What goes into "seeking credit" reason code?

[Anonymous]

What’s really insane is how would you not have a seeking credit negative reason code with many inquiries? I just don’t see how that’s possible! there’s gotta be a glitch in the mainframe here somewhere! Flies in the Vaseline!

[SouthJamaica]

I know this is ridiculous, but in combing through my report data, desparately seeking something related to aging and "seeking new credit" which would have occurred on the 20th of the month, I did detect one possibility, which is probably way too far fetched, but I will throw it out there so as not to carry the burden alone:

On the 20th, the number of scorable inquiries during the past 6 months dropped from 11 to 10.  What if there were in the FICO 8 algorithm a penalty called more-than-10-inquiries-in-the-past-6-months, and dropping from 11 to 10 removed the penalty?

[Anonymous]

SJ If the number of scoreable inquiries dropped, then, imho, that’s definitely it (that’s what the code is for inquiries).

Because it caused it to have less weighting, you should still have the code, it should’ve just moved down, so there should be one to replace it, that’s what really is bugging me and Cassie had a really odd output not long ago from Experian as well that’s impossible. I really think they’re having some errors.

[SouthJamaica]

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@Anonymous wrote:
SJ If the number of scoreable inquiries dropped, then, imho, that’s definitely it (that’s what the code is for inquiries).

Because it caused it to have less weighting, you should still have the code, it should’ve just moved down, so there should be one to replace it, that’s what really is bugging me and Cassie had a really odd output not long ago from Experian as well that’s impossible. I really think they’re having some errors.

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The number of scorable inquiries has not dropped. That's the first thing I looked for. The only thing that dropped is the number of scorable inquiries during the past 6 months.

[Anonymous]

Oh....

[Anonymous]

You got me on this one SJ. I can’t even come up with a theory then. that’s extremely strange. the only thing I can say is it appears they’ve been having some weird output lately. Like I said, Cassie has some output that seems impossible.

@Thomas_Thumb ?
@Revelate ?

[Anonymous]

Is there possibly a penalty that we're unaware of related to number of scoreable inquiries (10+) within the last 6 months?  It wouldn't be unreasonable to me that the algorithm could see 11+ in the most recent 6 months as being slightly more risky than 10 or less.  Perhaps such a penalty is extremely minor, say a couple of points.  If that's indeed the case, the minor penalty could easily be overlooked when the value of those 10 inquiries no doubt far exceeds it and a couple of points could be easily tied to another factor like aging or something else.  I think the sample size of people with 10+ inquiries in the last 6 months is relatively small and of those people the amount that are checking their report/score daily like SJ is next to none (maybe actually 1, that is SJ).

[Anonymous]

I login everyday to pull my Experian. And I think we’ve got a lot of people around here that have a lot of inquiries < 6 months. I can’t say whether or not those people check their report daily though.

It’s a theory, could be. I just don’t understand why the codes not still there, considering he has inquiries; all it takes is 1 to get that code.

[AndySoCal]

@Anonymous 

@Anonymous 

The seeking credit does not have anything to do with consumers pulling their own credit report. The comment has to do with consumers having a lender pull their credit report for a credit card, auto loan etc.  The basic premise lenders use is a consumer will apply for only the credi they need. So when a lender sees numerous inquires the question that might come to mind is why?

[Anonymous]

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@SouthJamaica wrote:

I know this is ridiculous, but in combing through my report data, desparately seeking something related to aging and "seeking new credit" which would have occurred on the 20th of the month, I did detect one possibility, which is probably way too far fetched, but I will throw it out there so as not to carry the burden alone:

On the 20th, the number of scorable inquiries during the past 6 months dropped from 11 to 10.  What if there were in the FICO 8 algorithm a penalty called more-than-10-inquiries-in-the-past-6-months, and dropping from 11 to 10 removed the penalty?

It's not far fetched at all. There's too much evidence to support it.

Experian Reason Code 8: Too many inquiries last 12 months

Explanatory text: "Your FICO® Score will consider recent inquiries less as time passes, provided no new inquiries are added."

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From FICO in their Frequently Asked Questions About FICO Scores PDF: (Page 3 in PDF / Goto Page 7 in PDF viewer)

4. New Credit - Approximately 10% of a FICO® Score is based on this information:

In this category, a FICO® Score takes into account:

•How many new accounts have been opened.

•How long it has been since a new account was opened.

•How many recent requests for credit have been made, as indicated by inquiries to the consumer reporting agencies.

•Length of time since inquiries from credit applications were made by lenders.

•Whether there is a good recent credit history, following any past payment problems.

I've frequently seen reference to 3 months and 6 months in various FICO documents, though not directly related to inquiries. There's something important about those values.

Tom Quinn (and others from FICO) frequently talk about a 'lessening effect' or a 'sliding scale' for many penalties. He always discounts notions of 'thresholds', especially for utilization. (Listen to the way he explains it in an interview here.)