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Does FICO care about past util?

Moderator Emeritus

Re: Does FICO care about past util?

Low maintenance= no problems
Altough you are not a high achiever in FIOC sense- everything else looks good-
I work in IT= low maintenance = happy customer
happy customer = referals
referals =more work = more $

pdxuser wrote:
"How can I be low-maintenance?" he asked ironically. I mean, what was the point you were making?

Message 21 of 24
Community Leader
Legendary Contributor

Re: Does FICO care about past util?

I guess I am in the minority on this issue, but here are my views, for what they are worth.

It always takes extreme scenarios to make a point, so I will proffer one.  An installment lendor for a mortgage, auto, secured, or unsecured install loan looks at your 760 FICO score, and green dollar signs immediately fill his eyes.  So he immediately looks for his rubber green ink  “approved stamp,” and then moves on to the next loan applic in his vertical file.  Deal done and approved for lendor A.

But suppose the applic fell on the desk of  lendor B, who  takes a look at the same applic, and then glaces beyond the three digit 760 number that was gospel to lendor A.  He sees that three months ago, you owed $20,000 in revolv credit that is now miraculousy gone in your current scoring, but still shows up to him because he has monthly balance history before him in your CR   Hmmm, he rightfully ponders.  Applicant only has a net income of $40,000.  How then did applicant pay off $20,000 in recent debt that does not show on his credit report in the form of any new CL that even approximates that sum?  He is kinda suspicious that money to pay off that high recent debt that equals 50% of your anuual net may have come from a source of further debt on your part that is not yet, or ever will, reported to the CRAs as debt.  Sure, it could have been paid from the applicant’s savings, but it could also have come from unreported debt (Aint Martha?  or loan shark on the corner? A new account not yet reported to the CRAs?).  So you can bet that lendor B will pick up the phone, and  give you a grueling ringy-dingy!

These lendors don’t make money because they are stupid and lazy.  Sure, if we are talking only about a diminimus app for a minor $300CL Orchard credit card, then the time is not worth the risk.   But with the info available on your full CR that posts past monthly balances, no loan officer with any brains will issue a $20,000-$200,000+ new line of credit without further prodding into your finances.... income?  undisclosed debt?  etc....

What may be dismissed casually by some may mean all to another.

I do not bite on the hook that reporting of historical balances, even though not used in the FICO score, are not of concern to we consumers when it is evident that they are reported in your credit report, and thus potentially of concern in the real world eval of a credit app.

It changes FICO strategy for any consumer who cannot read the minds of the creditor.  I would not simply dismiss lendors as stupid and lazy, and thus just put this puppy to rest, and rely only on the three digit 760.

Message Edited by RobertEG on 02-28-2008 01:36 AM

Message Edited by RobertEG on 02-28-2008 01:37 AM

Message Edited by RobertEG on 02-28-2008 01:38 AM
Message 22 of 24
Community Leader
Legendary Contributor

Re: Does FICO care about past util?

As a followup to your followup to my followup, then if they siimple delete any credit history on accounts closed for 10 years, then how in the world does anyone achieve the high lenght of credit that is reported in the average  "high FICO achievers"  category posted by FairIsaac, which approaches 20 years?  I cannot think of one single line of credit that I held 20+ years ago that I would have any interest in continuing to pursue on the current market.  I just dont buy it.  Have either FairIsaac or any of the CRAs published any info to confirm that is their scoring?
Message 23 of 24
Moderator Emerita

Re: Does FICO care about past util?

Well, if I took out a thirty-year mortgage today and didn't pay it off early, it would hang around on my reports for a total of 40 years (the length of the mortgage plus 10.) That would assure that my credit would be good for my motorized wheelchair, I suppose!

I'll have to root around to find the citation for the ten-years-and-out. You're right, we need to be able to verify things like this.
* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
Message 24 of 24