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Significant top end buffer increase?

BrutalBodyShots
Super Contributor

Significant top end buffer increase?

Alright guys, odd one here that I can't explain.  See the image below.  On TU at the time the 850 score was generated through my Synchrony (Lowe's) account earlier this month, as you can see from the negative reason statements I had $0 balances across all revolvers.  As a result, I'm extremely surprised by the 850 score.  The last time I had all zero reported balances on revolvers was in September, where I saw a TU FICO8 score drop from 850 to 834.  Losing those 16 points (maybe a few more with buffer?) is pretty standard and what I've come to expect for that penalty.  So, if I'm able to now possess an 850 score with no current non-zero revolving balances reported, wouldn't that suggest that something significant changed on my profile between last September and now that dramatically increased my top-end buffer?  Anyone venture to guess what this could possibly be?  I can't think of anything, but some questions from you guys may lead me to consider things I otherwise wouldn't. 

 

Age of accounts factors just to be clear on TU currently are 20 months AoYA, 8 years 2 months AAoA, 17 years 10 months AoOA.  If you deduct 4 months from each of those values above, you'd have those age of accounts factors in September when I saw the 16 point drop in going from AZEO to AZ on TU.  Scoreable inquiries on TU are 0 both before/after.  One open installment loan (mortage) has been a constant, installment utilization there is in the lower 70's percentage wise both before/after.  I'm not really sure what else to look into here.

 

zero balances.jpg

Message 1 of 25
24 REPLIES 24
SouthJamaica
Super Contributor

Re: Significant top end buffer increase?


@BrutalBodyShots wrote:

Alright guys, odd one here that I can't explain.  See the image below.  On TU at the time the 850 score was generated through my Synchrony (Lowe's) account earlier this month, as you can see from the negative reason statements I had $0 balances across all revolvers.  As a result, I'm extremely surprised by the 850 score.  The last time I had all zero reported balances on revolvers was in September, where I saw a TU FICO8 score drop from 850 to 834.  Losing those 16 points (maybe a few more with buffer?) is pretty standard and what I've come to expect for that penalty.  So, if I'm able to now possess an 850 score with no current non-zero revolving balances reported, wouldn't that suggest that something significant changed on my profile between last September and now that dramatically increased my top-end buffer?  Anyone venture to guess what this could possibly be?  I can't think of anything, but some questions from you guys may lead me to consider things I otherwise wouldn't. 

 

Age of accounts factors just to be clear on TU currently are 20 months AoYA, 8 years 2 months AAoA, 17 years 10 months AoOA.  If you deduct 4 months from each of those values above, you'd have those age of accounts factors in September when I saw the 16 point drop in going from AZEO to AZ on TU.  Scoreable inquiries on TU are 0 both before/after.  One open installment loan (mortage) has been a constant, installment utilization there is in the lower 70's percentage wise both before/after.  I'm not really sure what else to look into here.

 

zero balances.jpg


It just seems to me that the passage of 4 months, or 2018 turning into 2019, or both, simply seasoned your profile more.


Total revolving limits 677500 (584500 reporting) FICO 8: EQ 745 TU 750 EX 749

Message 2 of 25
BrutalBodyShots
Super Contributor

Re: Significant top end buffer increase?

So you're take then is that it's somehow related to my age of accounts factors?  If that's the case, which one, or a combination of them?  I always believed the biggest age of accounts factor in terms of FICO 8 points was the crossing of 12 months AoYA, a threshold usually good for 15-20 points.  It seems here I picked up 15-20 points.  I would think if a threshold existed somewhere on one of the age of accounts points that I crossed that it would have been documented at this point.  You never know, I suppose.  It's also very possible that I was at AZ at some point between September and now during the last 4 months, but that I simply didn't pull my scores at that exact moment in time to see where my scores stood.

Message 3 of 25
SouthJamaica
Super Contributor

Re: Significant top end buffer increase?


@BrutalBodyShots wrote:

So you're take then is that it's somehow related to my age of accounts factors?  If that's the case, which one, or a combination of them?  I always believed the biggest age of accounts factor in terms of FICO 8 points was the crossing of 12 months AoYA, a threshold usually good for 15-20 points.  It seems here I picked up 15-20 points.  I would think if a threshold existed somewhere on one of the age of accounts points that I crossed that it would have been documented at this point.  You never know, I suppose.  It's also very possible that I was at AZ at some point between September and now during the last 4 months, but that I simply didn't pull my scores at that exact moment in time to see where my scores stood.


I would just be guessing as to which one. It might be a combination of more than one. If I were to guess I'd pick crossing the 8 year barrier in AAoA. To me that looks like the most likely suspect.


Total revolving limits 677500 (584500 reporting) FICO 8: EQ 745 TU 750 EX 749

Message 4 of 25
BrutalBodyShots
Super Contributor

Re: Significant top end buffer increase?

Could be.  My question would then turn to those that have crossed 8 years on AAoA and ask if they experienced any score gain at or around that point?

 

While my thinking could be wrong on this, I'd expect score gains related to AAoA (or any age of accounts factor, really) to diminish as time passes.  What I mean is that an AAoA crossing 1 year I would think means more (score wise) than 3 years, 5 years, 8 years, etc.  That being said, on my profile crossing 6.5 years AAoA was good for 4 points.  I would think then that a threshold at a point beyond (older) than 6.5 years would yield less points.  Just thinking out loud here, as I could definitely be wrong.

Message 5 of 25
CreditGuyInDixie
Super Contributor

Re: Significant top end buffer increase?

What is the current age of your mortgage?  Thomas Thumb has conjectured that loans (especially mortgages) are treated differently as they age, even when installment utilization remains constant.

 

Aside from that, my bias is the same as SouthJ's, which is AAoA crossing from < 8.0 years to being > 8.0.

 

BTW, the fact that so much of the various models are influenced by whole numbers (and powers of ten, e.g. utilization) shows the bias of the human developers of the scoring models, independent of what the true risk measures are.  There is no reason to believe (for example) that statistically there would be important risk shifts at utilizations of 10%, 30%, 50%, 70%, and 90%.  Those numbers are an accidental by-product of the fact that the developers use a base-ten system of measurement.

 

Similarly, if there are significant changes built into the models for AAoA or AoOA connected with whole numbers of years (2 years, 4 years, etc.) that can't be because statisticians just happened to find important risk shifts at those numbers -- almost by magic.  It's an artifact of the highly arbitrary way we measure time (where months are grouped in sets of 12 in these things called years).  A year has an analogue in the natural world (planet circling the sun) but it is improbable that credit risk has anything to do with that.  

 

Interesting thread, BBS!

Message 6 of 25
BrutalBodyShots
Super Contributor

Re: Significant top end buffer increase?

The mortgage is 9 years and 3 months old currently, although it hasn't yet reported this month or last for some reason, so on my TU CR we're looking at 9 years 1 month.  In terms of a whole number, 9 years flat was reached in October, meaning in September I was at 8 years 11 months.  I guess that could point to a threshold at 9 years, although using the base-ten argument one would think 10 years would be the more likely threshold point when humans were coming up with this stuff.

 

I've sort of seen the converse to whole numbers with respect to AAoA thresholds, having seen them at 6.5 years and 7.5 years, but not 6 years or 7 years.  We're only talking a few (3-4 points) here, but able to be seen with fairly strong certainty.  That doesn't completely rule out the 8 year mark, but the chances IMO of that point impacting score 15-20 points seems quite small.

Message 7 of 25
Thomas_Thumb
Senior Contributor

Re: Significant top end buffer increase?

The unit of aging is in months for all models as far as I know. Fico appears to look at 6 month or 12 month increments but, I'm not 100% sold on that. Fico looks at AAoA for open mortgages only and open+closed combined but, not all CRAs look at both metrics. The installment age metric appears to look at age of oldest as well based on reason code statements.

Experian reason codes 2.jpg

 

Not sure what BBS has for a balance to loan ratio on his mortgage and whether or not it may have crossed an undocumented threshold. 

 

With respect to aggregate rwevolving utilization VantageScore may use a linear formula (not withstanding the anomaly around 5%) as opposed to discrete step change discontinuities. At least that is clear from OFAT simulations using my profile.

 

A couple years back I received a "no recent revolving activity" demerit without a drop from 850 on classic Fico 8 as well. There was an impact on Fico 8 industry option versions and Fico 04 versions. Best I can tell comparing no change in Classic Fico 8 to various changes in industry option Fico 8 counterparts, Classic Fico 8 certainly has a 20 to 25 point buffer. Perhaps the buffer could be as high as 30 points for someone with an "ideal" file.

Fico 9: .......EQ 850 TU 850 EX 850
Fico 8: .......EQ 850 TU 850 EX 850
Fico 4 .....:. EQ 809 TU 823 EX 830 EX Fico 98: 842
Fico 8 BC:. EQ 892 TU 900 EX 900
Fico 8 AU:. EQ 887 TU 897 EX 899
Fico 4 BC:. EQ 826 TU 858, EX Fico 98 BC: 870
Fico 4 AU:. EQ 831 TU 872, EX Fico 98 AU: 861
VS 3.0:...... EQ 835 TU 835 EX 835
CBIS: ........EQ LN Auto 940 EQ LN Home 870 TU Auto 902 TU Home 950
Message 8 of 25
BrutalBodyShots
Super Contributor

Re: Significant top end buffer increase?

Mortgage utilization currently is at 75.6%, so a few months ago it was at 76.x%; I wouldn't think that 76% is a threshold point here, but you never know. 

 

Aside from that, I do have a closed mortgage on my CR as well, which was my original loan before the refinance to the one I have now.  That one is at 14 years 2 months in age, closed in late 2009... so I'd expect it to drop off my CR late this year around the 10 year mark.  I'm not sure if that closed account is impacting my profile at all with respect to installment/mortgage loans outside of AAoA.

 

As a spinoff question to the idea posed that mortgages are treated differently than other installement loan types possible due to a length of time factor, what about other loans types (like student loans) that can be for similar [high] dollar amounts like mortgages and similar [long] durations of over a decade? 

Message 9 of 25
Anonymous
Not applicable

Re: Significant top end buffer increase?

Is it possible there’s an 18 month AoYA threshold? The longer you go without adding a new account, the more stable your financial picture looks so it would make sense for there to be further thresholds. That’s the only thing that sticks out at me as a potential differentiator and I went and did a search and stumbled on your highest AoYA scoring thread and there was never a definite answer of what happens after a year. 

Message 10 of 25
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