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My Score went down when I did what the website said to do?

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marty56
Super Contributor

Re: My Score went down when I did what the website said to do?


@Anonymous wrote:

 FICO points out there own flaw in the education section. A person with one credit card with a 20k limit and a 15K balance has a 75% util. Hmm 75% seems high or is it? If I have no other debt and I make $300K a year that's not really all that high. However if I make $30k a year it is very high. So if a persons FICO is lowered because they have a perceived high UTIL. then basically the score means nothing. Both of these people would benefit from obtaining additional credit when one person does not need it and the other can't afford it.


Income should never be part of any scoring system.  It's place in credit should be only to detrmine CLs.  FICO has determined that %util, regardless of income, is a risk predictor in the default on a loan.   Back in my subprime days, I had 70k off CC debt and co afford to have 100k or more  of CC debt but clearly my spending and money managment was out of control thus my FICO score prevented me from getting more credit which is ecxactly what it should have done.  They should have denied my at 7k of CC debt.

1/25/2021: FICO 850 EQ 848 TU 847 EX
Message 11 of 18
marty56
Super Contributor

Re: My Score went down when I did what the website said to do?


@Anonymous wrote:

A more realistic view might be that you're now being compared with your credit peers correctly. Before, being on the far end of the scale you were being compared on actually gave you a higher score than you should have been getting.

it's human nature to go the other way but you're as likely - if not more likely - to have benefitted unfairly than to currently be being scored unfairly.


+1

 

 Score bucketing has benefited me since I am in the major derog score group and my TU score has been as high as 776.

1/25/2021: FICO 850 EQ 848 TU 847 EX
Message 12 of 18
Anonymous
Not applicable

Re: My Score went down when I did what the website said to do?

I feel your frustration-- I think that I can safely say that most (if not all) of us would like to fully understand the whole proprietary formula(s). Further, we'd like tweak & remodel the formula in a way that benefits us best-- In a way that seems "fair" and truly indicative of both our ability & our intent. But, the fact of the matter is that it's not nearly as simple as "simple statistics". One "bucket", and one set of "rules" could never accurately weigh the risk of default for ALL. The formula may or may not be "flawed"-- I personally can't say one way or the other, because I'm not privy to the formula. But, in my opinion, "the formula" isn't the problem.

 

Lenders, not Fair Isaac, determine if and how credit scoring is used to make lending decisions. It's the job of the lenders to determine your ability to repay (vs. a FICO score that uses statistical models to only determine your risk of *defaulting* based upon the established data in your consumer credit reports). Lenders look at more (if they so desire), such as income and assets. Lenders can also add in the "human factor" of obtaining all sorts of other information that may impact your personal risk analysis.

 

Risk-based pricing isn't the fault or the child of FICO scoring. It's the club that lenders dreamed up & use to beat more money out of the masses.

Message 13 of 18
Anonymous
Not applicable

Re: My Score went down when I did what the website said to do?

If nothing else this has been a good discussion. However. I do not want to tweak the model to unduly benefit me or anyone else. In my situation the score should have not dropped if the purpose of the score is to measure credit risk. The model says by dropping my score that I am a higher credit risk. This is just incorrect, period. However there is nothing I can do about it.

 

I just want the model that is used to accurately portray the situation. In my case it does not and that could very well cost me money. 

 

FICO is not an innocent bystander and the evil banks use the FICO score to rate consumers and charge them based on this score. FICO is responsible for their product and how they market it. They know exactly how it is used and why. What I have maintained and continue to maintain is if FICO or anyone else has a system used to rate me then some checks and balances should be put into place.

 

The person that replied about having a large amount of credit card debt as well as a large income to service that debt stated the system worked and they were denied credit because their spending was out of control. FICO cannot decide that, only you can do so especially since FICO does not look at income. However  what is the money spent on? If you are spending the money on clients or products maybe the return is much greater than the debt. My point being is income from whatever source should be and is a huge factor in credit worthiness. If you have some statistical model that is trying to determine credit worthiness how else do you repay without some form of income or savings.

 

The problem with this is you get exactly what I got when you try to bucket people without using all the relevant information and trying to make everyone fit your proprietary statistical model. It gets even more convoluted when the model is constantly changing in the form of rebuckecting. You have a standard with no standard so to speak. I think at best you could use the system to generalize credit worthiness which is what many lenders have done to benefit themselves. It is no better than saying everyone with blue eyes are a higher credit risk than those with green eyes.

 

Obviously this is academic to a point. I do intend to raise these questions to my elected officials to see what their thoughts are since a few points one way or the other can make a huge difference to their constituents.  I am not in need of credit so a few points really does not matter to me. I have always had a pretty good score becuase I knew it was important to maintain. I just started really paying attention to the score and see some problems with the system.

 

I guess to put it in the simplest terms, what we have here is a game where you are only given some of the rules and those rules are constantly changing. Now I for one do not want to play in that game but I am forced to do so.

Message 14 of 18
marty56
Super Contributor

Re: My Score went down when I did what the website said to do?


@Anonymous wrote:

The problem with this is you get exactly what I got when you try to bucket people without using all the relevant information and trying to make everyone fit your proprietary statistical model. It gets even more convoluted when the model is constantly changing in the form of rebuckecting. You have a standard with no standard so to speak. I think at best you could use the system to generalize credit worthiness which is what many lenders have done to benefit themselves. It is no better than saying everyone with blue eyes are a higher credit risk than those with green eyes.

I guess to put it in the simplest terms, what we have here is a game where you are only given some of the rules and those rules are constantly changing. Now I for one do not want to play in that game but I am forced to do so.


Actually all evidence points to the fact that FICO is slow to change any aspect of the scoring system.  While it may be hard to do in practice, the rules of having and maintaining a high FICO score are simple.

 

In the long run, when benefit from score bucketing because were are placed in groups of people with similar credit backgrounds. 

1/25/2021: FICO 850 EQ 848 TU 847 EX
Message 15 of 18
haulingthescoreup
Moderator Emerita

Re: My Score went down when I did what the website said to do?

 


@marty56 wrote:

@Anonymous wrote:

The problem with this is you get exactly what I got when you try to bucket people without using all the relevant information and trying to make everyone fit your proprietary statistical model. It gets even more convoluted when the model is constantly changing in the form of rebuckecting. You have a standard with no standard so to speak. I think at best you could use the system to generalize credit worthiness which is what many lenders have done to benefit themselves. It is no better than saying everyone with blue eyes are a higher credit risk than those with green eyes.

I guess to put it in the simplest terms, what we have here is a game where you are only given some of the rules and those rules are constantly changing. Now I for one do not want to play in that game but I am forced to do so.


Actually all evidence points to the fact that FICO is slow to change any aspect of the scoring system.  While it may be hard to do in practice, the rules of having and maintaining a high FICO score are simple.

 

In the long run, when benefit from score bucketing because were are placed in groups of people with similar credit backgrounds. 


 

I think that FICO is utterly delighted to change any aspect of the scoring system. Smiley Very Happy After all, they're going to make money by selling new scoring formulae to lenders.

 

It's the lenders who don't change. They're familiar with what they use, warts and all, and they're deeply reluctant to switch.

* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
Message 16 of 18
Anonymous
Not applicable

Re: My Score went down when I did what the website said to do?

Rebucketing is changing the rules. As it was explained by FICO to me when you are rebucketed you are compared with a group they FICO feel more closely represent your current situation. The factors and how much each is weighted changes from bucke to bucket.

 

If I am in bucket A. with a 775 credit score and the main factor that is keeping from having a higher rating is say high utilization. So I need to reduce my utilization rate by reducing debt or obtaining more credit. Say I choose to do so by paying down debt. That's a good thing, I have less debt and my utilization rate has dropped from 60% to less than 10%  Great day my score should go up. Then the other shoe falls, since you reduced debt and have a low utilization rate you are now rebucketed into the B. bucket. Now the major factor is you are not utilizing your credit enough or some other factor not considered before.

 

In general your statement is true, if you pay bills on time and do not run up huge balances then you will have a fairly good credit score. The kicker is will it be just good enough to qualify you for the best interest rates or did you just fall a little short even though you have done what they FICO said you should do to improve your score?

Message 17 of 18
haulingthescoreup
Moderator Emerita

Re: My Score went down when I did what the website said to do?

 


@Anonymous wrote:

Rebucketing is changing the rules. As it was explained by FICO to me when you are rebucketed you are compared with a group they FICO feel more closely represent your current situation. The factors and how much each is weighted changes from bucke to bucket.

 

If I am in bucket A. with a 775 credit score and the main factor that is keeping from having a higher rating is say high utilization. So I need to reduce my utilization rate by reducing debt or obtaining more credit. Say I choose to do so by paying down debt. That's a good thing, I have less debt and my utilization rate has dropped from 60% to less than 10%  Great day my score should go up. Then the other shoe falls, since you reduced debt and have a low utilization rate you are now rebucketed into the B. bucket. Now the major factor is you are not utilizing your credit enough or some other factor not considered before.

 

In general your statement is true, if you pay bills on time and do not run up huge balances then you will have a fairly good credit score. The kicker is will it be just good enough to qualify you for the best interest rates or did you just fall a little short even though you have done what they FICO said you should do to improve your score?


 

Actually, this is incorrect. Utilization is not a bucket determinant.

 

There are two negative score buckets, according to whether you have serious derogs (60-90-120-150-180 day lates, charge-offs, collections) and/ or public records (BK, liens, judgments, etc.)

 

The other buckets appear to be length-of-history-driven, and whether you have new credit (I just lost points for having my youngest account go over 6 months) and maybe whether you have a thin file.

 

Changing util just moves you up and down within a bucket.  hth

* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
Message 18 of 18
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