topic Re: Upgraded FICO score for no reason? in Understanding FICO® Scoring

Upgraded FICO score for no reason?

Anonymous — Thu, 08 May 2014 21:24:25 GMT

Hello all. I got an email from score watch telling me that I have an upgraded credit score and a complimentry equifax report...

I logged on to see my score go from 742 to 779 and some explanation saying how the calculations are different.

Anyone else have this happen?

Re: Upgraded FICO score for no reason?

Involver — Thu, 08 May 2014 21:27:53 GMT

The site is migrating the EQ FICO score sold from the 04 model to the 08 model.

Everybody's is going to switch eventually.

Nice score.

Re: Upgraded FICO score for no reason?

Anonymous — Thu, 08 May 2014 21:35:24 GMT

Not really sure what that means... can you explain?

And thanks... I felt like I could never break that 750 barrier for some weird reason.

Re: Upgraded FICO score for no reason?

Anonymous — Thu, 08 May 2014 21:57:02 GMT

There are lots of ways of calculating a score, and a switch from one scoring model to another is currently in progress.

Here's a document that explains the differences:

http://www.myfico.com/crediteducation/questions/fico8.aspx

Another way of saying it is that there's not a single "right" score -- the lending industry is diverse, and uses a bunch of different scoring systems.

Re: Upgraded FICO score for no reason?

Revelate — Thu, 08 May 2014 22:00:03 GMT

Official announcement here: http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/FICO-8-Announcement/m-p/2996572#U2996572

Re: Upgraded FICO score for no reason?

MidnightJester — Fri, 09 May 2014 00:32:55 GMT

Seems the new scoring model is designed to make people like it more. Almost everyone has jumped points most by alot.

Re: Upgraded FICO score for no reason?

Shogun — Fri, 09 May 2014 01:27:13 GMT

A little info on the FICO 08. And it's getting even more popular with CC companies.

What Changed in FICO® 8 Score

Here's a look at what changed the most in creating the FICO 8 score.

High credit card usage

FICO 8 score is more sensitive to highly utilized credit cards. So if your credit report shows a high balance close to the card's limit, your score will likely lose more points than it would have previously. You may want to consider keeping any monthly credit card balance low.

Isolated late payments

If a lender reports to the credit bureau that you were at least 30 days late with your payment, your FICO 8 score will likely lose points. If the late payment is an isolated event and your other accounts are in good standing, the FICO 8 score is more forgiving compared with scores from previous FICO formulas. However if your credit report shows numerous late payments, the reverse is true and your FICO 8 score will likely lose more points.

Authorized user of credit card

Every generation of the FICO score formula has included authorized user credit card accounts when calculating a person's score. FICO 8 score continues that policy. This can help people benefit from their shared management of a credit card account. It also helps lenders by providing scores that are based on a full snapshot of the consumer's credit history.

To protect lenders and honest consumers, the FICO 8 formula substantially reduces any benefit of so-called tradeline renting. That's a credit repair practice that entices consumers into being added to a stranger's credit account in order to misrepresent their credit risk to lenders.

Small-balance collections accounts

FICO 8 score ignores small-dollar "nuisance" collection accounts in which the original balance was less than $100.

Re: Upgraded FICO score for no reason?

Revelate — Fri, 09 May 2014 01:53:14 GMT

@MidnightJester wrote:
Seems the new scoring model is designed to make people like it more. Almost everyone has jumped points most by alot.

It's a self-selecting population; that skews the analysis badly

People don't typically find this forum unless something didn't go right for them... occasionally the gold-plated person walks in off the street, but it's mostly people that started with negative information, or no information, and wanted to know more and start improving.

Anecdotally FICO '08 seems to weight more recent information more heavily, whereas FICO '04/'98/'95 once you got dinged you were stuck pretty much till it was gone off your report. So mixed files like me who have aging derogatories more than ~2 years old, tend to see a stronger uptick in a FICO '08 model than a FICO '04 one.

We have very few people who incur a derogatory after they've found this forum: I'm likely one of the lone exceptions in that I paid an old tax bill that the IRS was complaining about, figuring that would go into the database and the IRS officer would check it before filing the lien two weeks later: newp. With the recent derogatory (and prior tax liens on all 3 reports), Beacon 5 (FICO '04) barely moved, lost 5 points, but lost 50 points on EX '08 and 40+ on TU '08... and all three scores looked remarkably similar after that IRS lien landed. At the six month mark of the lien issuance my scores have started to diverge a bit, EQ '04 is still flat, TU / EX seeing slight but noticible improvements in comparison (10-20 points divergence). Also if it penalizes high balances more heavily, with the zero sum nature of tradeline and aggregate utilization, it's possible that having low utilization is a bigger benefit as well and virtually everyone on the forum self-selects into that pool.

Likewise people that are gold-plated, usually see some benefit but I don't fully know why this is: it's possible that in our theory of it's looking at shorter history longer AAoA's and longer tradelines suffer increased diminishing returns... added to the fact that the FICO '08 scores have a higher obtainable max score (can actually hit 850 now on the base / classic score) which wasn't doable on the older ones.

Anyway it's a complicated mess but generally people on this forum have seen a slight increase in their scores with the conversion: I don't know if that holds true over the entirety of the FICO consumer dataset of which we are an incredibly small group of outliers.

Re: Upgraded FICO score for no reason?

minime88 — Mon, 12 May 2014 18:54:29 GMT

How is it that everyone scores are going up with this upgrade. Mine went from 703 to 670. What am I doing wrong?

Re: Upgraded FICO score for no reason?

Anonymous — Mon, 12 May 2014 18:56:14 GMT

@minime88 wrote:
How is it that everyone scores are going up with this upgrade. Mine went from 703 to 670. What am I doing wrong?

http://www.myfico.com/crediteducation/questions/fico8.aspx

Re: Upgraded FICO score for no reason?

EW800 — Mon, 12 May 2014 20:37:16 GMT

@minime88 wrote:
How is it that everyone scores are going up with this upgrade. Mine went from 703 to 670. What am I doing wrong?

The link that 5387 provided explains it very well. I would guess that the new scoring model puts more emphasis on something that might be an issue in your proile, such as higher balances or more than one recent late payments. It sounds like these areas can help more than before and hurt more than before, depending on your circumstances.

Re: Upgraded FICO score for no reason?

toi34 — Sun, 18 May 2014 21:23:45 GMT

I'm PISSED!!!!!!!! I just got the email, checked my "new" score, and I've lost 28 points....WTH!!!!

Re: Upgraded FICO score for no reason?

Anonymous — Sun, 18 May 2014 21:29:27 GMT

@toi34 wrote:
I'm PISSED!!!!!!!! I just got the email, checked my "new" score, and I've lost 28 points....WTH!!!!

http://www.myfico.com/crediteducation/questions/fico8.aspx

Re: Upgraded FICO score for no reason?

Anonymous — Sun, 18 May 2014 21:40:57 GMT

Hey, it took me from 693 to 730 today!

Re: Upgraded FICO score for no reason?

whydoineedaname — Sun, 18 May 2014 22:56:47 GMT

@MidnightJester wrote:
Seems the new scoring model is designed to make people like it more. Almost everyone has jumped points most by alot.

I dropped 6 points :-(

Re: Upgraded FICO score for no reason?

StevenRK — Mon, 19 May 2014 02:43:23 GMT

My score jumped from 783 to 805. I'm confused now more than ever. I wish the scoring system was simpler and more consistant. My Fako scores are in the 760's, myFico score is 805 and my Discover score is 850. Which one is real has me stumped.

Re: Upgraded FICO score for no reason?

Stanic413 — Mon, 19 May 2014 11:28:45 GMT

Mine jumped a little. 715 to 731, but a mortgage inquiry also fell off btwn my last pull and this so not sure how much was related directly to the upgrade. Either way, it's an increase. Anxious to see if there's a big change in my Barclay and Discover TU score since it fell off.

Re: Upgraded FICO score for no reason?

Anonymous — Mon, 19 May 2014 11:41:05 GMT

@StevenRK wrote:
My score jumped from 783 to 805. I'm confused now more than ever. I wish the scoring system was simpler and more consistant. My Fako scores are in the 760's, myFico score is 805 and my Discover score is 850. Which one is real has me stumped.

There is not a single "right" score.

If different formulas are applied at different times to reports that may vary across the bureaus, then the results will be different.

If FICO ceased to exist, this problem would persist, because individual lenders have all sorts of their own formulas as well.

Some scores are better than others, because they more accurately forecast future delinquency.

Re: Upgraded FICO score for no reason?

vanillabean — Tue, 20 May 2014 01:54:47 GMT

@Shogun wrote:

Here's a look at what changed the most in creating the FICO 8 score.
High credit card usage

FICO 8 score is more sensitive to highly utilized credit cards. So if your credit report shows a high balance close to the card's limit, your score will likely lose more points than it would have previously. You may want to consider keeping any monthly credit card balance low.

My upgraded score is 844. That’s with balances on multiple cards, one of them having a 31% utilization!

Re: Upgraded FICO score for no reason?

Anonymous — Wed, 21 May 2014 03:41:54 GMT

I am definitely a fan of the recent upgrade. I went from a 699 to an 802 overnight. I've spent the past year waiting to see a 7 in the front of my credit score and somehow I skipped the 700's all together. I guess the 08 model puts a lot less emphasis on my old baddies (2 collections and 1 charge-off that are 5+ years old) and gives me more credit for having a low util (<4%).

I see an app spree in my future.