What is the formula/algorithm used to compute FICO scores?
Now obviously joking, but it is a proprietary formula. And very complex as it uses everyone's financial picture to calculate your score (e.g. buckets).
There are approximately 36 different flavors of the FICO scoring algorithm. There is no single algorithm.
FairIsaac explains it in their webinars and credit education posts as follows.
The basic FairIsaac scoring methodology is to break consumers down into approximately 12 different categories ("buckets"), and they develop separate algorithms for each. Major categories include those with short credit histories, those with only a minor delinquency (30-days), those with major delinqenquencies, public records, or bankruptcies, those with CO or CA accounts, with further breakdowns based on lenght of credit history and %util of exisiting accounts. Even the bucket categorie themselves are trade secrets, let alone how each is scored differently within each bucket.
Then this methodolgy is multiplied by three, in that FairIsaac also develops totally different tweakings of their scoring methodology for each of the CRAs who purchase their software.
It is mind boggling in complexity, and FairIsaac makes money from them, so they dont disclsoe them in any detail. That is why the score simulators provided by myFico stink to badly. If they were more detailed, it would allow reverse engineering of their methodology and algorithms, and that just aint gonna happen.
I hope this confuses you! It does me.