We’re Tom Quinn & Tommy Lee - FICO Score Experts! Ask us anything.

[Elizabeth_FICO]

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@Brian_Earl_Spilner wrote:

One of the misconceptions by new people here is outweighing the negative with the positive. They believe the more positive payment history they have, the more it will offset the negative effect of a late payment.

What I'm curious about is, why isn't on-time payment percentage calculated and included?

As others have mentioned up thread, FICO is all or nothing. Either your perfect, or you're mediocre, at best.

How is it someone can be penalized for around 80 or so points for being late 1 time out of 2000 payments? That's a 99.9995% positive payment history.

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Tommy Lee: The weight given to missed payments is based on historical data from millions of credit files, which indicates that those with missed payments are riskier than those who don’t have missed payments.

FICO Scores reward consumers who have a higher percentage of accounts with no delinquencies, more accounts currently paid as agreed, and those who have a longer credit history.  

[Elizabeth_FICO]

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@kberly69 wrote:

1. What's the logic behind a drop in score for paying off an installment loan? This seems like a milestone that should be rewarded, at least for a period of time. I get the whole credit mix thing but needing to have one with a balance seems crazy.

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Tom Quinn: The data shows that going from low installment loan utilization to no installment loan balances reported (and thus 0% installment loan utilization) is slightly more indicative of future risk.

So, when installment loan balances are paid off, it can result in a drop in score.

[Elizabeth_FICO]

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@Anonymous wrote:

What are the minimum requirements for obtaining a "thick file" classification?

Are closed accounts included?

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Tom Quinn: There is no single definition of “thick file” in the industry.  Lenders, scoring companies, the credit bureaus may define this differently.

[Elizabeth_FICO]

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@Anonymous wrote:

Is there a certain range of 'amount owed on revolving accounts' or 'amount owed on accounts' where balances affect utilization calculations more than the percentage?

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Tommy Lee: Generally speaking, revolving utilization tends to have more impact to the FICO Score than revolving balances, regardless of balance amount. 

[Elizabeth_FICO]

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@Anonymous wrote:

Do the FICO scoring algorithms always use truncated balances (e.g., 876.00 v 876.46) to calculate utilization?

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Tom Quinn: The credit bureaus supply balance information in whole number format. 

[Elizabeth_FICO]

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@coreysw12 wrote:

FICO has previous released some guidelines about what makes up our scores:

• 35% payment history
• 30% utilization
• 15% credit age
• 10% inquiries / new accounts
• 10% credit mix

My question is, are these fixed percentages? Or is it just a rough guideline that actually can vary? And if so, by how much can they vary?

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Tom Quinn: These percentages provide consumers with an estimation of how much each category contributes to the overall score calculation.  As referenced if myFICO Education, these percentages can vary for various sub-segments such as those with thin files.

[Elizabeth_FICO]

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@Rockysocks wrote:

Hello Mr. Quinn and Mr. Lee!! Thank you so very much for helping MF members!!

I have a (hopefully) easy question that I've definitely received mixed results with from the experts on this forum!

When a credit card is in good standing and being closed, does it make a difference whether the account was closed by the grantor or by the consumer?

I know there's no scoring impact, but many people here believe a lender may be slightly less likely to lend to a consumer if there are notes throughout the consumer's profile of credit card accounts always being closed by the grantor. Thanks!

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Tom Quinn: The FICO Score does not differentiate based on how a “closed” status is reported (closed, closed by consumer, closed by credit grantor) and does not consider a closed status as a negative item.

[Elizabeth_FICO]

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@coreysw12 wrote:

Dang, I thought of one more question. Sorry guys This is a rare opportunity to talk to some insiders, so I'm pretty excited for this opportunity and have been putting a lot of thought into questions I've had over the years!

This is in regards to Fico 10T (the one that factors in data trends).

Question is pretty simple - will balance/utilization trends still affect the score negatively even if the current balance/utilization is much lower than usual?

For example, see this scenario:

• March shows 25% utilization
• April shows 35% utilization
• May shows 50% utilization
• June shows 85% utilization

Because the trend is that the user is accumulating more debt, instead of paying it down, I would imagine that the scores would suffer from this trend data. That part makes sense.

But let's say in July, the utilization is 1%. Would the trend data from the prior months still be hurting the credit scores at that point, or would the new low utilization sort of "reset" the trend and substantially boost the scores?

I'm worried that even if I were to pay off my debt completely, just the fact that I had a few prior months where my balances were higher might take a LONG time to undo that damage. This is what I always liked about the "snapshot" data of prior FICO versions, the fact that it was easy to boost your scores just by paying down the debt before the next statement closing dates, after which it was like I never had the debt in the first place. I'm not sure if I'm a fan of that information continually hurting my scores for several years, but I'm hoping it's only pulling scores down if the current month's trend is worse than the prior months trends, and that it can be quickly rectified by simply paying down the debt.

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Tom Quinn: With FICO Score 10 T, the score will evaluate both the current balance and current utilization information being reported as well as historical balance and historical utilization information to generate the score.

[Elizabeth_FICO]

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@CAS2019 wrote:

Thank you so much for answering all the questions!

My question is, when does a young file cross over to an aged file?

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Tom Quinn: There is no single definition of “young vs mature file” in the industry.  Lenders, scoring companies, the credit bureaus may define this differently.

[Elizabeth_FICO]

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@pizza1 wrote:

Hello, and thank you! What a treat for us all

ok...here we go.

#1- Years ago, there was "talk" of a super sweet ratio point, for ultimate FICO scoring, and that was 1:1, 2:2, 3:3 etc, etc, etc.......basically, the amount of open revolving cards and open reporting installment loans were exactly the same. Any truth to that?

#2- What is the exact number of inquiries that FICO STOPS counting them into your current score? 12? 20? 80? skies the limit?

#3- If inquires quit "counting" into your score after1 year, and FICO doesn't "see" them anymore, then why do they need to stay on your reports for 2 years?

#4- Why am I penalized for not having a Mortgage?

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Tom Quinn: Inquiries stay on your credit bureau report for 2 years (the credit bureaus determine this) while FICO Scores only consider inquiries in the past year.

There is no single “max” number of inquiries where additional inquiries have no impact.  It differs across the multiple scorecards in the scoring system.

There is no characteristic in FICO Scores that penalize a user for not having a mortgage loan.