FICO 2 AND FICO 8 USING DIFFERENT BASE DATA FROM THE EXACT SAME EXPERIAN REPORT

[tmacar]

My FICO 2  has historically been A SMALL AMOUNT higher than my FICO 8.  On Mar 17 the bank pulled my FICO 2 based on that day's Experian report.  My FICO 8 that day was 670 something.  The FICO 2 was about 35 points lower.  What the bank saw was that I had a revolving credit utilization of 56%. Also, the FICO 2  was lots lower than the last FICO 2 they'd pulled in September. NOTHING negative had happened in the report.  I went home, pulled the FICO 8 again directly from Experian, again 670 something with a  29% utilization.  I went to a different Experian site where I could pull a FYCO 2, and got the same thing the bank did, a 630 something with a 56% utilization.  All these were based on the March 17 Experian report.   I went through the acccounts, dud the math, and the revolving credit utilization was in fact 29%.

Experian can do nothing, since their reports contain correct data.  but when a FICO 2 is pulled it says "high revolving credit utilization" and when a FICO 8 is pulled it says "low revolving credit utilization"   The utilization has nothing to do with the FICO algorithm, it is basic darta from the credit report.   I checked again today, FICO 8 IS 677 with a "low" utilization, FICO 2 is 635 with a "high" utilization.  It should not be possible for different FICO scores to be based on different basic data from the same Experian report, yet this is what is happening.  And there is sabsolutely no way for a consumer to contact Fair Isaac Corporation except as a user of one of their consuer monitoring products, and the people there can only "explain" how a FICO score generally works, which is not the problem. The problem is that a FICO 2  is looking at different data, from the same day's report, which is not possible.  What can I do?

[Anonymous]

Is it possible to calculate the 56% utilization if you leave out some high limit cards?

I believe some of the older FICO models do not include revolving accounts over a certain credit limit in utilization calculations. I have not searched the forums enough tonight to find a specific amount, but I think I have seen 35k and 50k mentioned previously for some FICO versions.

I could be completely wrong, but this is just the first potential reason for the 56% vs 29% that I could come up with.

[tmacar]

Nope.  In the first place, ALL currently open revolving accounts are used no matter which FICO version it is. Different versions do assign different weights to it in the scoring algorithm, but they all use the same data from the credit report.  Plus I do not have any either high limit or old revolving accounts.  My oldest  currently open  revolving account is about 22 months and my highest limit is only $2000. The FICO 2 is seeing a "high" usage, and the FiCO 8 is seeing a "low" usage (as of today 25%) from the exact same Experian report.  Giving me a FICO 2 of 635 and a FICO 8 of 677.  Not only is the weighting difference between the 2 and the 8 not enough to explain that large a difference in score (42points), not only has my FICO 2 always been a few points higher than my FICO 8, but whenever the FICO 2 is pulled, by either uy bank or myself, it says I have a "high" revolving credit utilization, which is not the case.  Additionally, when I go thhrough the individuaL accounts in the report that comes with the FICO 2 the numbers add up to 25%.  But the algorithm is "seeing" something different.

[Thomas_Thumb]

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@tmacar wrote:

Nope.  In the first place, ALL currently open revolving accounts are used no matter which FICO version it is. Different versions do assign different weights to it in the scoring algorithm, but they all use the same data from the credit report.  Plus I do not have any either high limit or old revolving accounts.  My oldest  currently open  revolving account is about 22 months and my highest limit is only $2000. The FICO 2 is seeing a "high" usage, and the FiCO 8 is seeing a "low" usage (as of today 25%) from the exact same Experian report.  Giving me a FICO 2 of 635 and a FICO 8 of 677.  Not only is the weighting difference between the 2 and the 8 not enough to explain that large a difference in score (42points), not only has my FICO 2 always been a few points higher than my FICO 8, but whenever the FICO 2 is pulled, by either uy bank or myself, it says I have a "high" revolving credit utilization, which is not the case.  Additionally, when I go thhrough the individuaL accounts in the report that comes with the FICO 2 the numbers add up to 25%.  But the algorithm is "seeing" something different.

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Experian Fico score 2 is based on the Fico 98 model. It considers charge card in utilization and considers authorized user (AU) cards in utilization.

1). If you have a no preset spending limit charge card, the utilization for the card is based on the ratio of last reported balance to high balance (B/HB). Those two numbers also contribute to total utilization. NPSL charge cards donot count toward Fico 8 utilization.

 - say you have a balance of $$6500 on an AMEX green card and that is your highest charge on record (HB). Then your B/HB is 100% which will drop your EX Fico 2 score - typically 20 points. Now the $6500 charge will also count toward your aggregate charges in EX Fico score 2. EX Fico score 8 does not count this balance in utilization.

2) Now if you have a couple AU cards, they will be be included in the EX score 2 (EX Fico 98) algorithm. However, they may be ignored in EX Fico 8 - My AU card does not count in the Fico 8 models. Here again, if you have substantial charges on AU cards that could be driving up your utilization on your EX mortgage Fico but not EX Fico 8.

Look at those two possibilities and report back.

[Revelate]

Also as a third, if you have a HELOC balance that might be the case as well.

Where are you seeing this utilization percentage?  That doesn't get reported in reason codes on a pull so by definition it's a 3rd party bit of presentation... and all 3rd party presentation has absolutely nothing to do with the algorithms.  Presentation bugs happen all the time FWIW, some 3rd parties don't even pull from the main dataset at some bureaus anecdotally.

As to what caused the score drop on FICO 2, need to compare before and after reports and see what's up: scores are reference, reason codes are reference, everything else can and will be wrong.

[Thomas_Thumb]

Revelate, good point on the displayed utilization not specifically tying to Fico algorithm. I'm also curious about the sources for the 3rd party % utilizations.

Notwithstanding, the Fico 98 algorithm does look at inputs for revolving utilization differently than does Fico 8.

Some presentations even show a combined debt to credit ratio like in the below Equifax table.

[Revelate]

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@Thomas_Thumb wrote:

Revelate, good point on the displayed utilization not specifically tying to Fico algorithm. I'm also curious about the sources for the 3rd party % utilizations.

Notwithstanding, the Fico 98 algorithm does look at inputs for revolving utilization differently than does Fico 8.

Some presentations even show a combined debt to credit ratio like in the below Equifax table.

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Doesn't surprise me there's big disparity with FICO 2 besides the obvious Amex and likely HELOC differences.  I know we have some old data on TU 98 which should be similar for revolving utilization testing but by the time I found the forums hardly anyone looked at it given it was rarely used by that point in the industry.

I didn't start taking the EX FICO 2 score seriously until I went for a mortgage, and found it surprisingly high.  Think inquiry thresholds for binning might be different too but my file is in an awkward place with a bunch of things happening this year for any sort of testing.

As for %, it's just whatever the developers did... for example, the Experian freebie service counts my HELOC as revolving, but FICO 8 clearly does not based on concrete testing.  Actually most services see the HELOC as CC debt though some treat it as an a mortgage / real estate loan.  I gave up taking anything away from the 3rd party interfaces for actual testing and pretty much 100% of the time I found something which clearly wasn't right anyway with every service.  Other people had come to the same conclusion before me on that one too, that one basically has to ignore everything but the scores and reason codes when it comes to testing.  

Pretty interface on that Equifax service though.

[tmacar]

First, the utilization percentages are coming from Experian, through their Credit Tracker and their Credit Works products

I.finally found the problem which, as I maintained, was nothing to do with the algorithm, but was wrong basic data from the report.  The problem appears to be threefold.  An account listed as Type:  Home Furnishings Store on every report I can see is not being counted as a revolving account, and it should not be.  I signed for a specific amount of debt, agreeing to monthly payments of a specific, and never changing, amount until it was paid off, with no possibility of ever adding anything to the account.  In other words, an installment account.  And the FICO 8, pulled from their Credit Tracker,  is treating it as such, sayng I have a low revolving credit utilization, 25%. (doing the math it's actually 20%, but their summary will update in a day or so).

To get my FICO 2 I have to go to their Credit Works, select FICO 2, and pay $4.99.. I then get a low FICO 2 (637 today), with a note that I have high revolving utilization, although it doesn't specify just what percent.  I went through the accounts in the report which accompanied the FICO 2, and came up with the same 20% the accounts showed when I pulled the FICO 8.  And the account in question still showed as Type: Home Furnishings Store.  BUT....

I went to the bank and asked them to pull my FICO 2 again.  Hard pulls within the same 30 day period by the same creditor are considered duplicartes and do not hurt your score.  They got 637, with high usage, too, but they got a number for it, 40%.  But they got a slightly different actual report than Experian is giving me.  On the report they got, that account is listed as Type:  Revolving.   Running the numbers verified that when the FICO 2 is pulled it is adding the debt from that account to my revolving debt and as it has no credit limit to add to my revolving credit limits, it doubles my revolving utilization from 20% to 40%, the exact percent that the FICO 2  is working with.

The problems:  Experian advertises its consumer products as providing the same information as is provided to creditors.  So how can they give me a report showing it as "Type:  Home Furnishings Store" and give the bank one that shows it as "Type:  Revolving"?

Why does the report I get when I pull a FICO 2 also say Home Furnishings Store instead of Revolving even though the score and "high" usage I see clearly show that the FICO 2 is treating it as a revolving account?  Different FICO editions, and different industry specific versions within editions, assign different scoring values to the same data points, resulting in different scores  But the type of an account should not be changing whether it's a FICO 2, FICO 8, or any other.

Finally, it is not a revolving account.   In June of 2015 unexpected medical issues forced me into Chapter 7 bankruptcy.  Based on my financial situation, I reaffirmed some debts.  The account in question was one of those.  My report shows the then revolving account being closed, discharged in bankruptcy.  Then it shows (at least as far as a FICO 2 is concerned) the new account as a Revolving account, closed, no limit listed.  I went to the store's local office here and was told they're reporting it as revolving because all their accounts are revolving, and closed to account for no credit limit being listed.

Bull.  When I reaffirmed I did not sign a revolving account agreement.  I signed agreeing to pay (amounts made up for simplicity) $1500 at $40 a month, at an interest rate of whatever it was, until the debt was paid off.  There was nothing about any credit limits, nothing allowing anything to be added to the account in the future, ever.  That, by definition, is a still open installment account on which I am still making current on time payments, not a closed revolving account.  They reported it as revolving just because it's simpler for them.  Unfortunately for them, as far as I can see, since they closed the original revolving account and listed it as discharged, then opened the new one with an installment agreement, reporting the new one as a closed revolving account constitutes intentionally reporting false data to a credit reporting agency.  I'm going to their corporate HQ tomorrow, and if they won't change it I'm both filing suit and making sure it gets reported in the local city's major newspaper.

If you deal in oranges and always have a warehouse full of oranges, but once in a while get an apple or two, you can't change those apples to oranges just because ypur normal business is oranges and it simplifies your record keeping.  Those few apples are still apples, no matter that you'd rather call them oranges.  And if accounting for things was governed by a federal Fair Fruit Reporting Act, calling those apples oranges would be a violation of the law.

[Anonymous]

I've been thinking a ton the past week about your issue and the ding on paid-off accounts that are flagged as CFAs. 

This feels like at least a murky violation of the law, and if it's not, something that needs to be addressed. 

It feels like your issue warrants a complaint - it's not revolving, therefore should not be affecting your utilization. Experian does not have the right to determine that an account is revolving when it is not. I hope that this is fixed for you without the need for litigation, but given that it is probably a code problem affecting far more people than just you, sounds like it won't be that easy.

[Revelate]

Pull the report from annualcreditreport.com.

The Experian credit tracker isn't reference, for anything other than the scores and reason codes if they give you it.  Their interpretation of the account in that interface may be flatly wrong, it is in my case with my HELOC.

From Credit Tracker:

DIGITAL FED CREDIT UNI

$8,258

$27,416

30%

Revolving

Current

Jul 1, 2016

From a base Experian report, same account:

Type:  Home Equity

Moral of the story, when trying to figure this out, go to the source, and post the tradeline details here please if you would.