Why Credit Karma manipulates "payment history."

[ls2016]

The account with the late payments remain open. I do have an account with late payments that is closed and not calculated in the % per CK.

[Anonymous]

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@Anonymous wrote:

CK is the poster child of a "buyer beware" type of site. It can be useful for bits of info, but overall can do a great disservice to the unwary by being little more than a veiled CC pusher. I can't imagine how many people have been fooled by the misleading "Approval Odds", now made even worse with what you posted BBS.

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Just in case folks didn't know, companies such as CK (or any OTHER entity you apply for credit through) make money whether you're approved or NOT.  I used to own call centers a couple decades ago and I always had "lead brokers" and "lead sellers" trying to pitch me on their (just an exaple) 5,000+ hot new leads of recently turned down credit applicants with 600+ FICOs and at least $50k in income contacts for $X.xx apiece...we were a customer service company but still, these lead brokers would bug the crap out of us (because we were ALSO a "lead" - an active call center company, get it!!!?). 

Believe me, YOU are the only one at (FICO) risk when you apply for anything, CK-referred or NOT.  Ever wonder why you get all of those $3k, 250% interest, money in your bank account tomorrow junk mails when you get turned down for a $10k CC or PL app???  NOW YANNOW!

[rbentley]

I have found this thread informative.  I did not know that CK only included the past 2 years in their payment history calculation.  I have two 30 day lates that are 6 years old and they are not included, but there does appear to be a couple of posters who have no lates within the past 2 years but have some that are more than 2 years old and show less than perfect payment history.  Do we know where the "2 year" figure came from?  Do we have any kind of definitive answer as to whether it is correct?  From my own account CK is not considering 6 year old lates, but I don't know for sure if they drop off on that site after 2 years.

[Medic981]

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@Subexistence wrote:

This is another one.

You need to have at least 11 accounts to be in the green. Some people with OCD will need at least 21 to feel better. There's absolutely no reason related to scoring to get at least 11 acounts. I can understand something like 0-3 accounts being in the red but 0-10 doesn't make sense.

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Oh my Goodness, I only have three CCs! I need to apply for eight more to get into the green! Which ones does CK think I can get?

[Anonymous]

Hilariously, CK is now, based on my current credit profile (or so they aver), recommending that I apply for the American Express Premier Rewards Gold Card.  Hmmm. Even if I didn't know that Amex is pretty much certain to turn me down cold until late next year due to my BK, which needs to age to 5 years 1 month before they'll consider apps, the $95 AF would make this a nonstarter for me.

They're also recommending the Savor, even though Cap One's own prequal page is offering me the Quicksilver (at a higher APR than my current one, so no thanks, at least for now, until they bring said APR down).

[Thomas_Thumb]

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@Subexistence

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Do you think that our binary classification of thin vs thick could be obsolete? Like there could be thin 0-4, thick 5-9, thickest 10-20, too thick 20+. Or do you think the reason that the 10-20 range is not related to thin/thick scorecards

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I do not.  Thick verses thin is still a factor for scorecard assignment.  Once "thick" is achieved, though, be it at 3 accounts, 4, whatever, at that point I believe the "too many or too few accounts" reason statement could still remain depending on the number of accounts present. [true]

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Zero accounts up to and including three accounts is thin. Of course, if you have zero active accounts - you don't merit a Fico score and for all practical purposes fail to exist. Four or more accounts is "non thin". Not sure the count at which a file is considered a "thick file".

I have 7 active accounts but routinely get the "too few accounts with recent payment information" even in cases where most if not all accounts were used during a prior month. A few years ago I had up to 12 accounts on file. My recollection is I didnot get the "too few" statement until I dropped to 9 accounts (possible 10). This is a minor impact attribute and was displaced by "recently been looking for credit" when I took an HP for a CLI.

The "Too Many Accounts" is hard to nail down but, some posters with over 20 open accounts have mentioned seeing such a statement. This reason statement is also a minor player and would typically not make the list unless a profile is near optimal. "Too many accounts" is based on open accounts only but does include loans and PLOC.

I get "too many accounts with balances routinely" but, this targets balance reporting not # of accounts per se. Generally three or four cards show balances because charges are allowed to accumulate during a given month and the statement total is then PIF.

[Anonymous]

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@Thomas_Thumb wrote

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Zero accounts up to and including three accounts is thin. Of course, if you have zero active accounts - you don't merit a Fico score and for all practical purposes fail to exist. Four or more accounts is "non thin".

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Hello TT.  Do we know for certain that all FICO scoring models (including the mortgage models, FICO 8 and FICO 9) all use the same 0-3 definition of thin?

I am guessing that you mean that this 0-3 definition is used by all FICO models when assigning people to specialized scorecards for thin profiles.

I had always thought it might be possible that some models used a 0-2 definition, some 0-3, etc.  (I.e. some variability between models.)  I was pretty confident that once you hit three open accounts and five total then that was safe for all FICO models as far the thin not-thin distinction goes, but it would interesting to know if there is reason to be certain all FICO models have the same definition.

[Adidas]

I feel like I've learned a lot from this discussion. If you had to make your own replacements for CK's categories regarding the number of accounts what would you make the break points? 0, 1-3, 5-10, 10+ with diminishing returns starting above 5 accounts? Something else?

[Anonymous]

IMO, the "too many or too few accounts" negative FICO reason statement is fairly unimportant.  Let's say that under 4-10 (not thin) may be considered "too few" and that 20+ may be considered "too many."  Perhaps 11-19 is considered "just right."  That being said, in my estimation the penalty realized from going from "just right" to either "too few" or "too many" accounts is going to be minimal.  While likely a near impossibility to quantify, I'd ballpark this to be 5 points or less.  If it were a significant penalty, we'd have more data point on it.  There are plenty of people with top scores with < 10 accounts or > 20.  I personally think that reason statement equates to very few points penalty wise and that it's definitely not "worth" trying to aim for the "just right" range (whatever that actually is) in hopes of achieving score improvement.