FICO Policies That Need Serious Revision

[Anonymous]

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@909 wrote:

Somewhat true. As an example, my FICO 8 scores are above 830, when I go to AZ instead of AZEO I see a 10 - 20 point drop. This exemplifies the low quality of the algorithm (not seeing that I've been AZEO for many months) but who cares.

Suggesting the big picture to someone applying for a mortgage and went to AZ thinking it is a good thing (who wouldn't except for nerds who hang out here) and lost 20 points dropping them below a treshold is terribly inconsiderate to that person. Going AZ for one month and losing 20 points makes sense only to defenders of a bad algorithm who don't see the harm caused to individuals. Oversight often isn't needed for the big picture, it's needed to protect individuals who fall through the cracks of the big picture.

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@909 as @iced explained, the all zero loss is not a penalty. The algorithm is a point in time algorithm and if it sees all zeros, it is programmed to believe you are not currently using your credit. Therefore it does not award points for active use of credit, as it would otherwise. (Until it gets so high, and then it start taking away points.)

do I think that was a bad call? Sure, I think it's a trap for the unwary and unknowledgeable, as you stated. However they are improving & attempting to fix this with trended data, version 10T.

there is no doubt that it is imperfect. 

[AndySoCal]

@6942  Regarding credit card payment history showing the monthly balances and payment amounts is availible at the credit bureaus.  The bureaus call is credit trending data you can search for it there are many articles on the subject . Here is one of

https://www.experian.com/blogs/insights/2016/06/what-is-trended-data/ 

 You can find articles on the history of it on the internet.

[Anonymous]

Well that actually depends on creditor. Some creditors report the payment amount some do not.

[Anonymous]

Can't it also depend on the CRA as well?  It's been a couple of years since I've looked at my real hard-copy credit reports, but I seem to recall them providing different amounts of information for the same accounts.  I want to say TU was the most detailed, where they showed payment amounts for example when one of the other reports possibly didn't?

I should probably grab my credit reports again since it's been so long and take a look.

[Remedios]

All three major CRAs sell separate product to lenders that contains trended data. 

You do not see it on your EX/EQ report, but same information that's provided to TU (where you do get to see it), it's also provided to EX/EQ if lender decides to supply it. 

You can catch some of it if you look at free annual credit report. 

Also, they really have no issues extrapolating who pays in full, makes partial payments, or pays minimums. Those are selling points for products referenced at the beginning.

[tnhomestead]

FICO is a stay in debt score. I get dinged for owning my house free and clear, oops no mortgage! People here post cc paid on full?  Well that just cost you points.

It works to a point since so few people are willing to delay gratification (myself included) but if people saved and then spent fico wouldn't know what to do!

[iced]

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@Remedios wrote:

All three major CRAs sell separate product to lenders that contains trended data. 

You do not see it on your EX/EQ report, but same information that's provided to TU (where you do get to see it), it's also provided to EX/EQ if lender decides to supply it. 

You can catch some of it if you look at free annual credit report. 

Also, they really have no issues extrapolating who pays in full, makes partial payments, or pays minimums. Those are selling points for products referenced at the beginning.

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Too bad it's not intelligently used by the lenders. Several banks, and Citi in particular, despite having access to such trended data, still seem to think I want a BT despite my trended data showing I've been a PIFer for years.

[Anonymous]

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@iced wrote:

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Too bad it's not intelligently used by the lenders. Several banks, and Citi in particular, despite having access to such trended data, still seem to think I want a BT despite my trended data showing I've been a PIFer for years.

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Excellent point.  I too receive BT offers constantly and have not carried a balance in 5 years.  Outside of being a strict transactor, my reported balances are more often in the hundreds of dollars rather than the thousands of dollars as well, so I'm not sure upon what criteria these lenders (there are tons of them) are targeting me with BT offers.

[Anonymous]

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@Remedios wrote:

All three major CRAs sell separate product to lenders that contains trended data. 

You do not see it on your EX/EQ report, but same information that's provided to TU (where you do get to see it), it's also provided to EX/EQ if lender decides to supply it. 

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If we can't see it even if the information is being provided to the CRA, doesn't that also mean that a potential lender wouldn't be able to see it?

[iced]

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@tnhomestead wrote:

FICO is a stay in debt score. I get dinged for owning my house free and clear, oops no mortgage! People here post cc paid on full?  Well that just cost you points.

It works to a point since so few people are willing to delay gratification (myself included) but if people saved and then spent fico wouldn't know what to do!

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Dinged implies some sort of black mark for these things. What gets repeatedly lost in these discussions is that 850 isn't a goal; it's a boundary on the scoring model. Nobody's credit sucks (from a bank's perspective) because they only have a 760 or 800 instead of an 850, and it's never necessary to have an 850 or even an 800 score. No bank is going to give preferential rates or treatment to someone with a 850 or 800 over someone with a 760.

There's wiggle room built in to the model. People with perfect scores aren't doing everything right, they're pretzel-twisting and contorting their profiles to work the algorithm to get a perfect score. Honestly, I would imagine a bank would be more suspicious of an applicant with a 850 than they would a 760 because the 850 feels contrived. There should be some ebb and flow and fluctuation in scores because it shows they're real and natural.