topic Re: FICO 08 discounting AU account balances in Understanding FICO® Scoring

FICO 08 discounting AU account balances

IamB2 — Tue, 12 Aug 2014 15:58:42 GMT

Hi Everyone,

I just got an alert from Barclay's that my score has changed. Logged in and sure enough score went from 697 to 683. YUP - 14 point drop. So I got worried and to make sure nothing hinky is going on, I purchased the score and report from TU on here. It appears that the drop was due to ALL my cards reported a $0 balance. There is a balance on an AU account (About 10%), but that is it. This month I left about 19% report on the Barclay's card (3% total util), but it hasn't reported yet. Due date was on 8/9. Should report soon.

But it is funny, though. A while back, I posted a note about how the simulator seemed to ignore balances on AU accounts. Now I think it is confirmed that FICO 08 doesn't account for balances on AU when it comes to showing credit usage. Here is a screenshot of what changed.

Left (Carrying a balance on two cards - besides the AU account). Right (carrying no balance besides the AU account). Left shows the score of 697 while the right has a score of 683.

At least now I know not to worry about it if this jumps. But I was trying to rotate which card shows balance and it looks like the update was done just before Barclay's reported. It will report a balance of $191/$1000 so about 19% or so. Total Util is at about 3%. Just some data points. That is all.

Re: FICO 08 discounting AU account balances

mongstradamus — Tue, 12 Aug 2014 19:50:03 GMT

@IamB2 wrote:
Hi Everyone,

I just got an alert from Barclay's that my score has changed. Logged in and sure enough score went from 697 to 683. YUP - 14 point drop. So I got worried and to make sure nothing hinky is going on, I purchased the score and report from TU on here. It appears that the drop was due to ALL my cards reported a $0 balance. There is a balance on an AU account (About 10%), but that is it. This month I left about 19% report on the Barclay's card (3% total util), but it hasn't reported yet. Due date was on 8/9. Should report soon.

But it is funny, though. A while back, I posted a note about how the simulator seemed to ignore balances on AU accounts. Now I think it is confirmed that FICO 08 doesn't account for balances on AU when it comes to showing credit usage. Here is a screenshot of what changed.

Left (Carrying a balance on two cards - besides the AU account). Right (carrying no balance besides the AU account). Left shows the score of 697 while the right has a score of 683.

At least now I know not to worry about it if this jumps. But I was trying to rotate which card shows balance and it looks like the update was done just before Barclay's reported. It will report a balance of $191/$1000 so about 19% or so. Total Util is at about 3%. Just some data points. That is all.

Same thing happened to me when i let my amex TE, which is an au account , report. I got an 20 points ding :-) down from 807 to 784 . Once i let my BCP report again it went back up to 807, so I learned my lesson let my main cards report balances :-)

Re: FICO 08 discounting AU account balances

pizzadude — Sat, 16 Aug 2014 14:22:25 GMT

@IamB2 wrote:
Hi Everyone,

I just got an alert from Barclay's that my score has changed. Logged in and sure enough score went from 697 to 683. YUP - 14 point drop. So I got worried and to make sure nothing hinky is going on, I purchased the score and report from TU on here. It appears that the drop was due to ALL my cards reported a $0 balance. There is a balance on an AU account (About 10%), but that is it. This month I left about 19% report on the Barclay's card (3% total util), but it hasn't reported yet. Due date was on 8/9. Should report soon.

But it is funny, though. A while back, I posted a note about how the simulator seemed to ignore balances on AU accounts. Now I think it is confirmed that FICO 08 doesn't account for balances on AU when it comes to showing credit usage. Here is a screenshot of what changed.

Do you share the same address / family name as the primary cardholder? I think that may make a difference whether AU accounts are included...

Re: FICO 08 discounting AU account balances

mongstradamus — Sat, 16 Aug 2014 14:29:57 GMT

@pizzadude wrote:
@IamB2 wrote:
Hi Everyone,

I just got an alert from Barclay's that my score has changed. Logged in and sure enough score went from 697 to 683. YUP - 14 point drop. So I got worried and to make sure nothing hinky is going on, I purchased the score and report from TU on here. It appears that the drop was due to ALL my cards reported a $0 balance. There is a balance on an AU account (About 10%), but that is it. This month I left about 19% report on the Barclay's card (3% total util), but it hasn't reported yet. Due date was on 8/9. Should report soon.

But it is funny, though. A while back, I posted a note about how the simulator seemed to ignore balances on AU accounts. Now I think it is confirmed that FICO 08 doesn't account for balances on AU when it comes to showing credit usage. Here is a screenshot of what changed.

Do you share the same address / family name as the primary cardholder? I think that may make a difference whether AU accounts are included...

I don't even think that matters anymore , but i could be wrong. I have an amex TE with my mom same address and same last name. When i let it report as my only account for optimal scoring, i got hit and score went down by 25 points, till one of my "main cards" reported an few weeks later. Just an data point, i know my situation isn't liek everybody else

Re: FICO 08 discounting AU account balances

pizzadude — Sat, 16 Aug 2014 14:39:48 GMT

I would be very surprised if FICO08 completely disregards AU accounts; the few "official" explanations that I've seen from Fair Issac indicate they are still included however there are more advanced algorithms in place to weed out frivolous AUs. Not sure how this works in the real world though....

Re: FICO 08 discounting AU account balances

mongstradamus — Sat, 16 Aug 2014 15:18:02 GMT

@pizzadude wrote:

I would be very surprised if FICO08 completely disregards AU accounts; the few "official" explanations that I've seen from Fair Issac indicate they are still included however there are more advanced algorithms in place to weed out frivolous AUs. Not sure how this works in the real world though....

Yea since nobody really knows their algorithms , its hard to juded how little or how much au accounts are factored in. I learned hardway that not to rely on AU account to report for utilization purposes didn't think it would be that big of an hit :-(

Re: FICO 08 discounting AU account balances

pizzadude — Sat, 16 Aug 2014 15:47:03 GMT

Yeah we can speculate but it's hard to pin down. Perhaps FICO08 only includes AU accounts for spouses or something similar....

Re: FICO 08 discounting AU account balances

vanillabean — Sat, 16 Aug 2014 20:32:02 GMT

The financial relationship of DW and me is screwed on tighter than the lid on an unopened jar of jam. Our credit reports list the same history of addresses, and we have had a joint credit card for a long time. Yet not a single AU card is used for utilization.

Re: FICO 08 discounting AU account balances

pizzadude — Sat, 16 Aug 2014 21:28:40 GMT

@Anonymous-own-fico wrote:
The financial relationship of DW and me is screwed on tighter than the lid on an unopened jar of jam. Our credit reports list the same history of addresses, and we have had a joint credit card for a long time. Yet not a single AU card is used for utilization.

Maybe AU accounts aren't used for utilization because in almost all cases AUs are not liable for their puchases ( AMEX being the obvious exception ), only the original cardmember is.

I'm guessing they would still be factored into AAoA calculations though.

Re: FICO 08 discounting AU account balances

vanillabean — Sat, 16 Aug 2014 22:30:03 GMT

@pizzadude wrote:

I'm guessing they would still be factored into AAoA calculations though.

Probably not. My EX AAoA is six years with a score of 849, while DW's numbers are eleven and 850; I can find no other suspect than the AAoA to account for the discrepancy.

Re: FICO 08 discounting AU account balances

pizzadude — Sat, 16 Aug 2014 22:34:50 GMT

@Anonymous-own-fico wrote:
@pizzadude wrote:

I'm guessing they would still be factored into AAoA calculations though.

Probably not. My EX AAoA is six years with a score of 849, while DW's numbers are eleven and 850; I can find no other suspect than the AAoA to account for the discrepancy.

Well I'm flummoxed then. I'll have to see if we can get any clarification on this.

Re: FICO 08 discounting AU account balances

Revelate — Sun, 17 Aug 2014 02:56:30 GMT

@pizzadude wrote:
@Anonymous-own-fico wrote:
@pizzadude wrote:

I'm guessing they would still be factored into AAoA calculations though.

Probably not. My EX AAoA is six years with a score of 849, while DW's numbers are eleven and 850; I can find no other suspect than the AAoA to account for the discrepancy.

Well I'm flummoxed then. I'll have to see if we can get any clarification on this.

As I understand it anecdotally from user reports post Scorewatch migration, an AU counts as all or nothing under FICO 8 depending on whether the account is accepted or not based on their abuse algorithm, whereas FICO '04 they all counted. Other than that they work the same way under the new scoring model.

ETA: I think the consumer confusion is a result of the seemingly inconsistent abuse algorithm, the details of which will never be released short of some data or confidentiality breach.

Re: FICO 08 discounting AU account balances

Barneygirl — Tue, 21 Oct 2014 20:08:06 GMT

@pizzadude wrote:

I would be very surprised if FICO08 completely disregards AU accounts; the few "official" explanations that I've seen from Fair Issac indicate they are still included however there are more advanced algorithms in place to weed out frivolous AUs. Not sure how this works in the real world though....

Proof that FICO08 completely disregards AU accounts..... I am AU on my sister's capital one card. We have the same last name, same address, and we are co-owners of the same home. When I paid off all of MY credit cards this month, and we left $2000 on her card, FICO08 dropped my score almost 20 points!!!!! And, the weird, and confirming thing, is that last month when I used the score simulator it showed only MY CC balances, not hers... and this month is shows NO balances on ANY CC!!!

Strange thing is.... my sis and I have a very valid reason to have a CC together, and I should NOT be considered a "frivilous" AU... same name, same address.

Re: FICO 08 discounting AU account balances

MarineVietVet — Tue, 21 Oct 2014 20:33:36 GMT

@pizzadude wrote:

I would be very surprised if FICO08 completely disregards AU accounts; the few "official" explanations that I've seen from Fair Issac indicate they are still included however there are more advanced algorithms in place to weed out frivolous AUs. Not sure how this works in the real world though....

I agree with this.

Although I have been known to be less than correct once in awhile!!