@cashnocredit wrote:These days it's what bank's computers want. They balance risk against expected profits. They generally tolerate larger risks on accounts where the expected profits are larger. FICO scores are risk scores and don't address the profit side. FICO (the corporation) also provides capacity scores that estimate how much additional credit can be safely extended. This side of FICO is rarely discussed (except amongst bankers) but is very important and really second only to FICO risk scores.
A big problem with prepaying, instead of PIF after the statement cuts, is that usage from CRA's reports is lacking and it appears the consumer has outstanding credit that they simply don't use. Banks can't make money extending unused credit. Used judiciously, prepaying on most cards can optimize a FICO score but doing it all the time will kill your capacity scores and decrease how much profit a bank can expect to make from the consumer.
Not certain on this one. Experian explicitly reports payments made over a given month, it's easy to figure out from there what our monthly spend is. Because we don't see explicitly what's included in the customer side of the pull (read: the banks, not us) it's a good bet that if EX is showing that to us, then it's nearly guarunteed the lenders will get it too.
I think it's reasonable to expect EQ/TU have similar data collection as well (if it's being reported to EX... it probably is to all 3) just they don't display it to us on our reports.
@Revelate wrote:
@cashnocredit wrote:These days it's what bank's computers want. They balance risk against expected profits. They generally tolerate larger risks on accounts where the expected profits are larger. FICO scores are risk scores and don't address the profit side. FICO (the corporation) also provides capacity scores that estimate how much additional credit can be safely extended. This side of FICO is rarely discussed (except amongst bankers) but is very important and really second only to FICO risk scores.
A big problem with prepaying, instead of PIF after the statement cuts, is that usage from CRA's reports is lacking and it appears the consumer has outstanding credit that they simply don't use. Banks can't make money extending unused credit. Used judiciously, prepaying on most cards can optimize a FICO score but doing it all the time will kill your capacity scores and decrease how much profit a bank can expect to make from the consumer.
Not certain on this one. Experian explicitly reports payments made over a given month, it's easy to figure out from there what our monthly spend is. Because we don't see explicitly what's included in the customer side of the pull (read: the banks, not us) it's a good bet that if EX is showing that to us, then it's nearly guarunteed the lenders will get it too.
I think it's reasonable to expect EQ/TU have similar data collection as well (if it's being reported to EX... it probably is to all 3) just they don't display it to us on our reports.
Unfortunately the sort of "fine grain" reporting Experian allows is only used by some banks. I was watching closely when EX expanded it's reporting capabilities. Citi just left the additional fields blank. WF, OTOH, started reporting amounts paid each month but only the last one so multiple monthly payments didn't get aggregated. At the time the other CRAs did not expand their reporting.
While this bodes well for future analytics, it will take some time before enough data can be accumulated, and enough creditors report their fine grain data, for it to produce reliable scoring algos. Heck, most risk scores used today for credit decisions are years out of date. Banks are extremely conservative and slow to adopt new models because any error in the wrong direction can be devastating.
However, for those that pull EX, it's quite possible this may be visible on a manual review even if they haven't plugged it into their analytics.
As for what banks see, we see more. A CR pulled directly from a CRA must, by law, include all material data that a creditor gets and this is especially true for any data weighing on a credit decision. In addition, we get things like soft Inqs which creditors do not get. However, to get this stuff you have to go directly to the CRA as most third parties extensively filter information to fit easier to understand formats.
I haven't pulled EQ direct in about a year so it's possible they are allowing fine grain reporting like EX. OTOH, as of this spring TU wasn't and Citi remains non-reporting on EX.
It would be nice if MyFICO allowed one to normally pull raw reports without invoking "dsipute" since I have nothing to dispute but this seems to be something no thrid party does.
If credit card companies had it their way, they would impose an APR of 25% + with low CL and high AF's.
Well a bit like First Premier. 
@CS800 wrote:If credit card companies had it their way, they would impose an APR of 25% + with low CL and high AF's.
Well a bit like First Premier.
Yeah. Fortunately they do have to compete. Banks usually pull much more than a FICO score and the 4 reasons it isn't higher. They also have internal info on their own product's usage and accounts history.
Credit card companies want money. Whether it's from swipe fees or interest charged, they don't care. If you use the card a lot and PIF, they are happy. If you run a balance and then pay off your balance with interest, that makes them happy too. Personally, I want to be paid for using their products instead of the other way around. (I'm like this with all my financial products. My credit union just tried to charge me $1/mo as a "maintenance fee" for a check card, so I told them "No, thanks." It's their job to do the pay me for my services to them, especially since credit unions charge higher swipe fees to merchants than commercial banks.)
Starting Score: TU: 566