A Different Way to Think About Your FICO Score

[Middleswarth]

I started thinking about the FICO model in terms of points.  If we break the model down to the 5 areas FICO claims impact our scores, we can get a total number of available points for each.

Payment History - 35%
297.5 points available

Debt/Credit Utilization - 30%
255 points available

Credit History Length - 15%
127.5 points available

Types of Credit - 10%
85 points available

Inquiries - 10%
85 points available

When looking at it this way, it becomes very clear where you need to focus your energy.  Obviously payment history is the big one followed closely by utilization (of course we already knew that).

So now I’m wondering what goes into each category. A few questions to ponder...

Are derogs subtracted from the Payment History pool?  

How long does it take to get all the points for Payment History?  Do you start with 297.5 and lose some if payments are late? Or do you start with fewer points and gain them over a period of time?

At what point do you get all the points for Utilization?  Is it the >9% frequently mentioned here?

How many points do we get for each year of credit history?  How many years do we need to get 100% of these points?

Are there other parameters attached to the types of credit?  Does the age of the various accounts add or subtract from our total?

And finally, it seems pretty straight forward for inquiries.  It would seem that 85 points is the max you can get but at what point do you start losing?  Is there a loss for each one or are there brackets?  

And then there's the buckets question.  I'm guessing different buckets change the weight of events in each pool.  But then, who really knows......

I know these questions can’t be answered without inside knowledge (and I’m not really looking for answers).  I just wanted to offer a slightly different way of looking at the FICO score.  

[bettercreditguy1]

I like to dream and ponder!

[MarineVietVet]

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@Middleswarth wrote:

I started thinking about the FICO model in terms of points.  If we break the model down to the 5 areas FICO claims impact our scores, we can get a total number of available points for each.

Payment History - 35%
297.5 points available

Debt/Credit Utilization - 30%
255 points available

Credit History Length - 15%
127.5 points available

Types of Credit - 10%
85 points available

Inquiries - 10%
85 points available

When looking at it this way, it becomes very clear where you need to focus your energy.  Obviously payment history is the big one followed closely by utilization (of course we already knew that).

So now I’m wondering what goes into each category. A few questions to ponder...

Are derogs subtracted from the Payment History pool?  

How long does it take to get all the points for Payment History?  Do you start with 297.5 and lose some if payments are late? Or do you start with fewer points and gain them over a period of time?

At what point do you get all the points for Utilization?  Is it the >9% frequently mentioned here?

How many points do we get for each year of credit history?  How many years do we need to get 100% of these points?

Are there other parameters attached to the types of credit?  Does the age of the various accounts add or subtract from our total?

And finally, it seems pretty straight forward for inquiries.  It would seem that 85 points is the max you can get but at what point do you start losing?  Is there a loss for each one or are there brackets?  

And then there's the buckets question.  I'm guessing different buckets change the weight of events in each pool.  But then, who really knows......

I know these questions can’t be answered without inside knowledge (and I’m not really looking for answers).  I just wanted to offer a slightly different way of looking at the FICO score.  

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You bring up some interesting questions but the number of points you have in each category is skewed a bit since there aren't 850 points to consider. Since the lowest possible score is 300 there are only 550 points to look at.

[Middleswarth]

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@MarineVietVet wrote:

Payment History - 35%
192.5 points available

Debt/Credit Utilization - 30%
165 points available

Credit History Length - 15%
82.5 points available

Types of Credit - 10%
55 points available

Inquiries - 10%
55 points available

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You bring up some interesting questions but the number of points you have in each category is skewed a bit since there aren't 850 points to consider. Since the lowest possible score is 300 there are only 550 points to look at.

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Okay, fine.  I updated the points based on 550. 

It is still an interested (at least to me) way to think about it.  

[llecs]

Aside from the possible points, you also can't look at it that way due to scoring buckets. There are examples in here (present company included) of gains over 100 points just by paying off CC balances. Yet, there are other examples of very similar CC profiles paying off the same or similar CC util and only seeing gains of half that if best. Based on the scoring bucket, the impact of the amount of debt/util differs from person to person. That 30% scale slides for some over others. And that's just util. Same applies for other facets of FICO scoring like added baddies (someone with a seasoned profile stands to lose more than someone with a thin file, assuming no baddies were present), inquiries, and so on.

IMO, when focusing energy, do so on the basis of the FICO report. It shows in order what hurts your score the most. Tackling #1 will have a much greater impact than going after #4, for example.

Payment history would include any derogs like CAs, COs, lates, PRs, etc.

You really don't get points for added years of the length of history. That's why you'll see posts in here complaining their score didn't move after 6-12 months of on-time payments. I've noticed increases though at major TL birthdays outside of the 1st year, including at least one increase when my AAoA hit another year old. But that's YMMV on your bucket. Some say they've seen an increase at 4 yrs, for example. I hit 4 yrs and never saw an increase. It's always YMMV.

The 10% for inquiries also includes new credit. You'll see more of a loss for new credit (assuming your mix has been satisfied) than you would for inquiries.

[marty56]

Related is that we have most control of our payment history followed by util and then finally time.

[jamesdwi]

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@llecs wrote:

Aside from the possible points, you also can't look at it that way due to scoring buckets. There are examples in here (present company included) of gains over 100 points just by paying off CC balances. Yet, there are other examples of very similar CC profiles paying off the same or similar CC util and only seeing gains of half that if best. Based on the scoring bucket, the impact of the amount of debt/util differs from person to person. That 30% scale slides for some over others. And that's just util. Same applies for other facets of FICO scoring like added baddies (someone with a seasoned profile stands to lose more than someone with a thin file, assuming no baddies were present), inquiries, and so on.

IMO, when focusing energy, do so on the basis of the FICO report. It shows in order what hurts your score the most. Tackling #1 will have a much greater impact than going after #4, for example.

Payment history would include any derogs like CAs, COs, lates, PRs, etc.

You really don't get points for added years of the length of history. That's why you'll see posts in here complaining their score didn't move after 6-12 months of on-time payments. I've noticed increases though at major TL birthdays outside of the 1st year, including at least one increase when my AAoA hit another year old. But that's YMMV on your bucket. Some say they've seen an increase at 4 yrs, for example. I hit 4 yrs and never saw an increase. It's always YMMV.

The 10% for inquiries also includes new credit. You'll see more of a loss for new credit (assuming your mix has been satisfied) than you would for inquiries.

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15 new credit cards with everything else perfect ( a 785 by the OP's math)  and no one prime will want to give you credit even with your 785. 

[Anonymous]

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@llecs wrote:

Aside from the possible points, you also can't look at it that way due to scoring buckets. There are examples in here (present company included) of gains over 100 points just by paying off CC balances. Yet, there are other examples of very similar CC profiles paying off the same or similar CC util and only seeing gains of half that if best. Based on the scoring bucket, the impact of the amount of debt/util differs from person to person. That 30% scale slides for some over others. And that's just util. Same applies for other facets of FICO scoring like added baddies (someone with a seasoned profile stands to lose more than someone with a thin file, assuming no baddies were present), inquiries, and so on.

IMO, when focusing energy, do so on the basis of the FICO report. It shows in order what hurts your score the most. Tackling #1 will have a much greater impact than going after #4, for example.

Payment history would include any derogs like CAs, COs, lates, PRs, etc.

You really don't get points for added years of the length of history. That's why you'll see posts in here complaining their score didn't move after 6-12 months of on-time payments. I've noticed increases though at major TL birthdays outside of the 1st year, including at least one increase when my AAoA hit another year old. But that's YMMV on your bucket. Some say they've seen an increase at 4 yrs, for example. I hit 4 yrs and never saw an increase. It's always YMMV.

The 10% for inquiries also includes new credit. You'll see more of a loss for new credit (assuming your mix has been satisfied) than you would for inquiries.

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I think I read an interview or post by Fico staff that more or less said those percentages can shift due to history (read: bucketing).