Old Models Dip - Newer Models Remain the Same ??

[EW800]

Hello All,  

I am hoping to get the input of some of our experts out there, if I may.  I have had a strange issue take place with my scoring.

My FICO 8 and FICO 9 scores have remained exactly the same for several months now.  I completely expect this, as I have done all I can to rebuild and have kept exactly the same Util month after month, for more than a year (about $5 to $10 on one account).  I believe all I need is time to heal the old wounds to get any higher than I am.  

I pull my 3B reports each quarter.  When I pulled the 3B yesterday, as expected all FICO 8 and FICO 9 scores remained the same across the board, including Auto, Bankcard and Mortgage.  What I was shocked to see was that many of my older model FICO scores took a dip.  Examples below:

Exp Mortg Score 2 - 713 to 710

Exp Auto Score 2 - 719 to 709

Exp Bankcard Score 2 - 733 to 709

Exp Bankcard Score 3 - 721 to 713

TU Mortg Score 4 - 726 to 711

TU Auto Score 4 - 743 to 729

TU Bankcard Score 4 - 740 to 718

EQ is much the same - older versions of Mortg, Auto and Bankcard taking a 3 to 15 point dip.  Again FICO 8 and FICO 9, still the same.  

There are no changes to my report data that I see, other than AAoA being about 3 months longer.  

I am wondering it the following could be the issue.  I read a couple of months ago that FICO scoring disregards revolving accounts that have a CL of more than $50K.  My Discover CL is just over $60K.  This is also the one account that I allow $5 to $10 to show each month.  Is it possible that old scoring models do disregard accounts of a CL this high, therefore the $5 to $10 balance is also being disregarded, making it look like all revolving account balances are $0 (which we all know hurts scoring), whereas perhaps FICO 8 and FICO 9 do not disregard accounts over $50K?  

The scenario above is really all that I can think of as far as old models dropping and newer models not moving at all.  To our experts out there, could I be correct or would there have to be something else that I am not seeing that would cause this?  

Thank you!  

[Anonymous]

I think that is a great intuition.  It has been widely discussed that FICO may remove revolving lines that that have huge credit limits from utilization calculations.  The history behind this has in part to do with the fact that a HELOC (Home equity line of credit) is a revolving line of credit -- but they also typically have huge credit limits.  I think FICO found that by incliuding such high CL tradelines in the U calculation, it caused the U to be artificially low; and so they started dropping any revolving tradeline over a certain amount.  I don't think anyone knows exactly what that figure is.  40k perhaps? 

The odd thing about your situation is that, if I understand you right, your Discover card has had a 50k credit limit for a long time, and furthermore you have always had exactly one card showing a balance and it was always this Discover card..  If so then the 50k CL can't be the cause of a recent score change, since it has been this way for a while.

Nonetheless I think your intuition is sound that it might not be a good idea to have this huge CL card be the only card reporting a balance (for the reasons you cite)  If it is important to you to adopt an "All Zero Except One" (AZEO) approach, the one card showing a positive balance should NOT be:

(a) A charge card (it needs to be a true credit card)

(b) An AU card

(c) A card with a CL of 30k or higher

Is there a particular reason you insist on AZEO?  It's great for getting extra points right before a major credit need, but you certainly could let all your cards report naturally but still pay in full and you'd be fine as far as rebuilding credit.

[EW800]

Thank you very much for the great response, CredidtGuy.  Much appreciated.  

in regard to the AZEO issue, you absolutely got me there.  There really is no good reason, other than probably being a bit OCD through this whole credit rebuild.  You are absolutely correct, there is no real good reason to do it now, when I have no intention of applying for any significant credit in the foreseeable future.  

In regard to my Discover account, you may have a good point in regard to it already being at $50K+ on the prior pull, although the timing may be close.  I went from somewhere in the $47K range to about $53K about three months ago or so, then went to over $60K about two months after that.  I may do so checking to see if the over $50K had reported at the time of the previous 3B pull.  

Whether this is the issue or not, it does appear that *something* changed that the older models do not like, but the newer models seem to have no issue with.  I would just like to know what it is.  Perhaps this could be healthy knowledge for all of us.  

At a minimum, I am absolutely going to not have my Discover account be the only TL that shows a balance.  I am going to make it a smaller CL card, and may even let the others report small balances as well, since I won't be applying for anything soon.  

If anyone else has any idea, I would love to hear them, but with that said, I will be sure to report back here if having a balance show on another revolving account brings the old FICO models back up.  

Thanks so much!  

[Anonymous]

My apologies... Actually the fact that you went from 47k to 53k in the last few months could be important -- if the cutoff is (say) 50k for FICO dropping the big tradeline.  The problem is that I had always hear that FICO 8 dropped big tradelines too -- not simply the old models.  Also, the "dip" you describe doesn't seem to me pronounced enough to be explained by a model thinking that you went from one card reporting a balance to zero cards reporting a balance -- when that happens to people the drop is hugely big.  Your EX mortgage score dropped only 3 points, for example.

If you decide you really want to take a swing for science, it would be interesting to keep your profile at exactly one card reporting a $10 balance, but switch it as soon as possible to a smaller CL card (CL < 29k).  Then let us know what happens to your FICO 8 scores and (in a few months) to your 8, 9, and older flavors.    That would help confirm that a huge CL does get dropped and what its impact might be.

There is a chance that you moved to a different scorecard for those older models, possibly being triggered by your age of oldest account changing (or some other scorecard trigger). It sounds like you are recovering from derogs, so certain derogs becoming sufficiently far in the past might have caused a change.too.

You may never know what caused the change, but certainly switching to a different card (as part of your AZEO strategy) seems smart.  And if you are willing to really help us out here, switching to a smaller CL card but keeping all your other factors the same (e.g. still AZEO) would be really interesting.

Final thought:your scores are actually doing fine, given that you plan to apply for no more credit during the next few years.  A couple years from now your "old model" scores will be even higher.  Also, the mortgage industry will eventually be released from being locked in to only using those very old FICO models (an artifact of being beholden to Fannie Mae).  My guess is that will happen in 2018 (just a feeling on my part).  So in time it won't matter what those old model scores show.  FICO 8's and 9's (and possibly Vantage) will be what matters. 

[Thomas_Thumb]

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@EW800 wrote:

Hello All,  

I am hoping to get the input of some of our experts out there, if I may.  I have had a strange issue take place with my scoring.

My FICO 8 and FICO 9 scores have remained exactly the same for several months now.  I completely expect this, as I have done all I can to rebuild and have kept exactly the same Util month after month, for more than a year (about $5 to $10 on one account).  I believe all I need is time to heal the old wounds to get any higher than I am.  

I pull my 3B reports each quarter.  When I pulled the 3B yesterday, as expected all FICO 8 and FICO 9 scores remained the same across the board, including Auto, Bankcard and Mortgage.  What I was shocked to see was that many of my older model FICO scores took a dip.  Examples below:

Exp Mortg Score 2 - 713 to 710 [Fico 98 model]

Exp Auto Score 2 - 719 to 709 [Fico 98 model]

Exp Bankcard Score 2 - 733 to 709 [Fico 98 model]

Exp Bankcard Score 3 - 721 to 713 [Fico 04 model]

TU Mortg Score 4 - 726 to 711 [Fico 04 model]

TU Auto Score 4 - 743 to 729 [Fico 04 model]

TU Bankcard Score 4 - 740 to 718 [Fico 04 model]

EQ is much the same - older versions of Mortg, Auto and Bankcard taking a 3 to 15 point dip.  Again FICO 8 and FICO 9, still the same.  

There are no changes to my report data that I see, other than AAoA being about 3 months longer.  

I am wondering it the following could be the issue.  I read a couple of months ago that FICO scoring disregards revolving accounts that have a CL of more than $50K.  My Discover CL is just over $60K.  This is also the one account that I allow $5 to $10 to show each month.  Is it possible that old scoring models do disregard accounts of a CL this high, therefore the $5 to $10 balance is also being disregarded, making it look like all revolving account balances are $0 (which we all know hurts scoring), whereas perhaps FICO 8 and FICO 9 do not disregard accounts over $50K?  

The scenario above is really all that I can think of as far as old models dropping and newer models not moving at all.  To our experts out there, could I be correct or would there have to be something else that I am not seeing that would cause this?  

Thank you!  

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FYI - EX does not show a bankcard score 3; it is a classic score 3 - which is Fico 04 model. EQ score 5 and TU score 4 are also Fico 04 model.

Based on the info provided, there is really not enough data for me to offer a hypothesis on why older Fico models dropped your scores but the newer models did not.

Not sure how many cards you have and how many of those are personal credit cards vs charge cards or AU cards. I would suggest you report a balance on a couple non charge cards/non AU cards each month and vary which ones report month to month. That way you may be able to determine if score fluctuations are card related. As a test, you may also want to verify there is a difference reporting a balance on an over $50k card one month vs an under $35k card another month. [note: limit for inclusion in aggregate utilization used to be $35k].

You are being excessively restrictive in allowing balances to report. I maintain aggregate utilization under 6% and individual card utilization under 30% as a best practice. From a mortgage score perspective, I would advise limiting # non AU cards reporting to 3 (or 50%) - whichever is less. There really is no beneift in hiding spend from reporting to CRAs by pre-paying until aggregate utilization approaches 9%. Even then, if you are not looking for new credit, the temporary drop in score is inconsequential.

I would strongly suggest mixing thinks up (relative to utilization,, # cards reporting and which cards report balances) to see how your profile behaves. Unfortunately, evaluating impact on anything but Fico 08 typically costs additional money.