FICO score is unreliable

[Anonymous]

My credit union supplies me with free monthly FICO score. Last motn my score was 809, this month it dropped to 799. The reason in the FICO report are:

The amount owed on your revolving accounts is too high.
You've recently been looking for credit.

Both are incorrect. I have checked my credit reports yesterday and I have not opened any new account. The only "new account" I see is because my last month mortgage company transitioned to a new system which caused a credit inquiry. This was done without my knowledge or consent. The mortgage is still with the same company. As such, this was not a new account opened by me and I sure haven't been looking for credit.

I use only two credit cards. Each card is paid in full every month. I have never paid a cent in credit card interest in last 14 years. The first card has a credit limit of $18,000 and current usage is about $110. The second card has credit limit of $22,000 and current usage is about $5400 out of which $3900 will paid as full statement balance on due date. So how much is "too high"?

I do not have any other active card accounts, no student loans, no car loans, no home equity loans...nothing except mortgage. All my credit reports are clear and do not report any issues as of yesterday.

So the reasons given by FICO are completely wrong and I assert that the method of FICO score generation borders on being unreliable. The FICO report mentions unquantifiable parameters like "too high" or "too many". They owe it to the consumer to clarify these terms with specific information.

Someone from myFICO please respond.

[CreditHealthy]

Sounds like you are doing everything right, these scores are very unreliable! you are right about that! that's why I don't focus too much anymore on the numbers but, what's on my reports instead. Good luck with trying to figure it out.

[Revelate]

Welcome to the forums!

First the easy one: too much owed on your revolving balances - if there's any non-zero number (and you never want all your revolving tradleines to be $0, that is a straight negative) then it may come up on the reasons listed for why your score is not higher as it is technically unarguable.  Fact is the reasons break down severely for gold-plated individuals which your scores make you.

Secondly the inquiry: FICO designed it explicitly to be used when seeking new credit - unfortunately, credit reports have morphed into something it wasn't designed for, namely the barometer for all sorts of things in life, and unfortunately unless you make the pull yourself as the consumer or as a promotional or account review, it's going to be a hard inquiry.  FICO isn't to blame on this one, your mortgage servicer is: I'd be pretty annoyed if they had to do a HP because they "switched systems," that's just sloppy in my estimation.

In any event your scores are so high I wouldn't worry about it, but your experience doesn't mean FICO is innacurate - no lender cares about scores north of 760 anyway, that's just one slice of the underwriting puzzle and at those credit score levels it's everything else which matters.  FICO is just one checkbox.

[Anonymous]

Thanks for responding. The reason I say that the FICO report is unreliable is that over last 6 months, my FICO score has fallen from 815 to 799. The reason assigned for this fall is unquantified like "too many revolving accounts" or "too high balance on revolving accounts". So how can a report based on parameters which cannot be measured or explained to the consumer, be a reliable measure of a consumer's credit? If this is true, then FICO should stop generating this scroe.

[myjourney]

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@Anonymous wrote:

Thanks for responding. The reason I say that the FICO report is unreliable is that over last 6 months, my FICO score has fallen from 815 to 799. The reason assigned for this fall is unquantified like "too many revolving accounts" or "too high balance on revolving accounts". So how can a report based on parameters which cannot be measured or explained to the consumer, be a reliable measure of a consumer's credit? If this is true, then FICO should stop generating this scroe.

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Welcome to the forum 

Just out of curiosity the CU supplying you with the score is it a true Fico score and report and do you know which model?

[Anonymous]

Thanks for the quick reply!!

I magnified the fine print 200%, and this is what it says:

The score presented above is a FICO® Credit Score and was obtained by <My Credit Union Name> from Equifax.

So is this FICO score or is it FICO score as generated by Equifax? I know that Equifax is useless as a credit reporting agency.

[myjourney]

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@Anonymous wrote:

Thanks for the quick reply!!

I magnified the fine print 200%, and this is what it says:

The score presented above is a FICO® Credit Score and was obtained by <My Credit Union Name> from Equifax.

So is this FICO score or is it FICO score as generated by Equifax? I know that Equifax is useless as a credit reporting agency.

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The Equifax Credit Score is a proprietary credit scoring model developed by Equifax.

https://help.equifax.com/app/answers/detail/a_id/242/~/the-equifax-credit-score%E2%84%A2

http://www.myfico.com/crediteducation/creditscores.aspx

[Anonymous]

After reading the second link, it seems that there is no "true" FICO score as there are many ways of calculating the FICO score and there is no telling which score a given lender would use. Is this understanding correct?

[azguy13]

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@Anonymous wrote:

After reading the second link, it seems that there is no "true" FICO score as there are many ways of calculating the FICO score and there is no telling which score a given lender would use. Is this understanding correct?

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Yes you are correct. There are a significantly large number of FICO scoring models depending on what type of credit you are applying for and the preference of the lender. Also. Many banks such as Chase heavily rely on internal scoring models. 

It can be frustrating but the general idea of raising your scores applies to all models (paying on time, UTL, baddies) it is just weighed different per model.

[myjourney]

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@azguy13 wrote:

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@Anonymous wrote:

After reading the second link, it seems that there is no "true" FICO score as there are many ways of calculating the FICO score and there is no telling which score a given lender would use. Is this understanding correct?

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Yes you are correct. There are a significantly large number of FICO scoring models depending on what type of credit you are applying for and the preference of the lender. Also. Many banks such as Chase heavily rely on internal scoring models. 

It can be frustrating but the general idea of raising your scores applies to all models (paying on time, UTL, baddies) it is just weighed different per model.

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With the recent launch of Fico 09 

51 Fico scoring models out there