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First post! Moving between brackets in catagory.

New Member

First post! Moving between brackets in catagory.

Hey guys. I've been reading here for a while and improving my score. I recently did the Amex 61 day 3x deal and got $24K on my Bluecash everyday card!

My queston is, when looking at credit karma, the credit factors have brackets (excellent, good, poor, etc) Is there a score change when you cross a bracket, or is it linear? Example, i currentlu show 20 accounts. 21 accounts or more is "excellent". Would my score increase more by crossing the line from good to excelllent than it did from going from 19 to 20?

Another example. My AAOA is exactly 2 years. Would my score drop more from 2 years to 1 year 11 months than it did from 2 years 1 month to 2 years? Less than 2 years is very poor, 2years is poor.

Jope my questioning makes sense. Let me knkw if I need to clarify more. Basically, I wa t to knkw if the labels good, excellent, poor have any impact on the number of points I have in each catagory. Or if it is a formula, and the labels are added afterwards.
Message 1 of 13
12 REPLIES
Community Leader
Super Contributor

Re: First post! Moving between brackets in catagory.

Different credit monitoring services (myFICO, Credit Check Total, Credit Karma, Credit.com, Credit Sesame, etc.) have software that "summarizes" the info on your credit report and also how well the CMS believes you are doing.  These are, as you suggest at the end of your post, arbitrary labels that depend on how that CMS decided to describe it and should not be assumed to correspond to anything definite in the credit scoring algorithm used to generate the score.

 

You can think of it a bit like "state lines" in the US.  When you cross from Georgia into Alabama, the border doesn't necessarily have anything to do with anything "real" -- like a river say, nor have the people on either side of the border changed perceptibly.  The state line is just an arbitrary border created by govt fiat, and might have been drawn any number of other places.

 

More than that, some of the implied advice that certain CMS software gives is very misleading.  You give the example of having a lot of accounts.  It is categorically false for a CMS to suggest that your credit scores would be better if you had 21+ accounts vs. 17 or 14 say.  It is true that credit scoring algorithms (whether FICO or Vantage) do make an internal distinction between whether your profile is "thin" (very few accounts) or not.  But you need really only a small number of accounts before your profile is considered by the algorithm "not thin."  For FICO it is somewhere around 4 or 5 (6+ would be very safe according to ThomThumb, who posts here).  For VantageScore, which Karma uses, the number I am told is a bit higher.  But in no way do you get any scoring benefit by adding more accounts even with VS beyond a dozen (I imagine the number is lower in fact).

 

Karma's summary software gives very misleading information about age-related factors, such as age of oldest account and average age of accounts.  Karma's summary software suggests that its score ignores closed accounts for account age and this is not in fact how its algorithm works.

 

Assuming that a  CMS is accurately telling you what your AAoA is, then in answer to your question, FICO rounds this down to a whole number.  Thus 1.9 years and 1.2 years both get treated as 1.0 years.  It doesn't follow, however, that you get some benefit for every integer change (2 years, 3 years, 4 years, etc.).  Depending on scorecard and algorithm and the company that makes it, there might be a number of years that go by that are treated the same.

Message 2 of 13
Super Contributor

Re: First post! Moving between brackets in catagory.

Good reply and information above.

 

CK should only be used for accessing your credit reports and monitoring changes to them.  Everything else, the scores, the charts with the good/poor etc. are all just fluff IMO and not very useful.

Message 3 of 13
New Member

Re: First post! Moving between brackets in catagory.

Thanks for the informative reply! So, I pretty much need to ignore the classifications. My experian is 741,according to AMEX. My equifax is 769 and my transunion is 788 according to credit karma. I'm working to get to 800 in each. At this point, i may just need time?
Message 4 of 13
Community Leader
Super Contributor

Re: First post! Moving between brackets in catagory.

Hi Cameron.  Yep, ignore the classifications though be sure to learn about the basic big scoring factors and how they work.

 

It sounds like you are using scores from very different algorithms (e.g. Vantage scores from Karma vs. FICO 8 Classic from Amex) and expecting that they mean the same thing.  They don't.  Always compare the same algorithm against itself.  For example, if you want to watch how you are improving with respect to Vantage 3, compare your Vantage 3 TU score against itself over time.  And compare your Vantage 3 EQ score against itself over time.  Karma is a great tool for that (and even more so for getting free reports).  But it would be a big mistake to look at a Vanatge 3 TU score and assume that your FICO 8 TU score would be close to the same.  Also a mistake to assume that a FICO 8 score would be the same as a FICO "mortgage" score.

 

You ask what is best for you to do to improve your scores.  Folks reading this thread can't answer that because we don't know anything about your reports, except that you have a huge number of accounts and an Amex Bluecash card.

 

Is your total CC utilization very low?  If not, moving from (say) 20% to 1-4% would be a great thing to try.

 

Are most of your credit cards reporting at $0?  If not, doing that may help a lot.

 

Do you have any open installment loans?  If not, we can suggest a painless technique for raising your scores quite a bit.

 

Do you have any derogs?  If so, working with the folks at the Rebuilding sub-forum is a key next step -- you might be able to get some of them removed.

 

Finally, yes time will help a lot.  No more new accounts and allowing everything to age.  You might want to self-inspect and figure out why you have added so many accounts in a short period of time.  (It sounds like this may have happened, can't be sure.)  That feels like a general red flag to me -- feels like there may be a thrill addiction related to "apping" that is potentially risky (all emotional decisions, especially those of thrill or fear, are risky when they involve credit and finances).  That's nothing you need to respond to, just a possible thought you might want to consider.

 

Very best wishes....

Message 5 of 13
New Member

Re: First post! Moving between brackets in catagory.

THis credit game is tough! lol. I was feeling like I had a pretty good grasp on it until just now. I need to research more on the different scoring models. I indeed monitoring my vantage scores and fico scores exactly the same. 

 

Here are my factors according to Credit Karma:

 

Credit Utilization: 1%  $860 balance over 79,300 total cc limit.

On Time Payments 100%  142 total payments TU 119 total payments equifax

Derogitory Remarks 0 on both

Age of Accounts 2 years exactly. Oldest 9 years, 6 months on a goody's card.  a couple 5 years. a couple 2 years. 8 new accounts this year out of 13 active.

Total accounts 20

Credit inquires 5 EQ, 16 TU

 

Credit Cards:  

Amex blue cash with 24K limit (started at 8K, asked for 24K on day 61 and was aproved)

Cap One VIsa Signature with 10K Limit

Local Bank VIsa with 9K limit

Chase Freedom with 8.4K limit

Bank of American Cash Rewards with 8K limit

CIti Double Cash with 7K limit

DIscover It with 5.5K limit.

 

Yes, I went on an app spree earlier this year. I opened several new credit cards as well as did  a $500 share secured loan at my credit union to increase my credit mix. 

 

I'm thinking the best thing for me now is to let some of this stuff age a little, but yes, I was agressive in increading my available credit this year. I'm not sure yet if I did any permanent harm. My thinking was if I increase the number of accounts and credit limits, then over time my score will get better and better. If I had opened 10 accounts 10 years ago, my AAoA would be very high, but I didn't know anything about how scores were figured. So now, I have many more accounts to grow together, and a couple years from now, my AAoA will be high, even if I apply for several loans, because I did it this year. So, basically, I took a little hit now to make my score incredibly strong a couple years from now. What do you think of my logic, and how would you proceed from here? Thanks!

Message 6 of 13
New Member

Re: First post! Moving between brackets in catagory.

Oh, I missed the question about installment loans. I have one Morgage around 50K that is new, so high utilization, a 15K LOC that has a 0 bablance, and the 500 dollar share secured loan ( 6 month term)  that I've made 1 payment on.

Message 7 of 13
Community Leader
Super Contributor

Re: First post! Moving between brackets in catagory.

You sound like you'll be in good shape.  Looks like a couple years with no new applications will be the best thing for you.

 

You mention that you have a Goody's card but do not list in your credit cards.  Is that CC list complete?

 

I encourage you to find out what your true AAoA is (as well as your true "age of oldest account").  Credit Karma's summary software ignores closed accounts when it comes to age-related factors, which does not reflect how FICO or Vantage works.  You would benefit from creating yout own spreadsheet that lists all your accounts and automatically computes your AAoA and AOA.  This link, provided by veteran Elim, may help:

 

https://docs.google.com/spreadsheets/d/1zG3BGlfgYkfEXeVLIklvS1SpwKrax99s1g1af9Mao_8/edit#gid=8210833...

 

Most of all I encourage you to learn a lot more about how the different credit models work, what their names are, etc.  And also make sure you have tools for pulling free credit reports (Karma is good for that and now Experian is also now offering a free monthly report) and free FICO scores.  The easiest way to get the latter is through your credit cards.  You have cards with Amex, Chase, Discover, Citi, and BOA and all of them offer free FICO scores.

 

PS.  You mention that you were hoping you have not done yourself any permanent harm from your app spree.  Aside from lowering your AAoA, no -- though if your spree included adding store cards then you will have damaged a credit score used by the insurance industry.  That score penalizes you for every store card you have.  But FICO and Vantage don't penalize you for store cards -- just that insurance industry score does.

Message 8 of 13
Regular Contributor

Re: First post! Moving between brackets in catagory.


CreditGuyInDixie wrote:

Karma's summary software gives very misleading information about age-related factors, such as age of oldest account and average age of accounts.  Karma's summary software suggests that its score ignores closed accounts for account age and this is not in fact how its algorithm works.

 

 


On CK, my TU AAA is 3.9 due to two old positive accounts that have stuck around.  My EQ AAA is .9 years.  EQ has a judgement hanging around form late 2009, TU is clean.  8 inquiries on TU vs. 3 on EQ.  Everything else the same. TU Vantage 651, EQ Vantage 735.  I'd be interested in an expaination of this one.  It's seems like my old closed accounts are putting me in a negative scoring bracket.
Message 9 of 13
Community Leader
Super Contributor

Re: First post! Moving between brackets in catagory.

Hi Sheridan.  What I can definitely tell you is two things:

 

(a)  The AAoA figure that Karma's summary software gives you ignores all closed accounts.

 

(b)  The score that Karma gives you is Vantage 3 -- which includes closed accounts (in its age-related factors), just as FICO does.

 

Therefore whatever is going on with your Vantage scores, if AAoA had anything to do with it, you'd need to compute your AAoA separately as a starting point for speculating about it -- rather than using the figures from (a).

 

Basically you have reports from two different CRAs showing very different things and having different V3 scores.  The only way I can see to get help in figuring out what is causing the difference would be to create a separate thread that describes in detail all the accounts on each report and then hope somebody with a big interest in Vantage (and reliable knowledge of it) is willing to sort through them and hazard a giess as to why the score difference.

 

You may not get any takers, however, since most people here seem to have the perspective of "It's just Vantage, who cares?"  If it were FICO 8 you might get more people who have both the interest in and knowledge of that algorithm.

 

Good luck regardless.....

Message 10 of 13