topic Re: Has FICO Scoring Changed in Understanding FICO® Scoring

Has FICO Scoring Changed

chrys — Thu, 03 Sep 2009 22:47:42 GMT

I was just informed by MyFico -Equifax that my score dropped from 775 to 734...a 41 point drop. Has the scoring method changed recently? I have a lot of accounts (29) but only 6 with balances. I've had these account for quite a while. The ratio of my revolving balances to my credit limits is 6%. I notice there were 3 inquiries but they were not by me. In fact one of the inquiries by Advanta closed the account for lack of activity. There are no negatives from the CC companies; so I can't dispute anything. I'd like to talk to FICO about their scoring but I don't think they accept calls or inquiries.

One after thought do you think they are including business card activity but not showing it. I have a couple of business cards but that would bring by debt/credit limit ratio up to about 8 or 9 per cent.

Do I have any options?

Re: Has FICO Scoring Changed

haulingthescoreup — Thu, 03 Sep 2009 23:02:50 GMT

Hi, welcome to the forums! Sorry to hear about the startling drop.

If you pull your myFICO EQ report, it will list the negative factors that are affecting your score, with the most significant one being listed first. If you've never pulled one before, it will be hard to compare, but that will give you a start. You'll also be able to tell which accounts are reporting.

If you were notified via Scorewatch, don't worry about the reasons on the alert. They can be pretty lunatic.

The scoring formula hasn't changed, though.

Re: Has FICO Scoring Changed

Anonymous — Fri, 04 Sep 2009 01:17:57 GMT

Did you have any accounts fall off recently or did your total credit history hit a new year milestone? If you pulled a score report recently, pull one now and compare the two and let us know the differences. If you don't have any derogs in your report it could be from a recent loss of account history or your credit profile being compared to more competitive profiles because your profile has aged and placed you in a new "credit bucket"

Re: Has FICO Scoring Changed

chrys — Fri, 04 Sep 2009 12:45:29 GMT

Thanks for your insight. I've reviewed my FICO scores:

02/03/2007 737

03/14/2007 745

05/29/2007 738

08/18/2007 743

04/15/2008 775

09/03/2009 734

I pulled all 3 reports and there is nothing unusual from a year ago except the balances have all decreased and my debt/credit limit ratio declines which is good. If anything the FICO score should be going up. There appears to be a lot of variability in the scoring. The scores did spike in April of last year so maybe I am just returning to the mean.

Still disconcerting.

Is there a service that can analyze my 3 in 1 report and identify the problem? Can FICO take a second look? Maybe next month it will be higher. I could close some of those accounts I'm not using but I thought it was good to keep them open since the age data might be negatively impacted. It just seems crazy that I should suffer a 41 point decline.

Re: Has FICO Scoring Changed

Anonymous — Fri, 04 Sep 2009 15:38:46 GMT

I think it might have changed. I heard a story on the radio this morning about "new FICO scoring model" and here's an article on MSN money, http://articles.moneycentral.msn.com/Banking/YourCreditRating/the-new-math-of-FICO-credit-scores.aspx

Hope it's ok to post this link, otherwise Mods, feel free to delete.

Re: Has FICO Scoring Changed

llecs — Fri, 04 Sep 2009 16:07:21 GMT

GoldenDreams wrote:
I think it might have changed. I heard a story on the radio this morning about "new FICO scoring model" and here's an article on MSN money, http://articles.moneycentral.msn.com/Banking/YourCreditRating/the-new-math-of-FICO-credit-scores.aspx

Hope it's ok to post this link, otherwise Mods, feel free to delete.

Feel free to post links anytime, so as long as you aren't selling something or the link leads to an inappropriate website.

The scores here are the same model as always. When the formula used on myFICO changes, everyone will be given a heads up first, I certain.

There are different FICO formulas for each CRA and new ones are being introduced all the time to keep up with the demands of lenders, to adapt to the economy, etc. The latest versions to roll out are the FICO08 versions. It was introduced to TU last fall, EQ in the spring, and finally EX this summer. The formula differs in several ways and a very teeny tiny minority of lenders are using them now. You probably won't see a widespread use of this FICO08 version for another few years.

This website and the others that allow you to pull your own score (myFICO, transunioncs.com (note the cs), and Equifax.com (EQ only)) still sell the same versions as always (TU98 and Beacon 5.0). Some lenders out there are using different versions, but a large vast majority still use the same EQ score as the one found here (Beacon 5.0) and a majority use a TU version that actually differs from the one use here; most use TU04.

Re: Has FICO Scoring Changed

chrys — Fri, 04 Sep 2009 16:35:38 GMT

Thanks. That Money article was interesting. All my utility bills are paid in full each month; so, I don't think that's the issue. However,this caught my interest:

"FICO 08 aims to single out individuals who are named as authorized sources through deceptive means, Ulzheimer said. Those people won't see their credit scores rise as a result. But the scores of legitimate authorized users will be treated as they always have been."

Now, how are they going to do that? By last name? I'm an authorized user on my partner's AMEX card and my last name is different than his. His FICO score is higher than mine and now a lot more after taking that 41 point hit.

Re: Has FICO Scoring Changed

Anonymous — Fri, 04 Sep 2009 17:00:52 GMT

From what I understand, if you're an authorized user on a family member's card (husband, parent, etc.) it's fine, but they're targeting those companies that advertize help to raise credit scores by adding peoples names to credit accounts to help increase scores. Evidently, people can pay to have their name added to credit accounts in good standing and their scores go up accordingly. I think they're trying to close this loophole.

Re: Has FICO Scoring Changed

AndySoCal — Sat, 05 Sep 2009 06:44:31 GMT

The FICO 2008 does not apply here. FICO 2008 is not availible to consumers yet.

Re: Has FICO Scoring Changed

Anonymous — Sat, 05 Sep 2009 20:40:02 GMT

@chrys wrote:
Thanks for your insight. I've reviewed my FICO scores:

02/03/2007    737
03/14/2007    745
05/29/2007    738
08/18/2007    743
04/15/2008    775
09/03/2009    734

I pulled all 3 reports and there is nothing unusual from a year ago except the balances have all decreased and my debt/credit limit ratio declines which is good. If anything the FICO score should be going up. There appears to be a lot of variability in the scoring. The scores did spike in April of last year so maybe I am just returning to the mean.

Still disconcerting.

Is there a service that can analyze my 3 in 1 report and identify the problem? Can FICO take a second look? Maybe next month it will be higher. I could close some of those accounts I'm not using but I thought it was good to keep them open since the age data might be negatively impacted. It just seems crazy that I should suffer a 41 point decline.

Welcome to the forums!

Did you pull all these reports/scores from here? Are they EQ or TU? If you did look very carefully through the information provided - page by page. Something on your CBR has changed. The scoring model has not.

If you pulled them somewhere else: Are they all from the same place? Where from? Is it a FICO score?

Re: Has FICO Scoring Changed

Anonymous — Sun, 06 Sep 2009 02:12:12 GMT

My first post here, and I have to echo Chrys's bafflement. I'm a new member on myfico, so I may need to learn the ropes here - if I miss something as a newbie, polite direction is always appreciated!

My full report pulled in late July showed the three items most affecting my score negatively as high account balance, high ratio of revolving balances to limits (46%) and one new account opened 10 months ago.

Pulling the same report today, it shows my three negative items as high revolving balance (but 25% lower than before) high ratio of revolving balances to limits (28%) and the new account opened 1 year ago.

My score went from 724 on the earlier report to 715 on the later one. In the meantime creditors have started to reduce my available credit line as my score dropped - which I know can/will leave me in worse shape than before I paid off the other accounts!

I haven't missed a payment or been late in the history of my report. Other than paying off several thousand dollars, some balances were transferred between accounts to try to smooth things out. Otherwise no changes.

Any thoughts on why the score would be lower?

Re: Has FICO Scoring Changed

llecs — Sun, 06 Sep 2009 02:38:23 GMT

TallDave wrote:
My first post here, and I have to echo Chrys's bafflement. I'm a new member on myfico, so I may need to learn the ropes here - if I miss something as a newbie, polite direction is always appreciated!

My full report pulled in late July showed the three items most affecting my score negatively as high account balance, high ratio of revolving balances to limits (46%) and one new account opened 10 months ago.

Pulling the same report today, it shows my three negative items as high revolving balance (but 25% lower than before) high ratio of revolving balances to limits (28%) and the new account opened 1 year ago.

My score went from 724 on the earlier report to 715 on the later one. In the meantime creditors have started to reduce my available credit line as my score dropped - which I know can/will leave me in worse shape than before I paid off the other accounts!

I haven't missed a payment or been late in the history of my report. Other than paying off several thousand dollars, some balances were transferred between accounts to try to smooth things out. Otherwise no changes.

Any thoughts on why the score would be lower?

Which credit reporting agency is this and where did you get your score?

Re: Has FICO Scoring Changed

Anonymous — Sun, 06 Sep 2009 04:42:26 GMT

Equifax, and they were pulled via my Score Watch subscription on MyFico.

Re: Has FICO Scoring Changed

Anonymous — Sun, 06 Sep 2009 07:34:04 GMT

@Anonymous wrote:
Pulling the same report today, it shows my three negative items as high revolving balance (but 25% lower than before) high ratio of revolving balances to limits (28%) and the new account opened 1 year ago.

My score went from 724 on the earlier report to 715 on the later one. In the meantime creditors have started to reduce my available credit line as my score dropped - which I know can/will leave me in worse shape than before I paid off the other accounts!

Welcome to the forums!

Not based on that score drop did they CLD. But perhaps quite possibly due to your continuing high utilization they did. CC issuers do not like high UTIL these days at all!

Don't focus on the cited factors. Go through those Score Watch reports page by page. The difference lies there.

Re: Has FICO Scoring Changed

llecs — Sun, 06 Sep 2009 12:28:44 GMT

TallDave, thanks. Did you have more CCs reporting a balance on the 2nd report vs. the first? Even with a drop in util, if you had extra CCs reporting balances you might see a ding in score.

Look also in your EQ reports. Look at the positive and negative factors in both reports and look to see if any of those changed.

Re: Has FICO Scoring Changed

Jazzzy — Sun, 06 Sep 2009 15:04:14 GMT

@Anonymous wrote:
My first post here, and I have to echo Chrys's bafflement. I'm a new member on myfico, so I may need to learn the ropes here - if I miss something as a newbie, polite direction is always appreciated!

My full report pulled in late July showed the three items most affecting my score negatively as high account balance, high ratio of revolving balances to limits (46%) and one new account opened 10 months ago.

Pulling the same report today, it shows my three negative items as high revolving balance (but 25% lower than before) high ratio of revolving balances to limits (28%) and the new account opened 1 year ago.

My score went from 724 on the earlier report to 715 on the later one. In the meantime creditors have started to reduce my available credit line as my score dropped - which I know can/will leave me in worse shape than before I paid off the other accounts!

I haven't missed a payment or been late in the history of my report. Other than paying off several thousand dollars, some balances were transferred between accounts to try to smooth things out. Otherwise no changes.

Any thoughts on why the score would be lower?

I agree that this score drop likely did not spur the cc companies into lowering your available credit. As said before, cc companies are looking at high utility as a risk factor.

A question for everyone based on the above scenario: Does anyone out there think that their credit lines were decreased based on making a balance transfer? I'm wondering if this has become a major red flag for the cc companies.

To TallDave: Did your cc company give you their reasoning for reducing your limit? Some companies are lowering limits based simply on not using the card. Dinged if you use it too much...dinged if you don't use it enough.

Re: Has FICO Scoring Changed

llecs — Sun, 06 Sep 2009 16:15:15 GMT

LynetteM wrote:
A question for everyone based on the above scenario: Does anyone out there think that their credit lines were decreased based on making a balance transfer? I'm wondering if this has become a major red flag for the cc companies.

CLDs are happening to everyone. It tends to happen most to people who carry large balances over a period of time, those who are late, or those who tend to max out their CCs. Though CLDs have happened to folks in here with 800+ FICO scores, those who had less than 1% reporting, and to those who had a seemingly long history with no issues. It is happening across the board.

I received on CLD with Bloomingdales. The CC went from $2300 to $200. The reason they gave was adverse action on EX. Now I am 100% positive nothing happened on EX as I pull daily, but in talking to a CSR I learned that it was basically an excuse with no logic or reasoning behind it. In short, don't trust their reasons as to why you experience an AA. BTW, in talking to them and asking the right questions, they admitted that no CLD should have happened and they bumped it back to $1500. I'll take what I can get.

Re: Has FICO Scoring Changed

Anonymous — Sun, 06 Sep 2009 17:21:01 GMT

@LynetteM wrote:
@Anonymous wrote:
My first post here, and I have to echo Chrys's bafflement. I'm a new member on myfico, so I may need to learn the ropes here - if I miss something as a newbie, polite direction is always appreciated!

My full report pulled in late July showed the three items most affecting my score negatively as high account balance, high ratio of revolving balances to limits (46%) and one new account opened 10 months ago.

Pulling the same report today, it shows my three negative items as high revolving balance (but 25% lower than before) high ratio of revolving balances to limits (28%) and the new account opened 1 year ago.

My score went from 724 on the earlier report to 715 on the later one. In the meantime creditors have started to reduce my available credit line as my score dropped - which I know can/will leave me in worse shape than before I paid off the other accounts!

I haven't missed a payment or been late in the history of my report. Other than paying off several thousand dollars, some balances were transferred between accounts to try to smooth things out. Otherwise no changes.

Any thoughts on why the score would be lower?
I agree that this score drop likely did not spur the cc companies into lowering your available credit. As said before, cc companies are looking at high utility as a risk factor.

A question for everyone based on the above scenario: Does anyone out there think that their credit lines were decreased based on making a balance transfer? I'm wondering if this has become a major red flag for the cc companies.

To TallDave: Did your cc company give you their reasoning for reducing your limit? Some companies are lowering limits based simply on not using the card. Dinged if you use it too much...dinged if you don't use it enough.

Absolutely not/no!

Re: Has FICO Scoring Changed

Anonymous — Sun, 06 Sep 2009 17:47:41 GMT

cwcd: thanks for the welcome! And now for the debate...

I understand it could be coincidence, however: I made a balance transfer using a Citi card to significantly pay down a Chase card and a Cap One card. Within 10 days, both Chase and Cap One lowered my CL to just barely above the remaining balances. That was the first event of this cascade of "adjustments."

I have a second Chase card that was not involved in the transfers, which to date has ben unaffected. I also noted with irony that Chase immediately sent me balance transfer checks in case I wanted to use my remaining $100 or so to pay off a higher interest card. (!)

Now perhaps answering my own question earlier, that means I went from two cards at around 60% utilization and one with zero, to two cards with 95% utilization and one with about 75%, due to the reduced lines.

As I said, it could be pure coincidence, but the almost immediate reaction of those two cards to the payoff, and the non-action on another card from the same company have to make me at least keep open the possibility that balance transfers (now) create a red flag.

And thanks to everyone for the support and advice - even in a debate I value understanding all points of view very much!

Re: Has FICO Scoring Changed

Jazzzy — Sun, 06 Sep 2009 17:52:37 GMT

Thanks for the responses to my question on balance transfers. I wondered if FICO was not liking the use of balance transfers, which basically just moves debt around...even though that debt is often moved for sound financial reasons.

Every cc company seems to be pushing BTs these days, and I wondered if the cc companies were giving with one hand and FICO was taking away with the other.

Edit: I wrote this before reading the above post....humm.

Message Edited by LynetteM on 09-06-2009 10:52 AM