Interesting article on the CNN site today. Thoughts?
http://money.cnn.com/2014/08/07/pf/fico-score/index.html?hpt=hp_t2
Is this a change that will impact the scores we see here? I would look into it more deeply, but I'm heading out the door to work right now.
Excerpts:
FICO, the nation's top credit score provider, is introducing a new scoring model this fall where medical debt in collections will have less of an impact on a consumer's credit score than it currently does.
Another change to the way it calculates scores: FICO will begin ignoring debt in collections that has been completely paid off or settled. Currently, debts that go into collections, even if they are paid off, are factored into all credit scores for up to seven years.
This is a move VantageScore, the scoring model created by credit bureaus Experian(EXPGF), Equifax (EFX) and TransUnion -- announced last year.
Most interested in paid collections not hurting as much . Won't help with manual reviews but should help alot of people.
@pizzadude wrote:
@gamegrrl wrote:Is this a change that will impact the scores we see here?
I haven't heard of any plans for MyFICO to migrate to FICO9, especially since the conversion to FICO08 was just recently implemented.
So the changes in the article are FICO 9?
Also, paid collections are now going to be completely ignored??? That seems substantial to me. I mean, it's not like lenders are going to adopt FICO 9 immediately, and it's not like lenders internal risk models are going to ignore collections, but purely from a scoring perspective, that seems big to me.
@-NewGuy- wrote:
@pizzadude wrote:
@gamegrrl wrote:Is this a change that will impact the scores we see here?
I haven't heard of any plans for MyFICO to migrate to FICO9, especially since the conversion to FICO08 was just recently implemented.
So the changes in the article are FICO 9?
Also, paid collections are now going to be completely ignored??? That seems substantial to me. I mean, it's not like lenders are going to adopt FICO 9 immediately, and it's not like lenders internal risk models are going to ignore collections, but purely from a scoring perspective, that seems big to me.
The changes are nice to see and all, but i don't think anybody is going to use this new scoring system anytime soon maybe close to end of the decade they may adopt it.
@pizzadude wrote:
@-NewGuy- wrote:So the changes in the article are FICO 9?
Yes, that was my interpretation based on this statement:
"FICO, the nation's top credit score provider, is introducing a new scoring model this fall where medical debt in collections will have less of an impact on a consumer's credit score than it currently does"
Sounds about right. Interesting changes, for sure. I know Vantage made some of these a while ago as well.
@-NewGuy- wrote:
@pizzadude wrote:
@-NewGuy- wrote:So the changes in the article are FICO 9?
Yes, that was my interpretation based on this statement:
"FICO, the nation's top credit score provider, is introducing a new scoring model this fall where medical debt in collections will have less of an impact on a consumer's credit score than it currently does"
Sounds about right. Interesting changes, for sure. I know Vantage made some of these a while ago as well.
FWIW I think it's going to be a faster adoption than FICO 8 was. From the reports on these forums it certainly seems like lenders have been doing these things for a while, and if they can improve by pushubg that further into the infrastructure (also by potentially removing other checks from their automated underwriting i.e. is the collection paid or not check) and reduce their underwriting costs as a result, the big lenders will be all over it.
I can't run back and look since Alliant's site is slightly busted (important banking stuff working yes, view score, not so much), but I glanced at it recently and it looked as though they were showing both VS 2.0 and 3.0, and there was a big difference between the two.
Also didn't see whether paid tax liens were now ignored yet, am hoping for that. If the IRS is airstriking them, and I do know from personal experience than a paid lien is different than an unpaid one from an underwriting perspective, it may fall under the paid debt category as well which I fervently hope.
Still stuck on the older versions for mortgage but c'est la guerre.
@EW800 wrote:> I know Vantage made some of these a while ago as well.
I wonder if that is why my vantage 3.0 score is so high (752). I have a paid settlement on a CC account. If Vantage 3.0 scores are not spanking us so heavily for paid accounts such as this, it may explain why this score (Vantage) is so high. I'd kill to have a FICO score in that range, however I am pretty sure there is no chance of that happening as long as I have the paid settlement and foreclosure on my reports.
i thought vantage score had different score range , that is why the scores were an bit higher?