topic The credit scores ARE bank-biased. in General Credit Topics

The credit scores ARE bank-biased.

Anonymous — Sat, 01 Aug 2009 20:55:56 GMT

Have you ever wondered why it is that you can have 20 credit cards, all in good paying status for over 2 years yet your score barely moves? But let you get one 30 day late and your score drops severely?

My story: I've financed all but one of the cars I ever owned, paid off a few of them entirely, traded in the rest. Recently I had been using smaller banks that would work with my credit challenges and still finance me and I would notice that my score barely budged. RIght now as I type this I have 5 paid off car loans within the span of 5 years. yes, an average of one car paid off each year. Yet, for some reason, my score never budged.

In June I bought a new 2009 Altima which was financed through NMAC. Balance is well over $30k all said. I figure with the added debt that my credit score should have taken a major hit. Imagine my surprise when the apartment complex I'm going to this month ran Transunion and, wouldn't you know, from the last time the report was pulled in June for the Altima, to now for the apartment, where they both pulled directly from Transunion and handed me the reports, that my score actually jumped 100 points? In two months? That's with a BK showing and double the debt load. The only thing that really changed is the new NMAC loan. Other financing companies the score would have dropped like a bomb. It's appearing to lend credence to the theory that the types of banks (subprime vs. prime) matter and get scored differently.

I will say that my credit experience has been more than positive since I locked out Experian. I've gotten some denials but it hasn't broken my stride at all.

(For the record my goal is to get my credit score sufficiently high that I can get a high limit card and consolidate the majority of my others, minimizing my monthly payments, then relocate to another state, buy a home, get a trophy wife, and live life to the fullest!)

Re: The credit scores ARE bank-biased.

Anonymous — Sat, 01 Aug 2009 23:18:07 GMT

The presence of an installment loan usually helps the score, because of the "types of credit" aspect. The specific balance or percentage owed on an installment loan has very little or no effect on the score.

If a good credit profile is maintained at a steady level over a period of years, the only aspect that can change is age, and as age increases, that aspect gets closer and closer to its maximum.

One 30-day late torpedos the score because a high percentage of consumers have 0 lates, and that single late means your comparative ranking drops drastically in one move ...

Re: The credit scores ARE bank-biased.

Anonymous — Sat, 01 Aug 2009 23:51:13 GMT

Having worked for a credit agency, I can tell you that one part of what you said isn't correct.

The amount of debt you have - total debt - does affect your score. If it didn't, paid accounts wouldn't increase the score thereafter. Not just on revolving accounts, but any account carrying a balance. Once you get below 50% of that balance, then your score (should) go up. "Types of credit" is another aspect, but nullified due to the fact that the only type of tradeline I don't have is a mortgage. Installment tradelines already exist.

The point is though, basically, that to the credit scoring engine used when pulled by a creditor, a $15k loan from some no-name or subprime bank is going to look worse than a $30k loan at a credible prime lender. Which is fine...it just adds credibility to the argument that the scoring models are always going to be anti-consumer no matter what you do. Can't get a prime lender without good credit; can't get good credit without prime lenders. Chicken and the egg.

Re: The credit scores ARE bank-biased.

marty56 — Sun, 02 Aug 2009 12:01:56 GMT

Except with the comment of certian FAKO scoring models which complain about not having enough "premium" bank cards, I have not seen any evidence that having say an Aspire credit card is scored differently than having a BofA or even a CU based credit card. For that matter, having a subprime auto loan or mortgage isnt socred and different either.

I had a subprime mortgage and a Sams card both of which I got when I was subprime and I can assure you my credit scores are not being hurt by them. LOL the Sams card indirectly caused my 120 day late so I guess you could say my credit score was hurt by it.

People who are trying to build or repair their credit should not worry about which credit card they get as long as it meets their needs and dosent charge a monthly fee.

Re: The credit scores ARE bank-biased.

Anonymous — Sun, 02 Aug 2009 13:37:42 GMT

It's the only logical answer. I have one prime card right now, four subprimes that got closed, and then four other subprimes. I've had the subprimes for well over two years in some cases with zero lates. My credit score didn't start climbing until I got the prime card, fresh, no history. Coincedence?

As I said I have financed many cars and my credit report reflects each of those cars being paid off in full with no late activity. I've got four blatantly subprime lender accounts which all show paid off with zero lates. Never once did my credit score increase. All of a sudden I finance through NMAC, not paid off, and it jumps big time. Coincedence?

The complex pulled the report by way of Credit Retriever, a Transunion product. Now maybe its scoring is factoring in additional things beyond a straight FICO or FAKO pull, like the fact I'm not on a predator database or anything like that, are being added as points. But it does list derogatory credit factors which are standard on reports, and there are no sections that speak to the non-credit-report factors. The only other possibility is that they're using a different scoring model than the plain jane FICO, possibly the newer FICO 08?

Re: The credit scores ARE bank-biased.

Anonymous — Sun, 02 Aug 2009 14:24:51 GMT

@Anonymous wrote:

(For the record my goal is to get my credit score sufficiently high that I can get a high limit card and consolidate the majority of my others, minimizing my monthly payments, then relocate to another state, buy a home, get a trophy wife, and live life to the fullest!)

LOL.

Trophy wife and minimum monthly payments.....hmmmm, you might need to go over that part again. LOL.

Good luck. As I always say, have passionate goals and a plan!

Re: The credit scores ARE bank-biased.

marty56 — Sun, 02 Aug 2009 15:35:09 GMT

My goal is to be a trophy husband and to know what happens to me when I am bad, very bad.

Re: The credit scores ARE bank-biased.

Anonymous — Sun, 02 Aug 2009 16:32:45 GMT

Just so you know Marty, trophy husbands require "Six Pack Abs" and the below example doesn't usually work LOL Yes, I told DW I wanted to be a kept man.... LOL

Re: The credit scores ARE bank-biased.

2wheel — Sun, 02 Aug 2009 18:43:14 GMT

Where do you find time to google all these images LOL

Re: The credit scores ARE bank-biased.

Anonymous — Sun, 02 Aug 2009 19:03:36 GMT

took all of 20 seconds

www.google.com

click on IMAGES

type in "six pack abs"

and wouldn't you know it, you see this very cool pic to make a funny post on myfico.com. LOL. Google, gotta love it.

Re: The credit scores ARE bank-biased.

Anonymous — Sun, 02 Aug 2009 19:42:10 GMT

All you folks are forgetting that you have to compare the SAME score to have any sort of a meaningful comparison. There are more than two dozen FICO models sold by Fair Isaac for different purposes. And in this case, one of the scores mentioned isn't even a FICO score.

CreditRetriever is a product of TransUnion marketed to landlords for credit checks. You can read about it at:

http://www.creditretriever.com

On this page:

http://www.creditretriever.com/products_credit.asp

I read the following:

Our scoring model was developed to balance:

Occupancy and risk – you can accept more occupants while reducing your exposure to risk
Accuracy and speed – you will receive accurate decisions in seconds, allowing you to select the best residents and reduce applicant flight
Compliance and efficiency – you can help protect yourself against compliance claims by using our services"

---

In other words, the CreditRetriever score is a model developed by and sold by TransUnion to landlords and has nothing whatever to do with Fair Isaac FICO scoring models.

I don't know what model NMAC pulled from TransUnion for the auto loan, but it certainly wasn't the Credit Retriever score. There is a FICO score for automobile dealers, but I've got no idea if that is what NMAC pulled.

Anyway--remember that you can't compare apples and oranges. Different scoring models don't even use the same scale. (Top FICO number is 850--I've seen other models go to 950.)

Re: The credit scores ARE bank-biased.

marty56 — Mon, 03 Aug 2009 12:40:57 GMT

LOL, the six pack abs photo was great.

Re: The credit scores ARE bank-biased.

Anonymous — Mon, 03 Aug 2009 13:18:32 GMT

@Anonymous wrote:
All you folks are forgetting that you have to compare the SAME score to have any sort of a meaningful comparison. There are more than two dozen FICO models sold by Fair Isaac for different purposes. And in this case, one of the scores mentioned isn't even a FICO score.

CreditRetriever is a product of TransUnion marketed to landlords for credit checks. You can read about it at:
http://www.creditretriever.com

On this page:
http://www.creditretriever.com/products_credit.asp
I read the following:

"
Our scoring model was developed to balance:
Occupancy and risk – you can accept more occupants while reducing your exposure to risk
Accuracy and speed – you will receive accurate decisions in seconds, allowing you to select the best residents and reduce applicant flight
Compliance and efficiency – you can help protect yourself against compliance claims by using our services"
---

In other words, the CreditRetriever score is a model developed by and sold by TransUnion to landlords and has nothing whatever to do with Fair Isaac FICO scoring models.

I don't know what model NMAC pulled from TransUnion for the auto loan, but it certainly wasn't the Credit Retriever score. There is a FICO score for automobile dealers, but I've got no idea if that is what NMAC pulled.

Anyway--remember that you can't compare apples and oranges. Different scoring models don't even use the same scale. (Top FICO number is 850--I've seen other models go to 950.)

What you say is valid. But two different models, even between automotive and rental, are not going to result in a 100 point disparity. Pulling my FICO from myFICO reveals that the score from CreditRetriever is almost spot on, meaning the score did increase. There is a bit of a variance...but nowhere near 100 points, more like 10.

Re: The credit scores ARE bank-biased.

cobaltnv — Mon, 03 Aug 2009 16:16:33 GMT

Any correlation between Fico and non-Fico scores is entirely accidental. DIfferent scoring models can and do differ by 100 pts. Comparing a Fico score to a non-Fico score is a waste of time. Trying to come up with scoring details of the FIco formula by looking at non-Fico scores is just going to confuse you (and others reading your posts).

Re: The credit scores ARE bank-biased.

marty56 — Mon, 03 Aug 2009 22:32:21 GMT

@cobaltnv wrote:
Any correlation between Fico and non-Fico scores is entirely accidental.

I would say and unlucky.

Re: The credit scores ARE bank-biased.

haulingthescoreup — Tue, 04 Aug 2009 00:17:09 GMT

OP, it's very common for FICO scores to remain stagnant for what seems like forever. If your AAoA or your longest history just recently moved into the next higher tier, if you have no lates, or if you have serious lates that aren't falling off yet, if your util remains level, then there are no changes in your credit significant enough to trigger a score change. There isn't a steadily increasing set of points that go with gradual decreases in util or increases in age --util has to change to a certain percentage, or the number of years has to move into a new tier (5 years or above, 8 years or above, and so forth.)

I'm pretty much at this spot now. There won't be any additional changes unless I can get my serious derog off, or until my AAoA hits 5 years (between 7 and 11 months, depending on the credit report.)

And yes, a new late is devastating --typically 50 points. That's because the FICO scoring formulae are attempting to predict risk. If you suddenly have a late payment, you are much, much riskier than when you were just trudging along.

Re: The credit scores ARE bank-biased.

fishbjc — Tue, 04 Aug 2009 01:29:32 GMT

TXJOHN: Who gave you permission to post a picture of my husband on here?

Re: The credit scores ARE bank-biased.

Anonymous — Tue, 04 Aug 2009 01:47:07 GMT

LOL

Re: The credit scores ARE bank-biased.

wndrwmn78 — Wed, 05 Aug 2009 04:08:28 GMT

@haulingthescoreup wrote:
OP, it's very common for FICO scores to remain stagnant for what seems like forever. If your AAoA or your longest history just recently moved into the next higher tier, if you have no lates, or if you have serious lates that aren't falling off yet, if your util remains level, then there are no changes in your credit significant enough to trigger a score change. There isn't a steadily increasing set of points that go with gradual decreases in util or increases in age --util has to change to a certain percentage, or the number of years has to move into a new tier (5 years or above, 8 years or above, and so forth.)

I'm pretty much at this spot now. There won't be any additional changes unless I can get my serious derog off, or until my AAoA hits 5 years (between 7 and 11 months, depending on the credit report.)

And yes, a new late is devastating --typically 50 points. That's because the FICO scoring formulae are attempting to predict risk. If you suddenly have a late payment, you are much, much riskier than when you were just trudging along.

Thanks for posting that, hauling...I was wondering if 5 years was a golden point. My AAoA is also around yours, 4 years and 3 months. If only I had found this place a month sooner and hadn't gotten my stinkin' Juniper card in March! I would have been at 5 years if not already, very soon.

Re: The credit scores ARE bank-biased.

Anonymous — Wed, 05 Aug 2009 04:35:35 GMT

@cobaltnv wrote:
Any correlation between Fico and non-Fico scores is entirely accidental. DIfferent scoring models can and do differ by 100 pts. Comparing a Fico score to a non-Fico score is a waste of time. Trying to come up with scoring details of the FIco formula by looking at non-Fico scores is just going to confuse you (and others reading your posts).

The bottom line is that the score increased by 100 points, and the only...ONLY action that could have triggered such a substantial increase, is the addition of NMAC. Period. The aging accounts would not have been it - the longest account is well over 10 years now and would not have been affected by a two month span of transactions.

No...the scoring is giving preference to NMAC versus a subprime lender. And that's fine...but I really wish the bureaus would be subject to disclosure on those matters.