SCORING INCREASE

[tmoney]

Greetings All,

       How much of an increase in score if UTI drops from 60% to less than 10 after

 paying off chargeoff balance. I think balance was cause for high UTI.  3 other co

all from 2003   Anyone

                                     Thanks

[Anonymous]

12 to 15 points per 10% of utl.

Yes- CO's count in ULT calculations.

[Anonymous]

Charge off balances are taken into consideration when calculating utilization?

[RobertEG]

The actual relationship between % util and FICO points deducted is a trade secret, but it must be mathematical.  Thus, one must assume what mathematical relationship best matches experience by consumers to attempt to duplicate, and thus project, the relationship.  The upper and lower point limits for revolving %util must first be assumed, and then the mathematical relationship between the two must be assumed.  

Here are my model assumptions with the related points, for your consideration and comments.

I first assumed that of the 30% total assigned by FICO to the total %util category, 25% is revolving %util, and 5% is installment %util, the two together making for the total of 30% for this category.  This is only my assumption, but it seems to work.  However, the math can be done for any other assumption.  From this, the match flows.  25% of 850 total FICO equals a total of 212.5 points for this factor.

Next, the formula between min. util of 0% and max util of 100%.  I have plotted two equations between these limits.  One is linear (straight line) assumption, and the other is exponential (parabolic) assumption, with points varying as a function of the square of %util at each level.. Exponential seems to better project experience. Here are the mathematical values for each:

  %Util                         Exponential       Linear

10%                                  -2.1                 -21.3

20%                                 -8.5                 -42.6

40%                                -34.0                -85.2

60%                               -76.5               -127

80%                              -136.0              -170

100%                           -212.5               -212.5

Message Edited by RobertEG on 01-30-2008 08:20 PM

Message Edited by RobertEG on 01-30-2008 08:21 PM

[Junejer]

Geez RobertEG, thanks for clearing that up. One question though. Are there 850 points or 550 points, seeing as how the scoring starts at 300.

[RobertEG]

Total FICO is 850.  If FairIsaac % ranking posts can be relied upon, then the 300 is not the starting point, it is the summation of all categories, and as low as they will report even if all categories are a desaster!.  I assume that one can not lose more than the posted point maximums for each category, which in the case of %util, is 30%.  But anyone with a 300 FICO would probably not even know, or care, how to get into this forum, so I think it is kinda academic!

FICO category max points:

Payment history     298 points max

%Util (all)                255

Lenght credit          127

New credit               85

Type credit              85

TOTAL:                 850

All I can assume is that you either hit the max in each category, or you get dinged.  That is all that FairBrother Isaac has told us about his secret model, and all that we can go upon with grace or rationality in our world of myFICOconfusion.  I do not offers numbers as those of FairRobert, for I have yet to be ordained!  .... just some sort of math logic to interpret the Ouiji Board of credit scoring algorithms!

[Anonymous]

RobertEG, I love reading your analysis of things every time. But one thing happens to me. When ever I do, I have vivid flashbacks of my descriptive geometry class from TCU. Was a nightmare for me.

I'll bet the TV show NUMB3R's is your favorite show! LOL.

Seriously, I DO appreciate you.

[RobertEG]

Sylvia, I am a dangerous nerd mix of an engineer and a lawyer, so my black horn-rimmed glasses 'oft cloud reality!  FICO is an algorithm.  I thus attempt to approach it from math rather than perceived fairness!  FICO is a number, and requires math to understand it.  Sorry!  LOL!

[Anonymous]

NO. No sorry dear. Your explanations are most plausible, well worded and explained in detail. For those very interested on the inner workings of FICO, it explains a lot of things.

[fishbjc]

Payment history     298 points max

%Util (all)                255

Lenght credit          127

New credit               85

Type credit              85

TOTAL:                 850

Thanks for laying that out, it does make sense.  So in order to really raise my score, I'm working on utilization, getting that from 80% to 40%, should make a nice difference.  It's the only aspect I can control right now for a quick rise.

The Payment history will come in time.  Is it ACTUALLY possible for ANYONE to receive an 850?  Just wondering, I heard Donald Trumps is low 800's. lol!  Bill Gates anyone?