How would you define FICO "gaming"?

[Subexistence]

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@Anonymous wrote:

I would say that for the most part, those that have learned the "rules" of the game and are into gaming which is a 200-level course would most certainly be well versed on the 100-level course stuff which are the basics of always making on-time payments, keeping utilization low, etc.  The chances of these individuals "screwing up" and hurting their credit outside of an adverse life event (job loss, divorce, medical expenses, etc.) therefore would be less, generally speaking.

Looking at that is a bit different than simply looking at someone that is into gaming and then looking at their credit scores... as, again, gamers can have a 500 score or an 800 score.

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I agree with everything you say.  I would like discuss the difference between theoretical scores and estimated credit scores. I define theoretical scores as a measurement of someone's true risk level. According to http://investing.curiouscatblog.net/2015/12/08/default-rates-on-loans-by-credit-score/ 

someone with scores of 740-850 have a default rate of .4% and someone with scores of 550-619 would have a default rate of 17%

Thus if someone had a theoretical score between 740-850, then that person would have a default rate of exactly .4% while someone else with a theoretical score between 550-619 will have an exact default rate of 17%. Someone's true risk level, I think depends on his/her knowledge/attitude/responsbility/behavior to credit.

However FICO can never know someone's true risk level so it must estimate that person's true risk level based on past behaviors and assign an estimated score. Thus it is possible for FICO to provide an estimated score of 500 to someone based on a past BK when that person has the responsibility of someone with theoretical score between 740-850 due to learning gaming from that forum. In this case if we had 1000 gamers with the exact same situation as that 'someone', we would expect only 4 defaults with each gamer having exactly .4% case of defaulting despite FICO estimating them all to have scores of 500. 

My point with all this is while I agree that looking into someone's gaming and then their estimated scores of 500 or 800 doesn't shout a strong correlation, I expect a pretty strong correlation between gamer behavior and high theoretical scores.

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[Anonymous]

I guess I'm not understanding how you are defining "true" risk level verses actual FICO score, as FICO score is supposed to represent risk level.  Do you mean actual FICO score with "gaming" included verses true score without gaming?  This is where I'm confused from your post.  I like this discussion but want to make sure I'm understanding what you mean regarding true risk level verses actual.

[Subexistence]

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@Anonymous wrote:

I guess I'm not understanding how you are defining "true" risk level verses actual FICO score, as FICO score is supposed to represent risk level.  Do you mean actual FICO score with "gaming" included verses true score without gaming?  This is where I'm confused from your post.  I like this discussion but want to make sure I'm understanding what you mean regarding true risk level verses actual.

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I'm saying someone with a current FICO score of 575 could have a default rate of only .4% due to his FICO score not being respresentative of his true risk due to FICO error.

Basically a gamer's FICO score isn't  accurate representation of his real risk level.

I will provide an example. Bill was once an irresponsible person who had to declare BK, so FICO calculated a score of 575 for him. Penny has always paid her bills on time so FICO calculated a 760 for her. Bill comes to this forum and learns some FICO gaming tricks from Penny and copies her behavior. Let's assume within a few months, Bill has become just as responsible as penny. At this point, if Kenneth Chenault gave them both the same cc with the same terms, they would have equal chances of defaulting on it. However bill's FICO score of 625 may not be as high as Penny's FICO score. All I'm trying to say is that FICO scores in this case aren't completely accurate indicators of someone's risk level. 

What I mean by theoretical score is a measurement someone's true risk level. In this case, bill and penny should have the same theoretical scores. However their FICO scores given by myFICO company are different.

I apologize for not being clear the first time. Does this explanation help clarify? I'd be more than happy to clarify more if my explanations are still obscure.

[Anonymous]

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@Subexistence wrote:

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Bill has become just as responsible as penny.

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Has he?  There's no way to quantify that unfortunately.  In fact, it's commonly accepted that those that do default are statistically more likely to do it again.  As with almost anything in life, the best indicator of the future is the past.  While there are certainly examples where Bill would become just as responsible as Penny, there are also plenty of examples statistically that will tell you that Bill is still a greater risk, which in this case would be correctly represented by his credit score relative to that of Penny.

[MakingProgress]

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I will provide an example. Bill was once an irresponsible person who had to declare BK, so FICO calculated a score of 575 for him. Penny has always paid her bills on time so FICO calculated a 760 for her. Bill comes to this forum and learns some FICO gaming tricks from Penny and copies her behavior. Let's assume within a few months, Bill has become just as responsible as penny. At this point, if Kenneth Chenault gave them both the same cc with the same terms, they would have equal chances of defaulting on it. However bill's FICO score of 625 may not be as high as Penny's FICO score. All I'm trying to say is that FICO scores in this case aren't completely accurate indicators of someone's risk level. 

What I mean by theoretical score is a measurement someone's true risk level. In this case, bill and penny should have the same theoretical scores. However their FICO scores given by myFICO company are different.

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In the example quoted I am Bill (thats acutally my name so this works).

I belive  I was always as responsible as Penny, however there were some life and relationship issues which caused me to do things I wouldn't normally do such as declare BK and miss payments.  Now those life and relationsip issues are in the past and my behavior has returned to normal.    FICO has no way to know why certian things happened they only know that they did.  Therefore FICO has now assigned me a lower score based upon what they know about me.

Since FICO has given me a score that I believe does not accurately reflect my level of responsibility/credit risk I am doing what I can to raise my score using some of the tricks I have learned here.   So yes I am gaming the system. 

[Anonymous]

This conversation is very strange.......

All examples of "gaming" the system are done using quality credit management techniques. Paying off or down on credit cards, the ability to open new lines of credit to obtain a higher score and so on. The FICO system rewards those that exhibit these behaviors with higher scores.  If your score is 575, it's due to you defaulting on your financial obligations. Doesn't matter if it was by lack of attention or situations beyond your control. Most people that have poor credit scores have poor financial management. Sure, there are some that had some catastrophe befall them that caused them to default but they are in the minority. Some people are just wired to not be responsible with money and some are just stupid. Met an individual that had several large charge-offs with Bank of America and others and basically said he wasn't going to pay them as they got his money in the bail out and it was their fault he got in trouble in the first place. Of course in the next breath he's cursing his 17.90% auto loan. His credit was sloppy before the meltdown and will most likely continue to be sloppy because that's just who he is. He's the main reason why a short stint paying your bills on time won't affect your score very much, you need a few years under your belt to show you are really on the path to fiscal responsibility. Is this fair to the guy that fell on hard times do to circumstances beyond his control, not really but if the program is as consistent in how you get your scores redeemed as it is when you default, it's doing exactly what it was desiged to do. I think the credit bureaus have made it easy to manipulate scores to "game" the average consumer into being responsible credit citizens which is quite frankly...brilliant. 

[jamie123]

I think that there are "honest" ways to game the system and less "honest" ways and it covers a pretty broad spectrum and some ways haven't been mentioned here yet.

Is this gaming the system?:

1. Using the "Pay for Delete" method to have negatives removed.
2. Using "Good Will" letters to have negatives removed.
3. Using the "Dispute Method" to have negative items removed.
4. Using "Front Office Phone Numbers" to contact higher ups about negatives, reconsideration and CLIs.
5. Using the "Dispute with Verification 30 Day Time Clock Method" to have negatives removed. (Not sure we can discuss this on MyFICO.)
6. Churning
7. Manufactured Spending

Depending on how thorough and involved you want to become at increasing your credit scores, you have many options to try from the legitimate to the truly nefarious.

The average consumer has no idea that these options are available to him or her and unless you seek out a site like MyFICO you probably won't learn about them. This definitely gives users of sites like MyFICO a leg up over your average consumer because you learn techniques to raise and keep your scores high. You will by default probably become a better credit risk in the long run too, but for sure you will cut down the time it takes to increase your scores.

I mean...Who would have thought that by having 1 card report a small balance and all others report $0 that you could raise your scores? The difference for me between 1 card reporting a small balance and all cards reporting $0 is 18 points! I know for a fact that in my previous life before MyFICO, I paid all my cards to $0 before applying for loans thinking that was the prudent thing to do! (Think of all that extra interest I probably paid!)

[Anonymous]

In using the items you describe as possible "gaming" scenarios there are several that require the creditor and/or and third party to participate in removing or correcting your report. In writing a goodwill letter you are asking a creditor to forgive a transgression and based on what you provide you may get them to agree. A few have posted how a catastrophe can cause these types of scenarios and a good will letter showing an exemplary payment history prior to the default can go a long way to getting a creditor to cut you some slack. Same with payment and delete options. I got a collection agency to drop a $100 item based on the original bill being $46,000 and having moved this $100 item was left owing and they couldn't find us. It still pissed me off something terrible that the greedy doctor's office felt compelled to turn us into collections over this but money owed is money owed.

Once again...if you need to creditor to participate in reconsidering a negative reporting and you can present a case that they review and act on, this is not gaming the system but smart credit management. Of course if your just sloppy with your bills and have a track record of missed payments....good luck getting anyone buying into your story. So I can't consider goodwill letters, disputes, second chance phone numbers, pay for delete and other similar avenues to improve scores as gaming the system.

Things that you can do where you don't rely on others to be an integral part of whether or not you are successful in improving your scores are more "gaming" than some of the things you listed.

[Anonymous]

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@Anonymous wrote:

In using the items you describe as possible "gaming" scenarios there are several that require the creditor and/or and third party to participate in removing or correcting your report. In writing a goodwill letter you are asking a creditor to forgive a transgression and based on what you provide you may get them to agree. A few have posted how a catastrophe can cause these types of scenarios and a good will letter showing an exemplary payment history prior to the default can go a long way to getting a creditor to cut you some slack. Same with payment and delete options. I got a collection agency to drop a $100 item based on the original bill being $46,000 and having moved this $100 item was left owing and they couldn't find us. It still pissed me off something terrible that the greedy doctor's office felt compelled to turn us into collections over this but money owed is money owed.

Once again...if you need to creditor to participate in reconsidering a negative reporting and you can present a case that they review and act on, this is not gaming the system but smart credit management. Of course if your just sloppy with your bills and have a track record of missed payments....good luck getting anyone buying into your story. So I can't consider goodwill letters, disputes, second chance phone numbers, pay for delete and other similar avenues to improve scores as gaming the system.

Things that you can do where you don't rely on others to be an integral part of whether or not you are successful in improving your scores are more "gaming" than some of the things you listed.

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Hi Dan.  You write:

In using the items you describe as possible "gaming" scenarios there are several that require the creditor and/or and third party to participate in removing or correcting your report.

Unsure who the "you" is in your sentence, but I am guessing it is me, since I am the guy who listed a bunch of scenarios.  Of the six I listed, only one involved a creditor or third party removing or correcting data from one's report -- so "several" would be an overstatement.  And in that one scenario, part of it involved the person confirming that the derogs in question were fully accurate, so "correcting" would not be a good description of that scenario either.

You later write that getting negative data deleted could not be gaming the system, since it was good credit management.  Actually I think every instance of a person gaming the system is good credit managment.  As I defined how I was using the "gaming" phrase, there's no way a person could be gaming the system without also engaging in a deliberate carefully thought out attempt to raise his score, which sounds like very smart credit management to me.  Indeed, I authored a (now very long) thread wherein I vigorously promoted one of the system-gaming scenarios (the Share Secure Loan Technique thread).  I wasn't nearly smart enough to discover the technique, but I certainly advocate it.  And indeed all six of the game-the-system techniques I mention are techniques I would strongly recommend to anyone.

There are other credit score improving techniques that don't involve gaming the system, e.g. if a person has a mountain of CC debt that he is carrying month to month -- and he begins paying it off.  That will help his score but it also is sound financial management, since he'll save himself a ton of interest.  Getting a mortgage or a car loan might end up helping your score (down the road), but then you are getting the loan principally because you really want a home or car, not because you're trying to manipulate your FICO score.    The way I described gaming is engaging in somewhat arcane tricks for which there was no other justification except because you discovered a technique for raising your score.

And I would agree with you that people with false data on their report (e.g. a Day 30 late that never happened, or was clearly the fault of the creditor in some way) can be removed without that feeling like gaming the system, because that's really what the dispute process was put in there for -- to correct errors on one's credit reports.

As I read some of the responses, I wonder whether some people object to the phrase "gaming the system" because part of their definition includes "the kind of behavior that morally bad engage in."  Thus people see in one or more of those six examples something that they themselves do, and they feel like they are being criticized or attacked.  But for me, at least the way I defined it, there is no moral content to the phrase.  Indeed, if there is any at all, I'd say that I am the biggest supporter and encourager of people using those six techniques.  If there is an "ought" from my end, I imagine I am closer to feeling like people ought to game the system, since as you said people ought to engage in good credit management.

[Anonymous]

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@Anonymous wrote:

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I think the credit bureaus have made it easy to manipulate scores to "game" the average consumer into being responsible credit citizens which is quite frankly...brilliant. 

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This is a great point.