What the score "upgrade" means to you

[abundancejones]

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@ficonightmare wrote:

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@abundancejones wrote:

So...FICO08 is punishing those with legit AU accounts? 

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What kind of "legit" accounts?

It's not punishing mine. But I also have a history on the cards I'm an AU on. For instance, same name and address at one point. 

If you're an AU on card that belongs to someone other than your spouse or family member, it may not include them if it can't verify you're a legitimate AU. We've seen it here.

But I wouldn't worry about that, according to a thread that was started last week, this summer, no AU's will be calculated at all. 

Here's the thread http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Authorized-User-Accounts/td-p/3129074

Who knows if it will really go through, but I'll be checking my reports next month to see if anythng's changed. 

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A family member is legit..and several posters have mentioned it not counting..even when addresses match. 

FICO9 wont be released unti this summer...but it will take several years befor it becomes the standard score that lenders use. 

[Ubuntu]

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@Anonymous-own-fico wrote:

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@Ubuntu wrote:

I have a clean but sparse history.  For a long time the only accounts I had listed were both perfectly maintained AU accounts. In July of 2013 I applied for a card in my name and then another in October.  I can see from the free EQ report that MyFICO gave me today that my AAoA dropped from 6 years to 9 months.  It looks like AU accounts are of no use in FICO 08. Good thing I started when I did or the drop would've been even bigger.

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Oh, I don't think all that Understanding Your FICO Score etc stuff is organically generated with the score from the core process. It's more like an independent add-on layer, second-hand guesswork if you ask me. Which brings up the question of how can you really tell whether AU accounts are used in calculating your score?

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In my second post in this thread, linked below, I gave the full details of how my various scoring components changed after EQ switched from showing us FICO 04 to FICO 08. Paragraphs 3 through 6 have most of the important information. I'm still SMH at them calling this change an "upgrade" instead of something more accurate but that's marketing for you.

http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/What-the-score-quot-upgrade-quot-means-to-you/m-p/3136436/highlight/true#M80258

(note: that link will make some quoted text appear at the top of your screen, scroll down a little to see my actual comment.)

There is clear evidence that my two AU accounts were factored out of my AAoA, UTIL, and "Length of Credit History".

My situation if perfect for doing calculation because I only have 4 accounts, 2 older AU accounts and 2 new primary accounts. The AAoA, UTIL, and history length in FICO 04 were exact based on all 4 accounts. The FICO 08 numbers were exact based on just the 2 accounts in my name.

 * Edited to make my point more clear.

[vanillabean]

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@Ubuntu wrote:

There is clear evidence that my two AU accounts were factored out of my AAoA, UTIL, and "Length of Credit History".

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What if all of this is per Understanding Your Score only, not per the score itself?

The latter may have changed for reasons other than the former.

[cem13]

Well as a Statistics major; I disagree.  The unit of measure difference with the mass analogy is a false representation because EVERYONE has a direct corelation from pounds to kilograms.  If the new score reacted in the same manner then EVERYONE would have the same movement.  In reality, some people's FICO went down and some people's FICO went up.  This certainly shows a "drop" or "gain" compared to each other.

For example, two people have an exact score of 750 with the '04 model.  Let's say for the sake of argument that this is exactly 90%-ile.  Now with the '08 model, the new scores are 720 and 765.  This would be a 65%-ile versus a 94%-ile.  How can anyone argue that this is "the same".  We are compared to each other and everyone else that has a file with the CRAs.  So a drop in score compared to a rise in score increases (or decreases) the credit-worthiness.

It is not logical to believe that the old scores and the new scores are the same.  They are not.  FICO has a new algorithm (not new but new to us).  So obviously they have put more weight on certain criteria and less on others.  So by this fact, the  '04 and '08 scores ARE NOT THE SAME.  If they were the same, why would FICO spend millions of dollars to re-write the algorithm?  This just does not make sense.

So the new scoring IS DIFFERENT, if your score dropped (like mine): you suck.  If  your score went up: you rock.  Now we have to decipher what FICO believes is important and maximize this.

[cem13]

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 From the FICO website:

"It is possible for a greater score change to occur, but this type of movement simply means the updated model is doing a better job of identifying those people who are lower credit risks from those who are higher credit risks."

So FICO believes that the factors regarding credit risks have changed.  I am confident that they know what they are doing.  They employ the best Acuaries and Statisticians in the business. 

So if your score dropped, then you are deemed to be less credit worthy.  So the mass analogy is false.

[HiLine]

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@cem13 wrote:

So the new scoring IS DIFFERENT, if your score dropped (like mine): you suck.  If  your score went up: you rock.  Now we have to decipher what FICO believes is important and maximize this.

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Not sure I follow. The two points you brought up in one sentence contradict each other. If the new scoring is different (which it is), comparing the "old" score to the "new" score is pointless. 

[cem13]

That is my point.  In several previous posts, the OP tried to say that one's credit worthiness did not change eventhough the FICO score dropped.   He used mass unit of measure Kg and Lbs as an example.

The new scoring system is what it is: a new system.  So scores go up and scores go down.  The key is to maximize the new scoring system to get the highest score possible.

[Revelate]

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@cem13 wrote:

That is my point.  In several previous posts, the OP tried to say that one's credit worthiness did not change eventhough the FICO score dropped.   He used mass unit of measure Kg and Lbs as an example.

The new scoring system is what it is: a new system.  So scores go up and scores go down.  The key is to maximize the new scoring system to get the highest score possible.

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I agree with your point entirely; however, I think the original poster perhaps stated it imprecisely - your creditworthiness did not change at all, because there is no score that we receive (other than the known conventional mortgage ones) where we can accurately predict which score a lender will pull.

Lenders, especially credit card issuers have been pulling FICO 8 for a non-trivial amount of time, and as such whether we're getting FICO '04 or FICO 8 on Scorewatch and individual EQ pulls here, really is irrelevant to our creditworthiness from the only perspective that matters: the lender we want something from.

Anyway while I still hate the upgrade personally speaking as a member of the forums, the one thing positive it has done is encouraged a bunch of different conversations and more research into the algorithm via testing, and I think that's a long-term win for the community.

[cem13]

Well I disagree with your assessment that the credit worthiness did not change.  Then why the need for a new formula?  Why do some scores drop and some increase?  the new model measures a different way.  Now I will agree that unless we know what model the lenders will use, the scores are meaningless.

I will agree with your point that this is another algorithm to test.  As a student of statistics, I love a good model to test.  I am just geeky like that.  If we all band together, we will "figure this out" in no time.

It does seem that AU is the biggest hit.  For me it was the number of open accounts that reported balances.  I also like the new formula ignoring collections under $100.  I wish it was $500 but we take what we can get.

[Revelate]

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@cem13 wrote:

Well I disagree with your assessment that the credit worthiness did not change.  Then why the need for a new formula?  Why do some scores drop and some increase?  the new model measures a different way.  Now I will agree that unless we know what model the lenders will use, the scores are meaningless.

I will agree with your point that this is another algorithm to test.  As a student of statistics, I love a good model to test.  I am just geeky like that.  If we all band together, we will "figure this out" in no time.

It does seem that AU is the biggest hit.  For me it was the number of open accounts that reported balances.  I also like the new formula ignoring collections under $100.  I wish it was $500 but we take what we can get.

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Think we're disagreeing on semantics: individual lenders have found that score A provides the best analysis on their historical customer data than score B (or they pull both for a while and then watch the future data or even do both as macroeconomic issues affect most lenders too), but whether A happens to be FICO '04 or FICO 8, or one of their myriad of industry options, is dependent on the lender, their customers, and their customer data.

FICO bills FICO 8 as a better predictor of default within 24 months, but that's not always the case for a lot of customers (the lenders).  As such I'm of the opinion that Scorewatch and any other FICO Score service is simply a benchmark: it's not the absolute value of the score which is important, it's the trend as generally most (if not all) FICO algorithms will trend upwards on the same things, just with different speeds due to their relative weighting of any individual measure.

In addition to what you've found, FICO 8 has been obliterating people who don't have revolving tradelines to the tune of 50 points for mixed files even compared to FICO '04... and that's a lot for someone with a report anyway like mine.  

Anyway, end of the day it's the report data that matters, especially as a FICO Score, no matter how important, is only one gate in the slalom course that is lender underwriting.  Generally speaking putting enough lipstick on the report, will produce a kissable score, regardless of algorithm selected.  That's why I take great care in building my report, but don't worrry about the scores: they'll be where they need to be eventully, just it's a long slog for me with my derogatories that aren't coming off.  Most of my testing is just because I'm a geek who's interested in such things.

I'd even settle for a $250 exclusion on collections .