Fico 9 makes get bad for anybody trying to improve credit scores with bad credit

[Anonymous]

So I’ll say this, I was pretty excited about fico 9. I thought from what I read, it was a good model. One thing makes no sense and that is to most of the people who paid collections because it’s the right thing to do will be punished by fico 9 as it will not recognize that you paid them off. That’s right, my scores are 609,624,623 through fico 8. Fico nine however pushed me into the middle to upper 500’s.

Personally I think this new model further separates the classes from each other in society. We need one credit scoring model and that’s it. All of this coming from the housing crisis when every app was approved without a human even looking at them. I’m frustrated. My score was into the upper 300’s when I started paying off debt. Everything I work hard to overcome will be ripped to shreds.

[Anonymous]

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@Anonymous wrote:
So I’ll say this, I was pretty excited about fico 9. I thought from what I read, it was a good model. One thing makes no sense and that is to most of the people who paid collections because it’s the right thing to do will be punished by fico 9 as it will not recognize that you paid them off. That’s right, my scores are 609,624,623 through fico 8. Fico nine however pushed me into the middle to upper 500’s.

Personally I think this new model further separates the classes from each other in society. We need one credit scoring model and that’s it. All of this coming from the housing crisis when every app was approved without a human even looking at them. I’m frustrated. My score was into the upper 300’s when I started paying off debt. Everything I work hard to overcome will be ripped to shreds.

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That's really weird, buddy!  And indeed contrary to almost everything that's been published about the differences between FICO 8 and FICO 9.

One of the chief differences is that, in FICO 8, paid collections still count against you, but in FICO 9 they are completely ignored.

Can you tell us whether any of your collections were for less than $99?  If so, FICO 8 ignored them (weird quirk of FICO 8) -- but once they were paid then FICO 9 would have ignored them too.

Have you pulled your reports lately?  If so...

    * When did you pull them?

    * Did all the collections show as paid?

    * When did you pay them off?

    * When did you last see your FICO 9 scores?

I wouldn't worry too much about FICO 9.  Very few lenders or CC issuers are using it.  Head over to the rebuilding forum and continue to work on cleaning up your reports during the next few years.  When your reports are clean and well optimized, you'll have a good score with any model. 

[Anonymous]

My FICO Score 9's are all higher across the board.  I wish more lenders used it!

I would hate for there to be "one score to fit everyone" which to me is a ridiculous idea.  Having different score types is great because we can look them up and seek credit from lenders who use our best score.

If everyone used one score algorithm, you'd have LESS choice and opportunity.

[Anonymous]

OP, where does your current overall utilization sit?  Based on your scores, I would venture to guess that it's not ideal (1%-8.9%).  If utilization is an area of opportunity for you, your first goal should be to take that down to the optimal range and doing so will immediately improve your scores.

[Anonymous]

More than one score makes no sense. How does that benefit you when all your creditors don’t report the same? This credit place has a different set of scoring than this place? When no matter what creditors pick the middle score on some the lower score on others? One national score makes it simple. There’s no need for 3 credit agencies. Excuse me, there’s no need for about 30 credit agencies. Yeah about thirty dark agencies. The big 3 are making a killing from us. We’re concerned with a 3 digit number and they want to sell product to coincide with our scores. I’ll be ok with one score. Maybe two. As far as you saying Having different score types is great because we can look them up and seek credit from lenders who use our best score. it would be better for us if they only had one score to look at to begin with. They just don’t go after the highest score, they decline you all together because of your lowest score.

[Anonymous]

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@Anonymous wrote:
More than one score makes no sense. How does that benefit you when all your creditors don’t report the same? This credit place has a different set of scoring than this place? When no matter what creditors pick the middle score on some the lower score on others? One national score makes it simple. There’s no need for 3 credit agencies. Excuse me, there’s no need for about 30 credit agencies. Yeah about thirty dark agencies. The big 3 are making a killing from us. We’re concerned with a 3 digit number and they want to sell product to coincide with our scores. I’ll be ok with one score. Maybe two. As far as you saying Having different score types is great because we can look them up and seek credit from lenders who use our best score. it would be better for us if they only had one score to look at to begin with. They just don’t go after the highest score, they decline you all together because of your lowest score.

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Maybe we should stop having many different stores selling products for different prices?  How about we close down Amazon and Walmart and Target and force everyone to just shop at Kmart?  Would that be better?

There's a need for thousands of credit score algorithms from thousands of companies...  because every market niche is different and every lender has their reasons for picking one particular algorithm over others.

I app for lenders who I believe will pick a particular score algorithm, and usually I'm pretty accurate.  Sometimes I'll be wrong, but if you perform due diligence, it's no big deal.

If your scores suck, don't blame the algorithm, blame yourself.  I blame myself for being denied, I never blame the lender.

[Anonymous]

That’s what I mean by separating the classes. You’re a perfect example. If my scores suck blame me? Of course I blame myself. You’re still missing my point. You app with certain lenders who use certain algorithms? I know what that means, but come off your high horse. 99 % of the public have no idea what you’re talking about.

Why in the hell are the goal post moving all the time. Keep it one way. I work in a dealer. I know that when we pull your FICO Score, there’s no guarantee they’ll use that score. Why? Cause that lender has their own scoring model. That 650 you pull here at myfico, is a 620 here. Your argument which is somewhat ignorant about needing thousands of algorithms is unbelievable. You need a simple model like 8. That’s it. As far as the many stores with different prices quote, that’s a totally different model which spurs competition amongst competitors. I get it. Lol. I don’t want credit bureaus competing on how to make getting credit harder. I know where I come from and I know where I’m headed with this.

[Anonymous]

I don't like Fico 9 either, all of my scores are lower on Fico 9. My EX score is 686 on Fico 8 and 647 on Fico 9. So I've lost about 40 points with no change in my credit report, it moves me from the good category to the fair category.

[Anonymous]

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@Anonymous wrote:
That’s what I mean by separating the classes. You’re a perfect example. If my scores suck blame me? Of course I blame myself. You’re still missing my point. You app with certain lenders who use certain algorithms? I know what that means, but come off your high horse. 99 % of the public have no idea what you’re talking about.

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Markets don't separate classes: behaviors and actions and even cultural biases do.  Can't change market risks by fiat or law, doesn't work that way.  99% of the public has no idea because 99.99% of the consumer public can't game the system even if they did -- credit scores are biased against past results and not future results.  The reason FICO Score 9 came out was because people tried gaming FICO Score 8.  So FICO, who provides a service to lenders and you should be thankful for them, had to fix the gaming of the old score by releasing a new score algorithm.  Some lenders who were obviously hurt by FICO Score 8's inability to predict some deliquencies (due to people gaming the old score) decided to upgrade to a newer better model.  And guess what?  That newer better model shows that some of us are actually higher risk than we were rated before -- and this is a good thing.  This means that folks who paid their bills on time are a lower risk even if they have a small medical collection.  Good news for those who follow contracts and abide by them.  Note, I am not one of those people.

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@Anonymous wrote:
Why in the hell are the goal post moving all the time. Keep it one way. I work in a dealer. I know that when we pull your FICO Score, there’s no guarantee they’ll use that score. Why? Cause that lender has their own scoring model. That 650 you pull here at myfico, is a 620 here. Your argument which is somewhat ignorant about needing thousands of algorithms is unbelievable. You need a simple model like 8. That’s it. As far as the many stores with different prices quote, that’s a totally different model which spurs competition amongst competitors. I get it. Lol. I don’t want credit bureaus competing on how to make getting credit harder. I know where I come from and I know where I’m headed with this.

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FICO Score 8 failed because people learned to game it.  Same is true with FICO Score 5, or 2, or FICO Auto Score 4 or any of the older scoring algorithms -- people figured out how to game it so that lenders had higher risks than FICO said they would.

Here's the thing: if you pay your bills on time, none of this matters.  Just by paying your bills on time and not abusing credit limits and not seeking credit every week, by the age of 25 you'll have a great credit score, regardless of algorithm.  It's a simple answer.  Live by a budget, save money for a rainy day emergency, and pay every bill.

FICO isn't for you and me.  We are not the customers.  We are the product.  If you don't like it, don't use credit.

A lender who validates risk better is a lender who is even more fair to people who pay their bills on time.

Great friend of mine for 20 years is in her 40s.  She's never made more than $30,000 in a year in her entire life.  Ever.  Not once.  Most years she earns around $24,000 and she lives in a big expensive city.  Her FICO scores are all over 800 regardless of algorithm.  She has 10,000 of thousands of dollars in emergency savings, and she did it by living within her means, paying her bills on time and not abusing easy credit.  I'm envious of her ability to be a good steward of her financial situation.  I made 16 or 30x more than she did on average and I don't have what she has, because I was a poor steward of my (way better) financial situation.

There's no excuse for someone my age to have a poor score, yet I did.  I had no excuse, I was a poor steward of my finances for 25 years.  I admit it.

[Anonymous]

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@Anonymous wrote:

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@Anonymous wrote:
That’s what I mean by separating the classes. You’re a perfect example. If my scores suck blame me? Of course I blame myself. You’re still missing my point. You app with certain lenders who use certain algorithms? I know what that means, but come off your high horse. 99 % of the public have no idea what you’re talking about.

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Markets don't separate classes: behaviors and actions and even cultural biases do.  Can't change market risks by fiat or law, doesn't work that way.  99% of the public has no idea because 99.99% of the consumer public can't game the system even if they did -- credit scores are biased against past results and not future results.  The reason FICO Score 9 came out was because people tried gaming FICO Score 8.  So FICO, who provides a service to lenders and you should be thankful for them, had to fix the gaming of the old score by releasing a new score algorithm.  Some lenders who were obviously hurt by FICO Score 8's inability to predict some deliquencies (due to people gaming the old score) decided to upgrade to a newer better model.  And guess what?  That newer better model shows that some of us are actually higher risk than we were rated before -- and this is a good thing.  This means that folks who paid their bills on time are a lower risk even if they have a small medical collection.  Good news for those who follow contracts and abide by them.  Note, I am not one of those people.

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@Anonymous wrote:
Why in the hell are the goal post moving all the time. Keep it one way. I work in a dealer. I know that when we pull your FICO Score, there’s no guarantee they’ll use that score. Why? Cause that lender has their own scoring model. That 650 you pull here at myfico, is a 620 here. Your argument which is somewhat ignorant about needing thousands of algorithms is unbelievable. You need a simple model like 8. That’s it. As far as the many stores with different prices quote, that’s a totally different model which spurs competition amongst competitors. I get it. Lol. I don’t want credit bureaus competing on how to make getting credit harder. I know where I come from and I know where I’m headed with this.

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FICO Score 8 failed because people learned to game it.  Same is true with FICO Score 5, or 2, or FICO Auto Score 4 or any of the older scoring algorithms -- people figured out how to game it so that lenders had higher risks than FICO said they would.

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I don't understand this because my Fico 8 is higher than most of the older models, but lower than Fico 9.