topic Re: I am convinced the FICO algorithm is fixed.. in Understanding FICO® Scoring

I am convinced the FICO algorithm is fixed..

Anonymous — Tue, 01 Mar 2011 15:47:40 GMT

I am thoroughly convinced Fair Issaic is tied in with the wall street crap. Last month my score was 700 with 48% utilization and the same installment balances I have now except we traded in an older car and leased a new one. The report hasn't updated yet to show our older car as paid off, yet I've had 4 car loans at one time on the recent past. It now shows us as having 3 until the reports catch up and only 2 will remain. I make 6 figure salary so debt to income ratios are low. In fact, we just were approved for a 15 year mortgage at 4.25% and the bank stated my debt to income was well below the old school ratios. So, recently I paid quite a bit of cc debt down. Went from 48% utilization to 23% in a month. Paid a 6k loan off and also the 4th car loan. We did apply for a mortgage and 2 credit cards. So now on the quarterly FICO statement, my scores dropped from 700 to 670. They always cite ridiculous factors for reasons why the score is being affected. Granted, I a medical bk in 2004 but have ZERO late payments on ANY accounts since 2004. That shouldn't affect my score much at thus point but will hamper me from obtaining a 800 score until it falls off in 2014. They then cite that my credit file isn't old enough (13 years) and that my average accounts are only 5 years old. Those weren't factors last time but now are. The system is "searching" as usual to find crap to ding you. Last but not least, I though the algorithm liked to see <30% utilization (obviously near zero is optimal) and yet mine is 23%, down from 48% last month and it is sell the 2nd heaviest factor lowering my score! It says I am making heavy use of credit at 23%! Ridiculous to drop my score 30 points with lower debt and loans paid off. My favorite ding is the lack of a mortgage account. Stability...pfft!

Re: I am convinced the FICO algorithm is fixed..

Anonymous — Tue, 01 Mar 2011 15:56:12 GMT

FICO scoring system assigns you a score by comparing you with others with similar credit profile, so that means somewhere out there someome is doing something better than you. I say too much loan activity is hurting your AAOA etc. I hope some experienced member chimes in on this...

Re: I am convinced the FICO algorithm is fixed..

llecs — Tue, 01 Mar 2011 16:15:40 GMT

@Anonymous wrote:
.....and leased a new one [car]. .......we just were approved for a 15 year mortgage at 4.25%.........and 2 credit cards.......Ridiculous to drop my score 30 points.....

Adding a new trade line, like a CC, lease or mortgage (if reporting) can drop your points by that much or a lot more if all are reporting now. Adding any new credit can drop your FICO score because lenders are jittery with added credit or debt. Those with 800 FICO scores aren't adding anything new (typically) or if they do, they'll take a score drop and rebound with time.

@Anonymous wrote:
I make 6 figure salary so debt to income ratios are low.

DTI isn't a part of FICO scoring. Someone earning $50,000 per year has equal footing per a score as someone earning $50bln per year. IIRC, Warren Buffett's score was posted at some point and it was in the low 700s.

@Anonymous wrote:
My favorite ding is the lack of a mortgage account.

Where did you pull your report to see this mention? I could easily be wrong (often am) but I don't think this is a FICO scoring reason. It certainly is a reason for some FAKO (non-FICO) scores. I've seen this on reports from freecreditreport, creditchecktotal, and via the Vantage or TransRisk score from CreditKarma or TrueCredit. BTW, there are posters in here who hit 800 without a mortgage.

_________________

Per the FICO scoring aspect, you might know that the FICO score is very complex and is broken down into a series of score cards or scoring buckets. Without getting into the nitty gritty, your score is dependent upon everyone else's and thankfully you are not directly compared to someone who is late every month (or thankfully for them) and you aren't compared to someone with a 30+ year history. The positive and negative items listed on pages 2 and 3 of your report are a guide...a very accurate guide. It doesn't tell you how many points you are losing but those 1-4 items will shift up and down based on your credit profile. It just so happens that with others with a clean history and a BK, most other people have a utilization better than the 20% you cited. 20% is a tad high and I bet you can get an additional 20-30 points as you approach 0%. It's a general guide. Some items you can't do anything about (like a BK) and some items you have total control over. These items will shift up and down and even switch to the positive side from time to time depending on what they are. In general, avoid new credit. Adding CCs, a lease, and a mortgage will drop your scores considerably. And keep util low and pay on time as you are doing. Don't worry so much about installment balances since the impact is very minimal but avoid applying for new ones too if you can.

Re: I am convinced the FICO algorithm is fixed..

Anonymous — Tue, 01 Mar 2011 16:43:10 GMT

I am more surprised that since utilization is such a high percentage of the score that a drop from 48% to 23% wouldn't attenuate the recent credit pulls and tradelines. My reasoning for the mortgage comment was, IIRC, from a FAKO but i'm pretty sure FICO likes "stability" . I just moved in the past 6 months too and that just updated. My biggest "beef" with this whole method of showing creditworthiness is that lenders who use the FICO or similar proprietary scoring methods , regardless if they lie about using "other" factors or not ( because we all know your creditscore is the determining factor especially with rate determination), is pure crap and doesn't tell the entire story. I don't recall being able to pull bear-sterns credit report or any larg institution when they took our tax dollars with TARP funds. Then the algorithm says I'm high risk because of the age of my file and average accounts even though 13 years of history isn't good enough. The breakdown of my page 2 shows 4 derogs and two positive factors. The derogs are: 1) bk in 2004 2) 23 utilization 3) overall file time (13 years) 4) average account time ( 5 years) The positives 1) no missed payments for > 6 years 2) length of credit history I just think the system is crap and we are getting fleeced as usual. Sorry for the rant.

Re: I am convinced the FICO algorithm is fixed..

Walt_K — Tue, 01 Mar 2011 16:41:17 GMT

I understand that you're upset, but it doens't really seem like you are getting fleeced. You were approved for a mortgage with a good rate. You were also approved for several other credit prodcuts, credit card, auto loans. You didn't say the rate, but it sounds like you have pretty good credit and are just taking a temporary ding for all the recent pulls and new trade lines, which will recover in fairly short time. If you were getting screwed, you'd be getting denials or having to look at subprime options. Considering you just got approved for your mortgage and another car, I'm guessing you'll have plenty of time for your score to climb back up before you need to apply for any more credit. And for utilization, below 10% seems to be the number that works for most (not all) people on here.

Re: I am convinced the FICO algorithm is fixed..

Anonymous — Tue, 01 Mar 2011 16:44:33 GMT

We all have different concerns and personal frustrations with credit and money management. I don't think negatives like late payments, CO's, collections, etc. should hurt your score for up to 7.5 years but that's the system we have to work within for now. I think a maximum of 3-4 years for negative reporting is much more fair.

There will never be any kind of scoring system though that will seem fair or equitable to all concerned because we have unique personal situations. I believe education is so very important. I had pretty good scores before I found this site but I've learned so much in just a year and a half. I realize now how to work the system and not let it work me.

From a BK years ago to:
EX - 9/09 pulled by lender 802, EQ - 2/11-816, TU - 2/11-782

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

Re: I am convinced the FICO algorithm is fixed..

Anonymous — Tue, 01 Mar 2011 16:53:03 GMT

Maybe I'm greedy but I just think my score should be higher. You are correct that I have been able to get most cc's and auto loans. I got 0% financing in 2010 and 1.9% just this past December. I have worked extremely hard, as many of you have, building my file especially after a daunting fight with my college HMO for denial of services after they knew I was hospitalized through the ER. That led me to the shameful BK in 2004. I know much if my ability to get financed has been greatly impacted by my income level and DTI, as the score for most is the determining factor for rates unless you have an abysmal score. Maybe I won't see a vast improvement until the bk falls off in 2014...

Re: I am convinced the FICO algorithm is fixed..

Anonymous — Tue, 01 Mar 2011 16:59:20 GMT

@Anonymous wrote:
Maybe I'm greedy but I just think my score should be higher. You are correct that I have been able to get most cc's and auto loans. I got 0% financing in 2010 and 1.9% just this past December. I have worked extremely hard, as many of you have, building my file especially after a daunting fight with my college HMO for denial of services after they knew I was hospitalized through the ER. That led me to the shameful BK in 2004. I know much if my ability to get financed has been greatly impacted by my income level and DTI, as the score for most is the determining factor for rates unless you have an abysmal score. Maybe I won't see a vast improvement until the bk falls off in 2014...

IMO a BK is nothing to be ashamed about. I am neither ashamed nor proud of mine. It is something I felt was necessary with the information and knowledge I had at the time.

Neither of us did anything illegal did we? So just accept it as one small part of your life.

Re: I am convinced the FICO algorithm is fixed..

Anonymous — Tue, 01 Mar 2011 17:08:46 GMT

maxedout,

I may have missed it, but I'm unclear if you pulled a FICO score or not. Pull one from here, google "myfico discount code" and be sure to ignore those FAKO scores along with comments, i.e. not enough mortgages that come along with FAKOS. FAKOS cause ulcers, general crankiness, and more than one person - I'm sure - has pulled their hair out after paying attention to a FAKO score.

DH has three mortgages (one open) reporting on EQ. His FICO is 776. His FAKO, on the other hand, is 695 and states "not enough mortgage accounts." Hilarious.

And those of us with BK's on our reports can obtain FICO scores up to 760.

Re: I am convinced the FICO algorithm is fixed..

Anonymous — Tue, 01 Mar 2011 17:13:36 GMT

I know....sigh...I think I'm just upset that the gas prices are going up for no reason due to the same speculation crap that the government was supposed to reign in when wall street nearly collapsed and now I see this and it's the icing on the cake. I surely don't wear a tinfoil hat but I'm just tired of bring not able to hit > 700!! Thanks for letting me rant!

Re: I am convinced the FICO algorithm is fixed..

Anonymous — Tue, 01 Mar 2011 17:19:03 GMT

This was from the quarterly FICO monitoring through this site. A few posts ago, I listed my 4 negative factors and 2 positive ones. I think I'm angry because with me the model has run out of legit reasons to ding me besides the debt to credit ratio and bk and lists dumb reasons like 13 years isn't enough time to generate a solid history, especially with an impeccable history post bk, almost 7 years ago!

Re: I am convinced the FICO algorithm is fixed..

RobertEG — Tue, 01 Mar 2011 20:25:53 GMT

I am currently a US citizen who, within the past year, became a resident alien in the Philippines. There are no consumer credit bureaus here, and thus of course, no credit scoring for consumers, let alone FICO scoring.

If you think creditor reliance on credit scoring risk analysis is detrimental to the consumer, try living in a society where decisions are made primarily on subjective evaluation, with no consideration of consumer risk analysis. One must compete for credit with those who have totally invisible prior credit histories, many of which are very poor histories, and thus jack up the interest for most types of credit. Typical CC interest rates here are 4% per month, and even secured loans come in at around 30% APR. Lower risk consumers pay the price for poor risk consumers.

Sure, credit score risk analysis is not perfect, but I would much rather have it than compete for credit without it. Just like many aspects of capitalism in the U.S., it may be subject to some abuse, but it works more often than not.

Re: I am convinced the FICO algorithm is fixed..

striders — Wed, 02 Mar 2011 06:46:35 GMT

I used to live in Singapore and Indonesia as part of my job. Back then, there is no such things as credit scoring although I believe Singapore now have some sort of credit scoring. The APR for credit cards were high, and don't get me started on Auto Loan interest rates!

However, the upside is that it made the people there tend NOT TO RELY ON CREDIT for purchases. They'll use cash if they HAVE IT, and don't if they DON'T HAVE IT.

So the upside is that it made the people be more concious on purchasing stuff and they ended saving more money for their retirement, etc. Compare this to the mindset of the people here in the U.S.A.. well.. you know the story..

@RobertEG wrote:
I am currently a US citizen who, within the past year, became a resident alien in the Philippines. There are no consumer credit bureaus here, and thus of course, no credit scoring for consumers, let alone FICO scoring.
If you think creditor reliance on credit scoring risk analysis is detrimental to the consumer, try living in a society where decisions are made primarily on subjective evaluation, with no consideration of consumer risk analysis. One must compete for credit with those who have totally invisible prior credit histories, many of which are very poor histories, and thus jack up the interest for most types of credit. Typical CC interest rates here are 4% per month, and even secured loans come in at around 30% APR. Lower risk consumers pay the price for poor risk consumers.
Sure, credit score risk analysis is not perfect, but I would much rather have it than compete for credit without it. Just like many aspects of capitalism in the U.S., it may be subject to some abuse, but it works more often than not.

Re: I am convinced the FICO algorithm is fixed..

Anonymous — Wed, 02 Mar 2011 14:17:10 GMT

I read your thread title and thought to myself "I'm so glad someone finally fixed that darn thing."

Re: I am convinced the FICO algorithm is fixed..

Anonymous — Wed, 02 Mar 2011 14:39:03 GMT

@Anonymous wrote:
I read your thread title and thought to myself "I'm so glad someone finally fixed that darn thing."

Re: I am convinced the FICO algorithm is fixed..

Anonymous — Wed, 02 Mar 2011 18:25:12 GMT

@Anonymous wrote:
@Anonymous wrote:
I read your thread title and thought to myself "I'm so glad someone finally fixed that darn thing."

Re: I am convinced the FICO algorithm is fixed..

Anonymous — Wed, 02 Mar 2011 18:58:53 GMT

@Anonymous wrote:
I read your thread title and thought to myself "I'm so glad someone finally fixed that darn thing."

My thought EXATLY when I saw this thread, but I thought to myself maybe it'd be offtopic if I posted that

Re: I am convinced the FICO algorithm is fixed..

creditchild — Thu, 03 Mar 2011 00:07:54 GMT

hey max this scoring stuff is all a joke. its crazy the way this stuff works. as i told someone before, most

of the advice we get here is all speculation. theres someone the controls this score stuff. i tried just about everything

to bring my scores up and i've been sitting at the same score for almost 8months. think about it for a minute, the more good

you do, the more your score goes down. for example when my credit card balances goes up, i'm quickly dinged,but just as fast

i get them back down(utilization) and i don't recover the points i've lost as quick. its crazy. remember no one thing works for everyone!

i've called the people at myfico and they can't even explain. and the simulator is a joke, i've tried to simulate what would happend if i paid down

my balances over a period of three months what would happen,it showed my credit would be well over 700,well its been over 6months and i'm

still in the lower 600's! its rediculous

Re: I am convinced the FICO algorithm is fixed..

Anonymous — Thu, 03 Mar 2011 02:01:17 GMT

That's how a lot of things work though. i'm in college and I had A's in my class, I missed one ten point quiz and it brought my score down to a C. I barely made it back to an A by the end of the semester even though I got 55 out of 50 on an exam. It's much easier to lower any kind of score than to raise it.

Re: I am convinced the FICO algorithm is fixed..

striders — Thu, 03 Mar 2011 04:22:23 GMT

Your comparison with the college quiz and/or grade failed. In college, you KNOW what is the OUTCOME of your grade or quiz if you miss xx points or questions. You CAN bring your grade UP if you study hard and aced future tests.

With credit scoring, you DO NOT know EXACTLY what would happen when you do certain things related to your financial.

My take? Credit scoring EXIST to benefit big banks AND **bleep** customers. Take a look at Experian FICO scoring: they no longer sell that to public. So if I apply for a credit and qualify for 5.99% but the bank said my Experian score is "low" and I only qualify for 9.99%, there is nothing I can do because I do not know the score.

@Anonymous wrote:
That's how a lot of things work though. i'm in college and I had A's in my class, I missed one ten point quiz and it brought my score down to a C. I barely made it back to an A by the end of the semester even though I got 55 out of 50 on an exam. It's much easier to lower any kind of score than to raise it.