topic Re: What does your software mean by "recent"? in myFICO® Product Feedback

What does your software mean by "recent"?

Anonymous — Thu, 22 Jan 2009 11:09:51 GMT

When your software explains why a score is not higher than it is, it often uses the word "recent" very ambiguously. E.g. "your most recent late payment was recent". Some people would consider "recent" to mean anytime in the past 10 years. Some would consider it to mean anytime in the past 10 minutes. There are lots of other meanings, which mostly depend on context. But your software doesn't provide enough context to give it meaning.

Please look at your software, where it decides whether to use the word "recent", and see what definition it's using for that word. It obviously has an exact definition, because otherwise your software would not be able to decide whether to use it or some other word.

Even if you never have time to fix your software to remove that ambiguity, it would be helpful to provide the definition here.

Re: What does your software mean by "recent"?

llecs — Thu, 22 Jan 2009 12:01:31 GMT

IMO, I don't see any other words they could use for a couple of reasons.

First, "recent" is a very vague term but maybe for the reason they want to protect the formula. If that portion of the formula were absolute, then they could easily say "A X year" whatever is "hurting your score". Then it would be known that the FICO damage is limited to X years and it wouldn't take much for others to compare note to narrow down the timeframe.

Second, the formula compares your negatives to everyone else's. You can't have an absolute answer because FICO grades on a curve. This is evidenced by the use of buckets.

Finally, FICO uses the law of diminishing returns to score most items. In other words, over time, a baddie will be less of an impact to your score. The word "recent" is used to describe that lessening impact.

Re: What does your software mean by "recent"?

Anonymous — Thu, 22 Jan 2009 12:37:38 GMT

If they really wanted to take that attitude, and be honest about it, they would simply say so, instead of using ambiguous words to evade the issue. You're implying that you think they're being dishonest about it to protect their secret formula. Far more likely, the person who put the word "recent" in the software was just not thinking clearly.

What would you do if you found a "recent late payment" but no late payments were on your report for the past few years? Would you just assume by recent they mean five years ago? Because you want to give them the benefit of the doubt and not question whether they might have bugs in their software?

Re: What does your software mean by "recent"?

llecs — Thu, 22 Jan 2009 13:55:15 GMT

axxy wrote:
If they really wanted to take that attitude, and be honest about it, they would simply say so, instead of using ambiguous words to evade the issue. You're implying that you think they're being dishonest about it to protect their secret formula. Far more likely, the person who put the word "recent" in the software was just not thinking clearly.

What would you do if you found a "recent late payment" but no late payments were on your report for the past few years? Would you just assume by recent they mean five years ago? Because you want to give them the benefit of the doubt and not question whether they might have bugs in their software?

Great point. If I had a "recent late" comment, and if it didn't list how long ago that was, and knowing from my CRs that my last late was nearly 7 yrs ago, I'd be concerned. If any FICO programmer is reading this, it would be helpful on page 2 & 3 (things helping or hurting) to actually list the TL that it is referenced to. This way we aren't scratching our heads trying to figure the source for the comment.

Re: What does your software mean by "recent"?

Anonymous — Fri, 23 Jan 2009 00:25:49 GMT

Does anyone have any clue at all what MyFico means by "recent"? If everyone who has that message would post how recent it was, we might be able to figure out how many years they mean by that word.

Re: What does your software mean by "recent"?

Barry — Sat, 24 Jan 2009 00:20:46 GMT

How recent is recent? Good question. Unfortunately, the answer might not be so good.

As with most pieces of the FICO scoring puzzle, the number of months/years considered to be recent will vary according to: 1) the particular factor, such as a late payment; and 2) according the overall credit profile being scored (think buckets).

Basically, within the FICO scoring realm, recent is a relative term that can mean just about any length of time. It can be one month, one year, or a few years. The important thing to keep in mind is that if a negative factor indicates something is too recent it means that with the passage of time that particular factor will diminish in its impact on the score.

Hope that helps at least a little.

Re: What does your software mean by "recent"?

Anonymous — Sat, 24 Jan 2009 00:29:42 GMT

When you say the impact will diminish with the passage of time, do you mean it will diminish once per year? Or are there some years it won't diminish at all, because it only diminishes once every several years?

Is there a particular number of years when the impact of "settlement accepted on this account" will diminish significantly? Or is it likely to diminish the most at 7 years when it drops off?

Re: What does your software mean by "recent"?

Barry — Sat, 24 Jan 2009 00:54:14 GMT

When I say "the impact will diminish with the passage of time" I specifically mean that over time you will get more points for that factor. As for when those points increase, that can vary from multiple times per year initially to less frequently as time goes on.

A status such as "settlement accepted on this account" is a perfect example of what I've just described. That is, during the first few years the point increases will be more frequent than the later years. And as for whether the points you gain when it falls off after 7 years will be more than the points you gain from going from X months to Y months, that will depend on the rest of the credit report.

The important thing to remember is that the older it gets the less impact it has.