FICO AMA Discussion Thread

[UncleB]

We would like to thank Tom Quinn, Tommy Lee, Elizabeth Warren, Paul Panichelli, @Elizabeth_FICO, and all the other folks over at FICO who helped make the AMA a success.

For anyone who missed it, the AMA thread can be found here:  https://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/We-re-Tom-Quinn-amp-Tommy-Lee-FICO-Score... 

The AMA is now over and the AMA thread is locked, but feel free to continue the discussion in this thread.

[Anonymous]

@UncleB What happened to the rest of the questions being answered

[K-in-Boston]

Please note that due to time constraints and proprietary information, not all questions could be answered.  We sincerely thank our guests for answering the numerous questions they were able to address.

As a reminder, all posts on these forums must be Friendly, Supportive, and Respectful.

[coreysw12]

I found it interesting that an open mortgage is not a requirement for an 850 score. In fact, it sounds like an open mortgage doesn't help your FICO scores any more than any other installment loan. This despite the fact that not having an open mortgage results in a slew of Reason Codes related to not having an open mortgage. I guess reason codes and fico scores are not necessarily related. So I learned that today!

[Anonymous]

Well we got confirmation that percentages are not rounded using a ceiling function, which means "always round up to next highest percentage." That was advice given on the forums long before I came here in December 2018.

(Link to post)

Note that rounding down to 0% while not triggering the 'no revolving usage' penalty does not disprove what he said. The reason statement for that mentions either 'no recent revolving balances' or 'activity'.

So $50 on $32,000 limit could be 0% like he said, but the balance alone prevents the no usage penalty.

Standard midpoint rounding is used, just like the various CMS front-ends show. (1.5 would be 2, 1.4 would be 1)

That 'less than 8.99%' needs to go as well - also wrong all along. Besides being a pretty severe FCRA violation for misrepresentation of actual utilization percentage, there's no way the midpoint rounding function is going to put that over a whole integer percentage.

We also have confirmation that FICO scoring is using whole dollar balances as reported by the CRAs. (Link to post) So we need to truncate our balances before calculating percentages. (187.84 is 187.00 - cents are never used.)

Note that 2 whole integers can return a fractional amount, but there is no way a senior developer at FICO will make the mistake of using straight floating point variables when it has been widely known for well over a decade that this should never be done with currency calculations. Yet another reason why the 'x.99%' thresholds unnecessarily complicate things.

@SouthJamaica: Score +100 for doubting conventional wisdom!  You were using the right percentages all along (from Experian CMS) and I was completely wrong about that, having followed advice handed down throughout the years on the forum. It looked correct the way I was using the ceiling function, so I gave the (wrong) advice as well. Shame on me for not adhering to my own rule of always questioning and testing everything.

[coreysw12]

So does that mean 9.49% is the new 8.99%?

[Anonymous]

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@coreysw12 wrote:

So does that mean 9.49% is the new 8.99%?

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lol

....but no, that's 9% as well!

We have a pretty nice little slightly-less-than-half-percent buffer before going to 10%, and I'm going to push that limit right to the edge on my Mastercard for my October 3B, by letting it report at $189 of $2000 limit (9.45%). That's as close as I can get to 9.5% because only whole dollar amounts are used.

[Anonymous]

We also have official confirmation that revolving balances are considered independent of revolving utilization.

[Anonymous]

Paul Panichelli, Principal Scientist: Both the number and percent of accounts with balances can be factors in a FICO Score calculation.  In some cases (consumers with less credit history and/or fewer accounts), even one or two accounts with balances may be too many.

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That explains why I am getting the same +19/+14 gains on EQ/TU 8 with 3of4 cards reporting as I did with 1of2 cards reporting. (EX 8 doesn't change.)

I don't think it's because I was at 75% or 50% of cards with a balance - it's probably just a -19/-14 penalty for being at 100% of cards with a balance. I could be wrong about that, but it sure looks that way.

And yes, like he said, even 1 of 2 with a balance was triggering the 'Too many accounts with balances' reason the whole time I had only 2 cards. I definitely had 'less credit history', and still do with under 2 years total revolving credit history and under 3 yrs for the whole file (single installment for 1 year before cards).

[SouthJamaica]

I would like to thank all the FICO staff who participated in providing answers to the questions.

This was quite informative, and  -- I dare say -- settles a few bets.