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0% utilization worse than 40-50% utilization.

Valued Contributor

Re: 0% utilization worse than 40-50% utilization.


OpenG wrote:
I don't think profit is really tied to fico scoring, at least not directly. After all the most profitable customers are the ones carrying large bals with high interest only paying the min. It's up to banks to decide how much they are willing to risk on those types of customers. Fico simply gives the probability of loss based on comparative data.

FYI - Here is one example of how Fico 08 ties into credit card strategy.

 

Solicitation strategy using Fico.jpg

A couple other links that may be of interest (2 step process to see articles)

https://www.experian.com/assets/consumer-information/white-papers/cis-trended-solutions-tl.pdf

https://www.google.com/#q=new+frontiers+in+credit+card+segmentation

Fico 8: .......EQ 850 TU 850 EX 850
Fico 9: .......EQ 850 TU 850 EX 850
Fico 4 .....:. EQ 809 TU 823 EX 830 EX Fico 98: 842
VS 3.0:...... EQ 835 TU 835 EX 835
Fico 8 BC:. EQ 892 TU 900 EX 900
CBIS: ........EQ LN Auto 940 EQ LN Home 870 TU Auto 902 TU Home 950
Message 21 of 23
Valued Contributor

Re: 0% utilization worse than 40-50% utilization.


Thomas_Thumb wrote:

OpenG wrote:
I don't think profit is really tied to fico scoring, at least not directly. After all the most profitable customers are the ones carrying large bals with high interest only paying the min. It's up to banks to decide how much they are willing to risk on those types of customers. Fico simply gives the probability of loss based on comparative data.

FYI - Here is one example of how Fico 08 ties into credit card strategy.

 

Solicitation strategy using Fico.jpg


Having a hard time deciphering this...what is a revenue score?





TU fico08=814 11/10/18
EX fico08=796 10/31/18
EQ fico08=813 10/04/18
EX fico09=803 10/03/18
EQ fico bankcard08=831 10/23/18
Garden since 07/02/18
Message 22 of 23
Highlighted
Valued Contributor

Re: 0% utilization worse than 40-50% utilization.

It is a proprietary lender assigned score based on undisclosed criteria the lender has available. In this example the revenue score would in some way relate to spending patterns and analysis of spend amount over time.

 

The overlay, or secondary score scale, is  commonly used. In such cases the lender assigns profiles a 2nd score (usually based on some internally developed model - but could be 3rd party) and uses it in conjuction with a credit scoring model (Fico/VantageScore) in credit decisioning.

 

See paste below and go to below link for more information.

https://www.fdic.gov/regulations/examinations/credit_card/pdf_version/ch8.pdf

 

revenue scoring.jpg

Fico 8: .......EQ 850 TU 850 EX 850
Fico 9: .......EQ 850 TU 850 EX 850
Fico 4 .....:. EQ 809 TU 823 EX 830 EX Fico 98: 842
VS 3.0:...... EQ 835 TU 835 EX 835
Fico 8 BC:. EQ 892 TU 900 EX 900
CBIS: ........EQ LN Auto 940 EQ LN Home 870 TU Auto 902 TU Home 950
Message 23 of 23