topic "Long account history" changes to "Short account history" in one month in Understanding FICO® Scoring

"Long account history" changes to "Short account history" in one month

Anonymous — Fri, 18 Sep 2009 01:56:46 GMT

...and my score drops 42 points.

Does the FICO algorithm include an element of randomness to make it more exciting? Here is something ridiculous: I did a TransUnion FICO score check a month ago and an Equifax score check today and my score today was 42 points lower than the score I got a month ago. What changed? Absolutely nothing, other than growing another month older. The information that Equifax and TransUnion has is exactly the same in every category aside from the balance of some of my accounts being lower this month as I pay off loans.

What is totally ridiculous is the account history measure. One month ago, I was told that my "Long account history" was helping my score. This month, I was told that my "Short account history" was hurting my score. Last month, my oldest account was shown as being opened 7 years ago with an average age of 3 months. This month, my oldest account was shown as being opened 7 years, 1 month ago and the average age of my accounts was 3 years. How could this POSSIBLY have gone from positive to negative over the course of a month when the average account age only went UP?

Re: "Long account history" changes to "Short account history" in one month

Anonymous — Fri, 18 Sep 2009 01:59:58 GMT

Here's the proof. It would be comical if these scores weren't taken so seriously.

Re: "Long account history" changes to "Short account history" in one month

Lel — Fri, 18 Sep 2009 04:12:49 GMT

You can't compare your TransUnion score and your Equifax score and say that your score has changed. The credit bureaus use slight different scoring formulae, so your TU score and your EQ score are often different from each other. For some people, their TU scores and consistently higher than their EQ scores. For others (like me), it's the other way around. I'll bet that if you were to pull both scores on the same day, your scores will be different.

With regard to the "hurting" vs "helping" score, the thing to understand about these red and green boxes is that they are there mostly as a guide to help you understand how your scores could improve. As scores get lower, myFICO will give you more red boxes. It doesn't mean that your credit behavior is necessarily worse. Sometimes, as you can see, there can be a disconnect between what positive and negative factors are generated by these two credit bureaus if your scores are significantly different from each other. But it doesn't mean that your EQ score is being disproportionately hurt by your average account age as compared to your TU score. It's just that since your EQ score is lower, myFICO tries to give you more factors to consider when you analyze your score.

So to reiterate, there's no evidence that your score has dropped, since you didn't pull your score from the same bureau. If you really want to see if anything has changed, pull your TU score again, and see where it stands. Assuming that there are no significant changes to your credit profile (e.g. higher credit card balances, late payments, etc.) then your score shouldn't be significantly different.

Re: "Long account history" changes to "Short account history" in one month

Anonymous — Fri, 18 Sep 2009 04:28:01 GMT

That is news to me. My understanding was that FICO was independent of the credit reporting agencies and was using them as a data source only. My understanding was then that the score differences between TransUnion and Equifax would be due to slightly different information each agency had on file, and that if the data was identical then the scores should be very close if not the same.

I am not willing to drop another $15 to see if TransUnion has changed or not.

If what you say is correct - which I have no reason to doubt it is - then I still think a reasonable person would find it silly that something could help your score with TransUnion and hurt your score with Equifax. I understand what you are saying - that it is good but not great... and while it isn't a negative, it could be better so it "hurts" your score relatively... but it is rather confusing, and it is extra confusing that it is presented as "good" for one agency and "bad" for another.

Thank you for your response, though - I appreciate you clearing that up for me.

Re: "Long account history" changes to "Short account history" in one month

Lel — Fri, 18 Sep 2009 06:17:10 GMT

Fair Isaac/FICO develops scoring models for each of the individual credit reporting agencies. The basic elements are the same - payment history, revolving credit utilization, etc. - but the formulas are slightly different, yielding different scores. And like you mentioned, sometimes there are differences among the information reported to each CRA, which can also affect the score.

With regard to the comments that you see - that your credit history is short or long - these do not affect your score. Even though one report says that your credit history is short, that comment alone does not drop your score. The actual age - 7 years, 1 month - is what is used to calculate your score.

Looking at what you posted again, the comment that seems most out-of-place is the TU statement that you have a long or established credit history. As it notes, your first account was opened 7 years ago, whereas high achievers opened their account 19 years ago. Your AAoA is 3 years vs 6-12 years for high achievers. So if anything, this positive comment doesn't logically follow.

Re: "Long account history" changes to "Short account history" in one month

rom828 — Fri, 18 Sep 2009 17:50:16 GMT

@Anonymous wrote:
That is news to me. My understanding was that FICO was independent of the credit reporting agencies and was using them as a data source only. My understanding was then that the score differences between TransUnion and Equifax would be due to slightly different information each agency had on file, and that if the data was identical then the scores should be very close if not the same.

I am not willing to drop another $15 to see if TransUnion has changed or not.

If what you say is correct - which I have no reason to doubt it is - then I still think a reasonable person would find it silly that something could help your score with TransUnion and hurt your score with Equifax. I understand what you are saying - that it is good but not great... and while it isn't a negative, it could be better so it "hurts" your score relatively... but it is rather confusing, and it is extra confusing that it is presented as "good" for one agency and "bad" for another.

Thank you for your response, though - I appreciate you clearing that up for me.

Raven, I understand your frustration.....it's more than a little confusing, but there's a lot of great info in this forum that can help clear some of this up for you. But as you'll see from many, many posts, just when you think you're getting it all figured out, something else comes up!!

My TU FICO is always higher, sometimes by a lot....than my FICO EQ score (and when we could get FICO Experian, it was usually closer to the TU score than the EQ score).

And TU & EQ do treat the same info on my report differently.

For example, my 20% utilization with EQ is in green for 'helping', but the same exact info is red under TU for 'hurting'.

I've just had to come to accept that there are aspects of this FICO scoring that I'll never be able to understand!

Re: "Long account history" changes to "Short account history" in one month

MattH — Sat, 19 Sep 2009 11:46:58 GMT

@Lel wrote:
Fair Isaac/FICO develops scoring models for each of the individual credit reporting agencies. The basic elements are the same - payment history, revolving credit utilization, etc. - but the formulas are slightly different, yielding different scores. And like you mentioned, sometimes there are differences among the information reported to each CRA, which can also affect the score.

The way I look at the CRA-specific versions of the scoring model is, it's rather like several instructors doing sections of a college class with a large enrollment. In a previous life I was one of those instructors so I know exactly what that's like. No matter how hard we tried to be objective, no matter how carefully we discussed our grading criteria and so forth, there inevitably would be small differences among us: I might take more points off for this mistake and fewer points off for that mistake than another person would. So what we did was the only thing we could do: grade on a curve, because none of us wanted to penalize or reward the students for which section they happened to be in. It's the same with FICO scoring: they work very hard to make each variation have the same overall statistical properties so similar proportions of consumers will fall in each range of scores, but inevitably there are differences in how each individual score comes out.

Re: "Long account history" changes to "Short account history" in one month

Anonymous — Sat, 19 Sep 2009 15:27:30 GMT

There are major differences between the scoring models used to produce the FICO scores available to consumers based on TU and EQ CBR's. If you want to compare the scores they must come from the same source!

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