FICO 9 must be different in other respects

[SouthJamaica]

My EQ FICO 9 is 23 points higher than my EQ FICO 8, but none of the published differences are applicable to me:

• • Unpaid medical debt is now treated differently than other types of unpaid debt. Unpaid medical debt has less of a negative impact on a FICO Score 9
  • Third party collections that have been paid off no longer have a negative impact
  • Rental history, when it’s reported, factors into the score—this may be especially beneficial for people with a limited credit history

So there must be other differences as well between the 2 scoring models.

[Thomas_Thumb]

Poster data in the General Credit Topics category suggests less impact with Fico 09 relative to Fico 08 associated with recent hard inquiries and new credit. For me it appears that # open revolving accounts may get more weight in Fico 09. If so, you may see more of a bump with only one or 2 accounts reporting balances relative to Fico 08.

Provided below are some links for publications/articles speaking to Fico 09.

http://www.fico.com/en/node/8140?file=7786

http://www.car.org/media/pdf/Back_to_Basics_FICO_Myths_Debunked.pdf

http://www.fico.com/en/newsroom/fico-score-9-introduces-refined-analysis-of-medical-collections

http://www.foxbusiness.com/features/2014/08/08/fico-new-credit-score-formula-helps-many-hurts-some.h...

http://www.huffingtonpost.com/adrian-nazari/how-ficos-new-credit-score-will-impact-consumers_b_58445...

Here are a few more - not sure about the accuracy of these ones due to the source.

https://www.autocreditexpress.com/blog/limited-credit-and-fico-score-09/

https://www.autocreditexpress.com/blog/fico-score-9-and-medical-collections/

https://www.autocreditexpress.com/blog/collection-accounts-and-fico-score-09/

https://www.autocreditexpress.com/blog/fico-score-9-to-narrow-credit-score-differences/

https://www.autocreditexpress.com/blog/new-fico-score-could-help-poor-credit-borrowers/

[SouthJamaica]

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@Thomas_Thumb wrote:

Poster data in the General Credit Topics category suggests less impact with Fico 09 relative to Fico 08 associated with recent hard inquiries and new credit. For me it appears that # open revolving accounts may get more weight in Fico 09. If so, you may see more of a bump with only one or 2 accounts reporting balances relative to Fico 08.

Provided below are some links for publications/articles speaking to Fico 09.

http://www.fico.com/en/node/8140?file=7786

http://www.car.org/media/pdf/Back_to_Basics_FICO_Myths_Debunked.pdf

http://www.fico.com/en/newsroom/fico-score-9-introduces-refined-analysis-of-medical-collections

http://www.foxbusiness.com/features/2014/08/08/fico-new-credit-score-formula-helps-many-hurts-some.h...

http://www.huffingtonpost.com/adrian-nazari/how-ficos-new-credit-score-will-impact-consumers_b_58445...

Here are a couple more - not sure about the accuracy of these ones due to the source.

https://www.autocreditexpress.com/blog/limited-credit-and-fico-score-09/

https://www.autocreditexpress.com/blog/collection-accounts-and-fico-score-09/

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Thanks for that Thomas. That first point would make sense in my case because I have a goodly number of inquiries and new accounts in 2015.

Question. When FICO refers to a separate scorecard for folks with a high amount of revolving debt, are they referencing the revolver/transactor distinction? I.e. are they addressing the carrying of balances, as opposed to the reporting of balances which are PIF?

[Thomas_Thumb]

SJ,

The revolver/transactor distinction seems to be a dead issue for the time being as CC issuers are not reporting sufficient information to distinguish that behavior. In fact a few major banks that were reporting the data (monthly payment amounts) stopped around July 2015.

The added score card appears focused toward those that show a recurring high utilization month over month. Unfortunately, if someone charges up a high balance every month, lets it report and then PIF the balance(s), the person could theoretically get tagged and placed in this new scorecard. That flaw would have been avoided by segmentation of transactors/revolvers.

[SouthJamaica]

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@Thomas_Thumb wrote:

SJ,

The revolver/transactor distinction seems to be a dead issue for the time being as CC issuers are not reporting sufficient information to distinguish that behavior. In fact a few major banks that were reporting the data (monthly payment amounts) stopped around July 2015.

The added score card appears focused toward those that show a recurring high utilization month over month. Unfortunately, if someone charges up a high balance every month, lets it report and then PIF the balance(s), the person could theoretically get tagged and placed in this new scorecard. That flaw would have been avoided by segmentation of transactors/revolvers.

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Thanks Thomas, much appreciated.

[Anonymous]

cant wait for myfico scores to update see what my 09's are

[SouthJamaica]

Just updated my reports and my FICO 9 scores are way, way higher across the board than FICO 8.... like 30-40 points higher across all 3 bureaus and in all FICO 9 models.

Since I had no paid collections, no medical collections, and no rental history, I assume it's because FICO 9 isn't punishing me as much as FICO 8 does for inquiries and age of accounts.

So I guess those of us who enjoy applying for the occasional new credit card now and then have something to look forward to when and if FICO 9 becomes the new standard.

[Thomas_Thumb]

I started trending the difference between my Fico 8 and Fico 9 scores to see if anything sticks out. My profile is clean so I don't see any positive impact with Fico 9 relating to paid collections. I have no inquiries or lates so those don't factor into score differences. My youngest account is over 4 years old.

Best I can tell is Bankcard enhanced Fico 9 puts significantly more weight on depth of file - meaning # of accounts than does Fico 8. My file is rather thin (9 accounts total with 7 open. One open account is a mortgage - 11 years into a 15 year loan). Auto enhanced and Classic Fico 9 don't appear to put added weight on # open accounts relative to their Fico 8 counterparts.

In August 2016 I had 0% utilization with no revolving accounts reporting a balance. An AU card did report a balance but, I have confirmed it is not counting toward my Fico 8 score. The zero revolving accounts reporting caused a significant drop in Fico 8 scores. Minimal, if any drop on Fico 9 suggests Fico 9 is either counting the AU card or it weighs 0 % utilization/zero cards reporting very little. This is illustrated by dip in the (F8 - F9) score difference.

[SouthJamaica]

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@Thomas_Thumb wrote:

I started trending the difference between my Fico 8 and Fico 9 scores to see if anything sticks out. My profile is clean so I don't see any positive impact with Fico 9 relating to paid collections. I have no inquiries or lates so those don't factor into score differences. My youngest account is over 4 years old.

Best I can tell is Bankcard enhanced Fico 9 puts significantly more weight on depth of file - meaning # of accounts than does Fico 8. My file is rather thin (9 accounts total with 7 open. One open account is a mortgage - 11 years into a 15 year loan). Auto enhanced and Classic Fico 9 don't appear to put added weight on # open accounts relative to their Fico 8 counterparts.

In August 2016 I had 0% utilization with no revolving accounts reporting a balance. An AU card did report a balance but, I have confirmed it is not counting toward my Fico 8 score. The zero revolving accounts reporting caused a significant drop in Fico 8 scores. Minimal, if any drop on Fico 9 suggests Fico 9 is either counting the AU card or it weighs 0 % utilization/zero cards reporting very little. This is illustrated by dip in the (F8 - F9) score difference.

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1. What I can't get over about your graphs is that most of the action takes place over zero, whereas mine would take place entirely under zero. My FICO 9 scores are always significantly higher than my FICO 8 scores. Your August 2016 disturbance would be the norm for me for all 3 scores in all 3 scoring model families.

2, The other thing I can't get my head around is the flat lining, signifying a total absence of difference between FiC0 8 and FICO 9, represented by the blue line.... i.e. your Auto & Bankcard scores bouncing around, while your classic scores hardly budge.

3. Since you attribute the differences, whatever they are, to number of accounts reporting balances, my questions are: (a) is there a way to simply create a more or less balanced optimization plan for all 6 scores and (b) if so what is it?

[Thomas_Thumb]

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@SouthJamaica wrote:

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@Thomas_Thumb wrote:

I started trending the difference between my Fico 8 and Fico 9 scores to see if anything sticks out. My profile is clean so I don't see any positive impact with Fico 9 relating to paid collections. I have no inquiries or lates so those don't factor into score differences. My youngest account is over 4 years old.

Best I can tell is Bankcard enhanced Fico 9 puts significantly more weight on depth of file - meaning # of accounts than does Fico 8. My file is rather thin (9 accounts total with 7 open. One open account is a mortgage - 11 years into a 15 year loan). Auto enhanced and Classic Fico 9 don't appear to put added weight on # open accounts relative to their Fico 8 counterparts.

In August 2016 I had 0% utilization with no revolving accounts reporting a balance. An AU card did report a balance but, I have confirmed it is not counting toward my Fico 8 score. The zero revolving accounts reporting caused a significant drop in Fico 8 scores. Minimal, if any drop on Fico 9 suggests Fico 9 is either counting the AU card or it weighs 0 % utilization/zero cards reporting very little. This is illustrated by dip in the (F8 - F9) score difference.

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1. What I can't get over about your graphs is that most of the action takes place over zero, whereas mine would take place entirely under zero. My FICO 9 scores are always significantly higher than my FICO 8 scores. Your August 2016 disturbance would be the norm for me for all 3 scores in all 3 scoring model families.

2, The other thing I can't get my head around is the flat lining, signifying a total absence of difference between FiC0 8 and FICO 9, represented by the blue line.... i.e. your Auto & Bankcard scores bouncing around, while your classic scores hardly budge.

3. Since you attribute the differences, whatever they are, to number of accounts reporting balances, my questions are: (a) is there a way to simply create a more or less balanced optimization plan for all 6 scores and (b) if so what is it?

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Hello SJ:

To try and answer your questions.

1) I believe Fico 9 wants to see more open and closed accounts in ones file than I have. I rate only very good for credit mix due to too few accounts in total - it's not the # of accounts showing activity. The lack of accounts is not hurting my Fico 8 bankcard score - still can reach 900 on TU and EX. However, on Fico 9 max I can get is 885. So, the limitation in Fico 9 is lack of critical mass. I see the same thing with VantageScore 3.0.

2) Reason my Classic scores show zero difference is the buffer I have at 850 - IMO. I did have TU Classic Fico 8 drop to 845 once while Classic Fico 9 stayed at 850. Thus, the -5 points.

3) When I reduce # cards reporting balances to 2 or 3 from 4, 5 or 6 all my all my Fico enhanced scores (8 and 9) go up a bit. It's just that the Fico 9 scores bump up against some kind of ceiling - which I attribute to unattainable mix points for my file due to too few accounts.

You have over 20 accounts as I recall and that may be optimizing your Fico 9 "mix points" - by comparison I have dropped from 11 - 12 to 9 total which hurts my mix.