If you could tweak the FICO score system

[marty56]

Here are my changes:

1.  Lates drop off in 2 years.  No GW.

2.  PFD takes 2 years to drop off.  PFD in 2 years.

3.  No AU

4.  INQs dont count

5.  Medical collections/accounts cant be reported unless it was done through an exension of credit (LASIX with say 2 years no paymrnts no interest).

6.  No credit mix.  Credit is credit.

7.  Score hit for CL increase (temporary).  Treated like new account.

8.  Score hit for CFL.

9.  Same inpact on score for new credit regardless of score and bucket

Just my thoughts.

Message Edited by marty56 on 01-10-2008 09:48 AM

[haulingthescoreup]

I like #1 and #2!

I'll add one: I don't have collections or charge-offs, but I think that if old debt is paid in full --and I mean the original amount plus a reasonable annual interest, not all the crap that gets glued on to it --the score ding should be cut in half. There are too many disincentives to pay less than originally charged, or not at all. You shouldn't be so penalized for trying to do the honorable thing.

[marty56]

I will expand item #1 to cover all debt PIF  Yes also I think people who try to hinestly pay the debt back desrve a break.

[MidnightVoice]

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marty56 wrote:

I will expand item #1 to cover all debt PIF  Yes also I think people who try to honestly pay the debt back deserve a break.

I totally agree

[Anonymous]

My changes would be:

1.  Allow one and only one AU to count, unless it can be somehow linked to a family member - then allow 2.   But don't give full credit for these.   Taking ALL AU's away as FICO 08 plans to will really tank alot of young people scores as well as spouse's who rely on their partner's cards.

2. Cap all negative reporting at 5  years, including all BK chapters, open collections, liens, etc.  5 years is enough of a penalty if the user cleans up their act.

3.  Allow 1 or 2 inquiries per year without dinging the score.   And, this is important, require all inquiries to state WHY the hard pull is occurring.   It is senseless to get your score lowered due to opening a checking account or other purpose that will never cause you to increase your debt.  This is my biggie.

4.  Retain history of closed accounts forever, for the sole purpose of 'age of file'.  If you open an account in 1987, close it in 1995 because you find a better card (lower int rate, better rewards, etc), closing the account should NOT hurt you.   Don't report it on the credit report if you want, but keep the history in the credit file somewhere for purposes of calculating age of file.

This would, in my opinion, better predict risk than the current system.

[MidnightVoice]

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Boscoe wrote:

My changes would be:

3.  Allow 1 or 2 inquiries per year without dinging the score.   And, this is important, require all inquiries to state WHY the hard pull is occurring.   It is senseless to get your score lowered due to opening a checking account or other purpose that will never cause you to increase your debt.  This is my biggie.

I think to a certain extent, and in a different way, this is being done.  The new alogarithm is supposed to take into account that CC useage has changes with the advent of many different reward cards, and people will now have a larger number of cards, all for different purposes.  Hence the days when having 5 cards automatically meant someone was likely to get in financial difficulty are gone.

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Boscoe wrote:

My changes would be:

4.  Retain history of closed accounts forever, for the sole purpose of 'age of file'.  If you open an account in 1987, close it in 1995 because you find a better card (lower int rate, better rewards, etc), closing the account should NOT hurt you.   Don't report it on the credit report if you want, but keep the history in the credit file somewhere for purposes of calculating age of file.

This would, in my opinion, better predict risk than the current system.

Given a Gaussian distribution of scores, I think this would horribly bias the score towards older people, and make it MUCH harder to advance one's scores.  It would give undue weight to age (both of accounts and people), and I think it might well be a worse predictor of risk

[wmarat]

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Boscoe wrote:

My changes would be:

1.  Allow one and only one AU to count, unless it can be somehow linked to a family member - then allow 2.   But don't give full credit for these.   Taking ALL AU's away as FICO 08 plans to will really tank alot of young people scores as well as spouse's who rely on their partner's cards. Agreed

2. Cap all negative reporting at 5  years, including all BK chapters, open collections, liens, etc.  5 years is enough of a penalty if the user cleans up their act. I would make it 15 years. Do not buy if you do not have money.

3.  Allow 1 or 2 inquiries per year without dinging the score.   And, this is important, require all inquiries to state WHY the hard pull is occurring.   It is senseless to get your score lowered due to opening a checking account or other purpose that will never cause you to increase your debt.  This is my biggie. I would allow up to 5 inq. for established credit users and up to 25 for new credit users.

4.  Retain history of closed accounts forever, for the sole purpose of 'age of file'.  If you open an account in 1987, close it in 1995 because you find a better card (lower int rate, better rewards, etc), closing the account should NOT hurt you.   Don't report it on the credit report if you want, but keep the history in the credit file somewhere for purposes of calculating age of file. Agreed

This would, in my opinion, better predict risk than the current system.

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[Anonymous]

Boscoe wrote:

My changes would be:

1.  Allow one and only one AU to count, unless it can be somehow linked to a family member - then allow 2.   But don't give full credit for these.   Taking ALL AU's away as FICO 08 plans to will really tank alot of young people scores as well as spouse's who rely on their partner's cards. Agreed

2. Cap all negative reporting at 5  years, including all BK chapters, open collections, liens, etc.  5 years is enough of a penalty if the user cleans up their act. I would make it 15 years. Do not buy if you do not have money.

3.  Allow 1 or 2 inquiries per year without dinging the score.   And, this is important, require all inquiries to state WHY the hard pull is occurring.   It is senseless to get your score lowered due to opening a checking account or other purpose that will never cause you to increase your debt.  This is my biggie. I would allow up to 5 inq. for established credit users and up to 25 for new credit users.

4.  Retain history of closed accounts forever, for the sole purpose of 'age of file'.  If you open an account in 1987, close it in 1995 because you find a better card (lower int rate, better rewards, etc), closing the account should NOT hurt you.   Don't report it on the credit report if you want, but keep the history in the credit file somewhere for purposes of calculating age of file. Agreed

This would, in my opinion, better predict risk than the current system.

______________

The response to #2 is ridiculous.    So, you miss a payment once and you suffer for it for life?   That is an uninformed comment made by someone who must be living a sheltered life and only uses credit to buy bubble gum.    Remember, this system is supposed to predict risk - not permanently punish people.    There would be alot less credit being issued and the economy would probably suffer if this were enacted.

Responding to Midnightvoice and the response to #4 above -

Yes, it would allow older folks to have better scores, but to clarify, the system should not negatively affect scores simply because an old positive account was closed and age of file is reduced.   A lower score would indicate increased credit risk - an assumption that is not backed up by any facts in this case.

[Anonymous]

The absolute #1 most ridiculous thing that affects your score is inquiries. That should be removed. Everybody claims to shop around for the best rate, but this requires multiple people to pull your credit. Last year I went shopping for a new home and a new car requiring tons of pulls on my credit. Especially for the car shopping. The dealership pulled my credit, then had 7 different banks pull my credit to try to find me the best rate. I have a total of 12 inquiries on my credit now. Having inquiries effect your credit is the dumbest idea ever and the only way I can see that being a reason is to lower your credit score in order to get lenders to charge you more.

[wmarat]

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Boscoe wrote:

Boscoe wrote:

My changes would be:

1.  Allow one and only one AU to count, unless it can be somehow linked to a family member - then allow 2.   But don't give full credit for these.   Taking ALL AU's away as FICO 08 plans to will really tank alot of young people scores as well as spouse's who rely on their partner's cards. Agreed

2. Cap all negative reporting at 5  years, including all BK chapters, open collections, liens, etc.  5 years is enough of a penalty if the user cleans up their act. I would make it 15 years. Do not buy if you do not have money.

3.  Allow 1 or 2 inquiries per year without dinging the score.   And, this is important, require all inquiries to state WHY the hard pull is occurring.   It is senseless to get your score lowered due to opening a checking account or other purpose that will never cause you to increase your debt.  This is my biggie. I would allow up to 5 inq. for established credit users and up to 25 for new credit users.

4.  Retain history of closed accounts forever, for the sole purpose of 'age of file'.  If you open an account in 1987, close it in 1995 because you find a better card (lower int rate, better rewards, etc), closing the account should NOT hurt you.   Don't report it on the credit report if you want, but keep the history in the credit file somewhere for purposes of calculating age of file. Agreed

This would, in my opinion, better predict risk than the current system.

______________

The response to #2 is ridiculous.    So, you miss a payment once and you suffer for it for life?   That is an uninformed comment made by someone who must be living a sheltered life and only uses credit to buy bubble gum.    Remember, this system is supposed to predict risk - not permanently punish people.    There would be alot less credit being issued and the economy would probably suffer if this were enacted.

1.No my dear ficofriend, those who are late on payments have sheltered life. I make my living working very hard, so I do not have such a luxury as late payments. I even do not agree to carry balances and pay ridiculous APR.

2. I have about 10 CC, around 40000 combimed credit and I spend monthly about 1500 on credit cards which is 60% of my monthly outflow.

3. Regarding uninformed. Please do not make assumptions, you never can know.

Responding to Midnightvoice and the response to #4 above -

Yes, it would allow older folks to have better scores, but to clarify, the system should not negatively affect scores simply because an old positive account was closed and age of file is reduced.   A lower score would indicate increased credit risk - an assumption that is not backed up by any facts in this case.

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