Are you keeping a "Fico" secret?

[CreditBob]

I am not aware of any secrets but I can tell you through personal experience what I have found that works. So here is an interesting fact. I started off with a 95% utilization rate on my credit card. The following month I paid it of in full to a zero balance & my It could go back two scores went up. On the second month a left a $ 6 balance and when I did the same $ 6 balance the next month my score went up more. Now keep in mind that nothing else changed on my credit report. So the thing that I have realized and that no other member that I can recall has ever brought up, is that the Fico scoring system is factoring is the same consistent low, same balance over an extended period of time. And because the revolving account has been reported to the credit bureaus for sometime, the algorithm goes back and sees over a certain period of time what balances & utilization percentages have been reported by the lender. So I am taking an educated guess at this. It can possibly go back the last 12 or 24 months and then do predictive behavior 12 to 24 months ahead. So I would recommend that everyone try this. If you have multiple revolving accounts, meaning two or more, always have a balance reporting on one account. Other wise it will trigger, TOO MANY ACCOUNTS WITH BALANCES (Experian credit risk code 05)

Here is also a link to the Experian Fico Score risk codes which are those two digit numbers that state why your credit rating is low. So if you want to call this the list of secrets, here you go.

https://www.figfcu.com/documents/fico/FICO®%20Score%20Factors%20Guide%20-%20Experian.pdf

[Flex1]

Thank you Creditbob! I was very confident, that even after all the jokes and skepticism, someone would actually have something useful. This is very common. When Henry Ford shared his automotive dreams with his family, they tried to have him admitted to a psych ward. Fast forward close to a 100 years, Mark Zuckerberg experienced the same thing. People, in general, are skeptical to that which exceeds "their" knowledge or comfort zone. Thanks for sharing. I'm sure there is more out there, but who knows if they will want to share in spite of all the comedy offered up. I appreciate you CreditBob! There is a valid reason why I made this post...

[SouthJamaica]

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@Flex1 wrote:

The Fico scoring modules are quite complex. They are designed to account for many different factors. Many of us join minds to attempt to make sense of it, the best we can. There are many helpful tips posted in order help practically anyone get back on track, from no credit at all to bankruptcy. Having said that, is there anyone here who feels as though they've  stumbled across a significant, trick, hack, secret or loophole that you haven't seen posted and are afraid to share it out of fear someone may change the algorithms and render your secret discovery usleless? I'm not asking you to share your secret. I'm just asking how many out there think they're on to something not typically shared.  

    There are many individuals here, from all different walks of life, who are quite intelligent. Some members check their credit quarterly, some annually, and some check them daily and are able to analyze changes on a microscopic level... This may very well be a thread of crickets (chirp chirp chrip), but I thought I'd try.  I know there's someone out there.

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I have no secrets. Whenever I learn something, or think I learned something, I share it here.

The subsequent feedback and vetting I get, from some pretty smart folks, helps me learn even more "secrets".

[Anonymous]

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@CreditBob wrote:

 So the thing that I have realized and that no other member that I can recall has ever brought up, is that the Fico scoring system is factoring is the same consistent low, same balance over an extended period of time. And because the revolving account has been reported to the credit bureaus for sometime, the algorithm goes back and sees over a certain period of time what balances & utilization percentages have been reported by the lender. So I am taking an educated guess at this.

I think you're on to something.

 The main reason I decided to conduct a year long experiment with my 2 cards at consistently low utilization - 6% to 8.50% inclusive range - is because I found several posts online from people who saw 20 to 40 point gains after about 3 to 5 months of doing something similar. Only a few of them adequately reported that nothing else changed on their reports - the rest just mentioned it in passing that nothing had changed, but perhaps it did, I just couldn't tell. Their AoOA was less than 2 years with AAoA less than a year. So probably a specific scorecard thing, but whatever, I'll take it.

I hear it over and over that 'utilization has no memory', and I am not doubting that finding from the vastly more experienced people on this forum, but perhaps it's different for thin file scorecards? It seems logical to track someone new to credit differently than someone much more experienced (e.g., did they immediately run up the card to 90% and wait to pay until the day before the statement balance reported?).

My experiment is unique in that I am never going above 8.50% utilization in any billing cycle. There won't be any 'pay down' prior to statement balance since it won't be necessary. Just one payment in full on each card within 24 hours of the statement report. I'm going to ignore the 'too many accounts with balances' reason code, as I believe it will just be like a moth hitting the windshield of a fast moving car compared to always on time payments and low utilization.

Vantage Score 4.0 will have a utilization memory:

"The VantageScore 4.0 model takes advantage of trended credit data newly available from all three national CRCs. Trended credit data reflects patterns in borrower behavior, such as shifts in the number of balance decreases over time or increases in the rate of a borrower’s utilization—the portion of the individual’s credit limit represented by their outstanding balances. By capturing the trajectory of borrowing and payment behaviors, trended credit data provides a more precise, holistic view of consumer habits."

I wonder if that will eventually find its way into FICO scoring. Nothing to worry about now and for several years, of course.

[Anonymous]

Good to see that you have learned about Trended Data.  You'll see that the language you quote refers to it as "newly available."  They are calling it that because, for the overwhelming history of the credit bureaus, TD did not exist.  That is, the only data about balance and credit limit was what had been submitted in the last month.  Once a new month's balance or CL rolled in, it wrote over what was previous recorded in the CRA's fields.  In other words, there was no way for any scoring algorithm to look back over previous balances or utilization percentages, because that kind of historical data did not exist on the report.

TD did not begin to exist in any of the bureaus until 2012 (or possibly 2013).  This was well after the FICO 8 model was finalized.  So there is no possible way that FICO 8 looks back over historical balances and utilization percentages in the way some folks in this thread are suggesting.  The mantra "utilization has no memory" is based not only on a reverse engineered guess, but also on the more certain fact that FICO 8 could not have had a utilization memory since the CRAs had no memory at that time.

TD is a big deal and FICO would have made a big deal over their inclusion of it in FICO 9 if that was happening, so we can be confident that it isn't in FICO 9 either.  FICO 10?  Quite possibly, though that will have not practical significance until many lenders and CC issuers begin using it, which will likely not happen until 3-4 years after FICO 10 is released.  So maybe 2024?

[Anonymous]

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@Anonymous wrote:
TD did not begin to exist in any of the bureaus until 2012 (or possibly 2013).  This was well after the FICO 8 model was finalized.  So there is no possible way that FICO 8 looks back over historical balances and utilization percentages in the way some folks in this thread are suggesting.  The mantra "utilization has no memory" is based not only on a reverse engineered guess, but also on the more certain fact that FICO 8 could not have had a utilization memory since the CRAs had no memory at that time.

But if it were just a simple matter of inputs to a FICO 8 algorithm, wouldn't all 3 CRA's all report the same score? People keep posting here about weird variations with the same report.  I thought each one added something special to the calculation?

Take a look at this, from at least 3 years ago (I found a hyperlink to this in an article from June 2016) on Experian's website:

I know it's about providing marketing information, which is the most invasive of all (e.g., Facebook), but I can't see how they wouldn't be using at least some of this data as part of their own scoring calculation.

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"Trend View unlocks the power of trended data to help you progress from mass marketing to one-on-one target marketing by providing insight into the credit card usage patterns of your customers and prospects.

Powered by Experian Trended Data, Trend View attributes identify the following consumer behaviors:

• Rate surfer — transfers balances from one credit card to another
• Revolver — carries a credit card balance from month to month
• Transactor — pays the entire or majority of credit card balance every month
• Consolidator — transfers multiple credit card balances to one credit card or consolidation loan
• Nonactivator — never uses credit card or only uses it once
• Seasonal user — uses cards at specific times of the year

Use this insight to:

• Avoid consumers who are likely to transfer their balances before you reach your breakeven point
• Maximize profitability by targeting consumers who will activate and revolve balances
• Build relationships with transactors by offering your best rewards programs

[Anonymous]

Sure.  There are certainly specialty scoring products that began to be developed after the three CRAs were all collecting TD.  All three CRAs began making their own, Fannie Mae developed a TD add-on for their Desktop Underwriter tool, etc.  But that was after 2012, and FICO 8 was released in 2008/2009.  The algorithm for FICO 8 could not have been designed to use TD before those trended data even existed.

The CRA-specific flavors of FICO 8 were released in 2009 -- again well before the CRAs began to collect TD.

[DIYcredit]

No secrets here,but I've gained a a certain understanding of how Fico scores and credit reporting may work to a certain degree.I like to help others to steer them in the right direction and remain within this GREAT forum guidelines.Their is no shortcuts and very few tricks,but their is always negative reasons why your Fico score isn't higher especially for a  Fico score below 800.The steps that I am sure of that will positively affect anbody's Fico Score are.

1-Pay bills on time

2-No derogatory information on cr.

3-Keep revolving utilization way below 10%

4-AZEO method before any app.

5-Must have one credit card acct showing activity monthly

6-Must have one credit card and one installment loan  to obtain Fico score 850 

7-Create a long history on at least one credit card and keep open.

8-No apps if possible/only apply as needed.

9-One of the fastest ways to improve Fico score is to have derogatory information removed from cr and now your cr is derogatory free.

I hope this information is helpful.I appreciate any insight while I continue to learn.

[Flex1]

Thank you DIYCredit!

[Anonymous]

Interesting thread. TD is definitely the future. I wonder if prior to FICO 10 lenders may supplement their current algorithm with a TD component/algorithm?