in the thread or not, has the chance to learn something from the discussions.

Re: Thresholds for fico’s rating system

SRT4kid93 — Fri, 08 Nov 2024 15:56:52 GMT

@JoeRockhead

thank you,

what you just said there means more than anything anyone else had to say, you calmly explained my error, and why my wording caused a misunderstanding. You treated me like a fellow human being with respect. You are what makes this forum great.

I thought my wording was more clear than it was, since i made sure to include the datapoint that actually caused the score change. like when my youngest account went from under 3 months to over 3 months. I only included the rating part so we could indentify the thresholds at which the ratings change. Because all this data can be very daunting. and maybe its easier for new comers to understand if they think of it as " when my rating goes up, so will my score"

instead of trying to remember every little data point like youngest accounts, average age, AZEO, aggregate util, util, accounts with balances, etc etc etc. trying to remember all that for a new comer can be very daunting. I stand by my previous statement that the original intent of the thread was noble, and that the data itself was extremely valid. I just think my wording complicated things or perhaps it was taken out of context or taken too literally. I was choosing to focus on the data itself, and thats probably why i missed how my wording confused things.

Re: Thresholds for fico’s rating system

mgood — Sat, 09 Nov 2024 02:36:34 GMT

What scores may be considered excellent, very good, good, not too bad, and abysmal probably varies by where you're seeing them.

I have seen multiple posts claiming that 760 is as high as you need for the best interest rates. Anything higher than that is just for bragging rights. Other places have said that comes at 780. I've seen at least a couple of people here say they got the best interest rate only because they were at 800+. I strongly suspect that this varies from one lender to another. One bank may give you their best interest rate if you have 760+ on whichever score they look at. Another bank my require 800+ for their best rate. And others may fall somewhere in between that. So different lenders and different score reporting systems have different opinions on what exactly is a great score.

Re: Thresholds for fico’s rating system

SRT4kid93 — Tue, 12 Nov 2024 14:17:56 GMT

@mgood

agreed, but I was actually talking about the fico rating system for each separate section(payment history, amount of debt, length of credit history, etc)

Not what is considered a good score in general. Because you are correct, that is very relative, some people consider anything over 660 to be considered a good score. Where as I would not consider that to be good. Since it's well below average.

Although at this point I don't feel like it really matters anymore. I was trying to identify at what thresholds these ratings change. Even if the ratings are fluff created by fico, it still would have been a valid topic. But No one has stuck on topic to the original post.

Re: Thresholds for fico’s rating system

JoeRockhead — Tue, 12 Nov 2024 14:37:23 GMT

@SRT4kid93 wrote:
@mgood

agreed, but I was actually talking about the fico rating system for each separate section(payment history, amount of debt, length of credit history, etc)

Not what is considered a good score in general. Because you are correct, that is very relative, some people consider anything over 660 to be considered a good score. Where as I would not consider that to be good. Since it's well below average.

Although at this point I don't feel like it really matters anymore. I was trying to identify at what thresholds these ratings change. Even if the ratings are fluff created by fico, it still would have been a valid topic. But No one has stuck on topic to the original post.

For the purposes of your thread here are approximate ratings given for corresponding Fico 8 scores:

300 to 579 = POOR
580 to 669 = FAIR
670 to 739 = GOOD
740 to 799 = VERY GOOD
800 to 850 = EXCEPTIONAL

Re: Thresholds for fico’s rating system

SouthJamaica — Tue, 12 Nov 2024 17:31:25 GMT

@SRT4kid93 wrote:
@mgood

agreed, but I was actually talking about the fico rating system for each separate section(payment history, amount of debt, length of credit history, etc)

Not what is considered a good score in general. Because you are correct, that is very relative, some people consider anything over 660 to be considered a good score. Where as I would not consider that to be good. Since it's well below average.

Although at this point I don't feel like it really matters anymore. I was trying to identify at what thresholds these ratings change. Even if the ratings are fluff created by fico, it still would have been a valid topic. But No one has stuck on topic to the original post.

FICO doesn't have ratings.

The MyFICO.com website has 'ratings' for different factors, from Poor to Exceptional, under the 'Insights' section of its analysis of the FICO 8 scores. Those appear to be what you are talking about.

Re: Thresholds for fico’s rating system

Anonymous — Wed, 13 Nov 2024 00:53:16 GMT

A few basic examples of Fico algorithms

Lates
https://i.imgur.com/ReFzrOC.png

New
https://i.imgur.com/M3770GH.png

UTI
https://i.imgur.com/be19Py3.png

Bankruptcy Effects
https://i.imgur.com/No3s7t7.png

Graph1
https://i.imgur.com/zzYfAP0.png

Graph2
https://i.imgur.com/5QqImEf.png

Now, welcome to a basic and essentially meaningless five-tier "emoji face" rating system, which has been created to loosely represent the hundreds to thousands of ever-changing data points and to offer a simplistic depiction of the relevant category.

"Emoji Face" rating system
https://i.imgur.com/4NqviVH.png

FICO scores can fluctuate by multiple increments of tens without any alterations to the "emoji faces." Alternatively, the FICO score may appear unchanged, with one or more "emoji faces" reflecting a different mood. It is impossible to quantify this, and even if it were feasible, it would serve no practical purpose.

Re: Thresholds for fico’s rating system

FireMedic1 — Fri, 15 Nov 2024 08:02:37 GMT

@SRT4kid93 wrote:
Hey guys,

i wanted to start a thread for some of the know thresholds for ficos rating system (poor, fair, good, very good, exceptional)

as you know each section gets a rating, and while these ratings may seem silly, these ratings greatly impact your score. Whether the affect is directly because of the rating or indirectly I don't know, but I know it has an impact. To give you an idea I have also added my score changes associated with the ratings changes, keep in mind these score changes are specific to my profile.

here are some of the thresholds I have learned recently, feel free to add your own experiences

payment history-

was at good rating- 1 late payment and 50% of accounts paid as agreed

was improved to very good rating when my accounts paid as agreed went from 50% to 75%. Resulted in about 15/20 point increase across the board.

amount of new credit:

Was at fair rating- 2 new accounts in the past year, with newest account under 3 months of age

Improved to good rating once newest account hit 3 months, resulting in increase of about 10 points across all 3 cra's

amount of debt:

Was at very good rating- 4% aggregate utilization ratio, 1/1 accounts with balances

improved to exceptional rating once I added 2 additional accounts and made sure I did AZEO, making totals 1/3 accounts with balances and 1% aggregate utilization ratio. Resulted in about 15/20 point gain

credit age:

good rating- age of oldest account over 7 years, average age of accounts over 4 years

decreased to fair rating once I dropped to 2 years 7 months average age of accounts. So 3 or 4 years average age seems to be the thresholds to go from fair to good. Fair to good change resulted in 10 point gain for me.

credit mix

was at good rating with 1 open credit card and 1 closed auto loan, improved to very good after adding 2 additional credit cards.

Ratings mean nothing. All the separate catagories you placed do have positive score changes for the better. Aging is the key. Newest account. Lates get older less of a sting. AAoA and so on. That comes with the higher scores. Adding the 2 cards to make it 3 revolvers helped. The closed loan if there are no other loans. Didnt help improve anything.