Inquiry Master Thread - understanding inquiries and how the affect your credit score

[Anonymous]

@Anonymous Yes, I do remember that thread. Very interesting. It will be nice when it’s all mapped out and we know the thresholds.

[Anonymous]

@AnonymousFor AZEO, >$5, but <$100 and <4%, BUT that 4% threshold may depend on scorecard, so it may or may not apply to you.

[Anonymous]

Hey @Anonymous @Anonymous @dragontears @Thomas_Thumb ,

I started a thread specific to FICO Score 8 to try to capture those things we know, we think we know and we need to uncover.

FICO Score 8 Master thread: what we know, what we ...

There are many duplicate questions with slightly different wording. Find a specific answer can be painful.  My thought was to capture the bulk of what is known and have it located in one place to make it faster and easier to get the right answer with a lot less time and effort. 

I respect and invite your expertise, and did not want to name any of you there if you did not have interest. If a modification needs to be made, by all means let me know...including if it is an idea not worthy of action.

Thanks in advance.

[Anonymous]

@Anonymous It’s a big undertaking and I applaud you if you’re going to organize it and maintain it. I don’t mind contributing what Ive learned. You’ve pretty much got a big head start with the information here on scorecards and inquiries!

[Anonymous]

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@Anonymous wrote:

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@Anonymous wrote:

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Hey @Anonymous 

Both debt $$ and Utilization matter. I had a recent test of that.

The free MyFICO score estimator tool asks 11 questions (maybe more on one's situation) to estimate a score without a direct examination of your credit report. See below.

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Question 6 lists $$ breakpoints. These thresholds appears to line up with my credit profile and scorecard.

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Q6 - Total balance (less mortgage) of cards and loans: only mortgage, <$500, $500-999, $1000-4999, $5000-9999, $10K-20K, >$20K

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That is exactly why I thought going under $500 would cause some score/reason changes. Your 3% aggregate util is my 10%.

I'm letting 4% util report on all 4 cards for May. In June I can see what happens with a drop below $500.

I think you'll find this post by @HeavenOhio to be very interesting: Effect of low balances on my scores  

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@Anonymoushelpful indeed. Many thanks! So AZEO, with 1 at > $1<$500 AND <3% AGG UT, correct? per @Anonymous post "All Zero Penalty to AZEO"

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I'm now thinking that my June test should be an aggregate balance change to $499 from $1087 in May (mid-May 3B since AMEX will be last to close on May 13th.).

I just found something interesting with TU 8. My AMEX BCE, opened on 2/13/20 just showed up on my TU profile today, 4/23/20.

Balance change from $586 to $1046 and no change in TU 8 score! Still +1 from the 5% to 4% drop in aggregate utilization. So TU 8 doesn't seem to care about a $1000 threshold. On my scorecard, of course.

Aggregate utilization change from 3.354 to 3.610 actual. Still same 4%.

[Anonymous]

Come to think of it we could do several of these master threads on like the 5 portions of the pie and then link to those from the version 8 master thread.

For instance this pretty much covers the new credit portion of the pie because we explained the dynamics of age of youngest revolving account (segmentation factor) and inquiries (Scoring factor).

[Anonymous]

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@Anonymous wrote:

@Anonymous I’m pretty sure I explained how scorecard assignment takes place in a prior post in this thread. First it decides clean or dirty. If clean it then moves to thick or thin. Then it moves to aged or non-aged. Then last it determines whether you have a revolver under 12 months of age. Those four elements determine your scorecard, if your profile is clean.

Common wisdom says you are clean if you have nothing worse than one 30 day late. Common wisdom says you are thick if you have 5 or 6 accounts, (open and closed counts). Aged goes from AoOA. We don’t know the exact threshold, it’s been theorized from 10 to 15 to more years. The one thing we do know is the threshold for youngest revolver is 12 months.

All this is based on version 8 and does not necessarily apply to other versions except for the scorecard schema. Thresholds may be different among versions.

Also to answer one of your prior questions, each bureau has their algorithm tweaked slightly on certain metrics, so you will have a slightly different score even if the data is 100% the same among bureaus, which is not typical. Usually there are slight differences.

Inquiries have nothing to do with scorecard assignment but they do influence the signal strength of other metrics.

Inquiries return the points at 365 days assuming it doesn’t fall within a bin. The point award for scorecard change comes when your youngest revolver is 12 months old on the first of the month. If the data is the same among the three bureaus, so is the scorecard.

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Reagrding the statement in red, are "bins" referring to the number of INQ's you have within a 2 year period? For example on Credit Karma they have ranges for "good" "average" and "bad" groups of # of INQ's. 0 is the best, then 1-2, then 3-4 so on and so forth.

If someone has 2 INQ's and then applies for a CC therby incurring both a new INQ and a new account, would that newly aquired INQ possibly put someone into a different bin thereby changing how the algorthim determines your creditworthiness for that specific application? (I think this is the scorecard reference you made in this same post)

I'm just learning about the concepts of binning and scorecards so please bare with my ignorance towards the subject.

[Anonymous]

@Anonymous No it’s referring to a 12 month period. And nobody knows exactly where the thresholds for the bins are even though I know you think someone would’ve tested that. But then again it may vary by scorecard. No being in a different bin Itself has nothing to do with your creditworthiness or how lenders view you, they simply look at the total number of inquiries in periods of time.

To explain the concept I’m going to give an example, but these are not real numbers and these are not the real bins.

Let’s say inquiry one costs you 3 points, inquiry 2 costs you 4 points, inquiry three may not cost you any points.

Because there may be a bin from 2 to 3, meaning once you cross into a bin, you incur a penalty, but you won’t incur a penalty again until you cross into the next bin which may not start until number 4.

4-5 maybe binned, 6-7 maybe binned. So the point is not every inquiry will cost you points. They fall into little bins or buckets where there are grouped together and once you cross into the next bin, your assessed a penalty.

Also keep in mind certain inquiries do not cost you points at all, like from Insurers or employers or SPs.

Hope this is helpful.

[Anonymous]

By the way if you’d like to know more, there are some great posts by Thomas_Thumb that have graphics and better explanations.

[Anonymous]

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@Anonymous wrote:
By the way if you’d like to know more, there are some great posts by Thomas_Thumb that have graphics and better explanations.

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Source/Link?