@takeshi74 wrote:
@Chris679 wrote:Isn't it more logical to think that a creditor is simply concerned with your current obligation/ balance and your past payment history? I would think that if this payment history was important to underwriters then FICO would start including it in scoring models to better serve their customers.
I don't think it's logical to assume that all creditors have identical criteria. It's never just about score and that's why reports are pulled in addition to scores.
I think that is the concern. In the examples earlier, where NOTHING was allowed to carry over, and in the "No Data" sequence, the cardholder has not borrowed anything. In certain situations where an UW is tasked with looking in more detail at the CR, they don't see that any borrowing occurred.
Given enough time, the "no data" model will improve the FICO score, but while that time is passing the cardholder is not borrowing other funds, not building relationships with banks for regular lending, not really showing that they know how to borrow a substantial sum and pay it back according to a payment agreement. It's about building trust, the foundation of all lending, and putting that on display in the credit report.
@Chris679 wrote:
@NRB525 wrote:
@takeshi74 wrote:
@Chris679 wrote:Isn't it more logical to think that a creditor is simply concerned with your current obligation/ balance and your past payment history? I would think that if this payment history was important to underwriters then FICO would start including it in scoring models to better serve their customers.
I don't think it's logical to assume that all creditors have identical criteria. It's never just about score and that's why reports are pulled in addition to scores.
I think that is the concern. In the examples earlier, where NOTHING was allowed to carry over, and in the "No Data" sequence, the cardholder has not borrowed anything. In certain situations where an UW is tasked with looking in more detail at the CR, they don't see that any borrowing occurred.
Given enough time, the "no data" model will improve the FICO score, but while that time is passing the cardholder is not borrowing other funds, not building relationships with banks for regular lending, not really showing that they know how to borrow a substantial sum and pay it back according to a payment agreement. It's about building trust, the foundation of all lending, and putting that on display in the credit report.
I know what you are saying here I just don't think this is something to worry about in addition to the factors that we actually know affect approvals. For example in 2010 the first time I applied for Citi Forward I was denied based on "lack of use of revolving credit". This is a well known reason for denial and it did not make any difference to them that I had just paid off thousands of dollars in balances with a profit sharing bonus and waited for them to report zero balance because I didn't know any better. I sent them letters with copies of previous reports showing these balances and highlighting the very things that you are talking about and it did not matter, still denied. They could see these high balance and previous payment numbers on my reports and they made no difference. You know what did matter? Letting a tiny balance report the next month resulted in an approval for $8000.
For folks that are not experienced with credit scoring models they can be very confusing and I think it is best to advise them to simply worry about the things that we actually know affect FICO and approvals.
To speculate on your Citi situation, Chris, it is possible that their internal scoring was looking for current balances, presuming that regular users of revolving credit would have balances reporting. Given the volume of CC apps they look at, it is unlikely this UW group would want to go back through history in a manual review. I'm going to use this as a reason I let all my cards report balances 
And I agree; the debate about nothing reporting, one reporting, or everything reporting is not going to make a real difference in the score. Paying on time and keeping utilization low but above zero, and doing that for many months/years is what gets the FICO score improving.