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I thought I understood FICO scoring ...

NYC_Fella
New Contributor

I thought I understood FICO scoring ...

... but clearly I don't.

 

My EX and EQ FICO 8 reports have EXACTLY all the same information, with just one difference. EX shows 7 inquiries while EQ shows none. There is absolutely no other difference, whether it be number of accounts (closed and open), account balances, account ages, payment history, or any other conceivable metric.

 

So why is my EX score (702) HIGHER than my EQ score (696)? Logic would dictate that it should be the other way around.

Message 1 of 17
16 REPLIES 16
FireMedic1
Super Contributor

Re: I thought I understood FICO scoring ...

Each CRA has they're own algorithms to come to a score they provide. If all 3 were exactly the same. Man it would be boring around here. LOL!!! Seriously, they each look at different things in their own ways.






Homeowner since Sept 2020. My posts are JMHO. My siggy is not to brag. Just sharing my experiences after BK from learning here from rebuild to recovery @ 540's.
Message 2 of 17
NYC_Fella
New Contributor

Re: I thought I understood FICO scoring ...

Again, I thought I understood that. But my understanding is that Fair Isaac calculates the score based on information received from the creditors. Otherwise the CRAs could just generate their own scores based on their own individual algorithms instead of paying Fair Isaac millions of dollars. It makes no sense.

 

And yes, I understand that scores can be different among CRAs based on subtle differences in the data reported. But I've never seen a credible explanation for scores being different when the underlying data is identical.

 

From the myFICO site: "In the U.S., there are three national credit bureaus (Equifax, Experian and TransUnion) that house credit histories on most of us. Each of these agencies uses the FICO® Score algorithm to produce a version of the FICO® Score based on the data they collect on each consumer." This implies that there is a single algorithm that may yield different results based on the data that each CRA posseses.

 

I don't get it.

Message 3 of 17
Horseshoez
Valued Contributor

Re: I thought I understood FICO scoring ...

@NYC_Fella, its as @FireMedic1 said, each of the three CRAs have the core Fair Issac models, but each of them paid Fair Issac for unique modifications to their model.  If you have the same items reporting and the exact same score for any two of the CRAs, it is more of a fluke than anything else. 

I categorically refuse to do AZEO!

Message 4 of 17
NYC_Fella
New Contributor

Re: I thought I understood FICO scoring ...

Thanks, that's the only possible explanation. I have no doubt that you're correct, but it bothers me that I've never seen that officially explained anywhere (the fact that Fair Isaac has three separate algorithms, not just a single one). No disrespect to all the highly experienced and helpful contributors here!

 

If I were a CRA, I would find it much more effective to build my own model and save a ton of money! The model can't be particularly sophisticated. Yes, I'm a tech nerd. 😊

Message 5 of 17
Horseshoez
Valued Contributor

Re: I thought I understood FICO scoring ...


@NYC_Fella wrote:

Thanks, that's the only possible explanation. I have no doubt that you're correct, but it bothers me that I've never seen that officially explained anywhere (the fact that Fair Isaac has three separate algorithms, not just a single one). No disrespect to all the highly experienced and helpful contributors here!

 

If I were a CRA, I would find it much more effective to build my own model and save a ton of money! The model can't be particularly sophisticated. Yes, I'm a tech nerd. 😊


LOL, only 3?  How about 28 different models?

I categorically refuse to do AZEO!

Message 6 of 17
NYC_Fella
New Contributor

Re: I thought I understood FICO scoring ...


@Horseshoez wrote:


LOL, only 3?  How about 28 different models?


I meant for FICO Score 8. A customized model for each of the 3 major CRAs.

Message 7 of 17
stw715
Contributor

Re: I thought I understood FICO scoring ...


@NYC_Fella wrote:

... but clearly I don't.

 

My EX and EQ FICO 8 reports have EXACTLY all the same information, with just one difference. EX shows 7 inquiries while EQ shows none. There is absolutely no other difference, whether it be number of accounts (closed and open), account balances, account ages, payment history, or any other conceivable metric.

 

So why is my EX score (702) HIGHER than my EQ score (696)? Logic would dictate that it should be the other way around.


May I ask how old are those inquiries and what types of inquiries?, like if they were all from credit cards, or all auto loans etc.

 

 



Message 8 of 17
NYC_Fella
New Contributor

Re: I thought I understood FICO scoring ...


@stw715 wrote:

May I ask how old are those inquiries and what types of inquiries?, like if they were all from credit cards, or all auto loans etc.


Good question. Of the 7; 3 are over a year old so they shouldn't factor into the score, 2 are from banks within the last 3 months, and 2 are related to a very recent move (landlord and utility company) which I believe wouldn't factor in either. So I guess the only "real" ones are the 2 from the banks. All were for CC applications save the landlord and the utility company.

Message 9 of 17
SoonerSoldier33
Regular Contributor

I: I thought I understood FICO scoring ...

It's pretty well known that each of the 3 CRAs have their own unique FICO algorithm for all the different scoring models. So, your scores may vary between the CRAs both bc of different info reported to each CRA, and the differences between the unique algorithms. As of today, my TU and EQ credit reports are 100% identical...not 1 single difference between either report. TU FICO 8: 678  EQ FICO 8: 669.  






Rebuild almost complete in the quest for an auto loan in the near future, and then heading into the garden for a while.
Message 10 of 17
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