@jeffeverde wrote:Last December, I applied for (and got) a mortgage. My lender provided me a 3-bureau combined report, with credit scores for each. At that time, the scores were-
EFX - 666 - Beacon 5.0
EXP - 646 - FICO-II
TU - 651 - FICO Classic 04
Since then, the only change to my CR has been another 8 months of on-time payments, and the addition of my mortgage (and 8 months of on-time on it). 2 months after the mortgage, my Experian monitoring reported a 13 point bump on their Fako.
A few days ago, I applied for a Discover card. I was declined, and the reason cited was a TU FICO of 561 ! ! !
Does this make any sense? I pulled my TU report after the decline, and with the exception of the mortgage, it looks the same as it did back in December. So why is Discover's FICO 90 points lower? Even if it's a different version of FICO than the Classic 04 of my December report, does a 90 point difference make sense?
Maybe: while I think Discover may underwrite on a straight FICO 8, it's hard to know for certain which version they're using... and it very much depends how your credit report looks. Also the obvious elephant in the room, did explicitly Discover state it was a FICO score? It will be listed as such, and if it's not, all bets are off.
Without actually seeing the report it's hard for anyone to know with any degree of certainty what's up, but what I would suggest is sharing what's on the report if you feel comfortable, but what I somewhat suspect if it was a FICO score, that either a derogatory updated (collection more recent date as an example) or a tradeline is in dispute somewhere, or your reported balances are sloppy.
Absolutely can be 90 points difference between different models and I'm pretty confident Discover isn't on the TU FICO '04 classic pull, but I'd be absolutely certain of what was on my report if it hasn't been pulled recently, use that Discover decline to get at it if you haven't.
Check the dates absolutely, and pay down the balances appropriately if you can: it's an easy optimization trick but paying a few days before the statement date can produce a non-trivial swing in scores.
How much money do you have to throw at the problem? Just going right down the list:
1) tax lien: see if you live in a state that you can get that withdrawn once paid, think on the order of 1/4 of the states allow it (maybe) and it'd be a non-trivial help. The rest of your derogs, check in the rebuilding forum for some ideas.
2) Hit the balances, this is an instant in time calculation.
3) see #1 re: rebuilding forum
4) Perhaps see about opening up a $500 share secured installment loan with Alliant (which appears to have the best product for this), SDFCU isn't bad either but somewhat suboptimal, but this is minor compared to the others but wouldn't be a bad step as you start rebuilding anyway.
5) time passing will help that, pretty much ignore that score wise.
Big thing is going to be addressing the derogatories, but collections often get passed around and then may report as newer unfortunately, and between that and your balances is probably what dropped your score in the interim, especially as FICO 8 is harsher on recent derogs and current balaances than your '04 mortgage score: between the score range and the fact they're providing a TU '08 score, it likely was a Transunion FICO 8 classic score that they used.
Anyway, start your rebuild as soon as you can, it sounds like you have 2 credit cards (revolving tradelines) and 1 mortgage on your report for a total of 3 positive accounts? I'd see about getting one more credit card, at your strata you're probably looking at a secured one (which isn't a bad idea anyway, if you can obtain a BOFA secured card that'll be everything you want going forward) and another installment account and as far as building the positive side you should be good to go... then it's a matter of fixing the negative accounts, and I'd highly suggest looking into Pay For Delete and other alterantives to try to get them completely off your record: you may be able to get non-trivial gains if you can get them airstruck.
@jeffeverde wrote:Thanks for the feedback, Revelate. It doesn't really explain the sudden drop in my FICO, but it's excellent "road to recovery" information!
On the FICO drop, I think I've found the cause. I just stumbled on a thread (you were active in it), discussing FairIsaac's intent to drop AU accounts from the FICO algorithm this summer. If that just kicked in, that's what caused my 90 point plummet -- my two active CC's are both AU's (I'm responsible for them, but I'm just an AU). Take those away, and my CR consists of half a dozen baddies, and my relatively new mortgage. Ack!
Ah actually does likely explain it.
It's not that AU accounts are getting dropped this summer, it's that FICO 8 has an anti-AU abuse portion to the algorithm, where people based on some criteria will have their AU's excluded from calculation and others won't.
That's a big change when it comes to score if yours aren't being counted as not having any credit cards is a huge negative under FICO 8, and really what you should do sooner rather than later is go pickup a pair of cards on your own, even if that means secured for the moment: the BOFA secured card is an excellent product, Cap 1 or SDFCU or any number of others is fine too. Had the right idea for establishing your own history with the Discover card, just aimed a little too high on the food chain for now.
@Anonymous wrote:The companies purchase new models to either, change the customer credit mix, or charge huge interest rates.
They change models to get better prediction results when it comes to their consumers' risk: a difference of even 1% in their customer's default rate is completely non-trivial for a variety of reasons for lenders, and if FICO '04, or 8, or now 9 provides the most accurate results for their dataset, they'll use that one.
@jeffeverde wrote:I pulled a myFICO 3-Bureau Score today, but it threw an error, saying it couldn't pull my Equifax report. So I also pulled a report directly from Equifax, with FICO (the order form and report explcitly describe it as a FICO® score).
When I went back to look at the myFICO report, myFICO was able to pull all 3 reports. So now I've got Equifax's and myFICO's version of my Equifax-based FICO® score, both generated within minutes of each other, and there's a 77 point difference. Equifax reports it as 657, myFICO as 580. This fits with the 90 point drop in my TU FICO, comparing a FICO-04 from December, and a FICO-(whatever Discover is using today) pulled last week.
EQ04 is directly from equifax site and the one here is eq08. That would be part of the reason you get scores that differ with that large an range. Discover pulls tu08, which is same one barclays and walmart use.
