@CH-7-Mission-Accomplished wrote:I have been wondering about this for a while.
How does the FICO software actually interact with the data in your respective credit files? Is the software housed on FICO's servers and somehow they access the data in the CRA files, or do the CRA's rent/lease/buy a current version of the scoring software and house it on their own computers? I understand FICO earns money each time their software is used and that's why it costs more than the FAKO scores usually given away for free.
This has been perplexing me. I like to know how things work mechanically.
FICO scores are generated by CRAs in their facilities. FICO provides the algorithm but it is customized for the data in each CRA. It's entirely possible, and perhaps even likely that FICO does not know the exact algorithm after it has been customized. It is highly valuable IP so it is probably implimneted as a "black box" where CRA data goes in and a score together with the so called "negative factors" gets spit out.. FICO gets a royalty on each score generated that is used commercially.
@flan wrote:
@tufa4311 wrote:
@flan wrote:
@tufa4311 wrote:
@cashnocredit wrote:FICO scores are generated by CRAs in their facilities. FICO provides the algorithm but it is customized for the data in each CRA. It's entirely possible, and perhaps even likely that FICO does not know the exact algorithm after it has been customized. It is highly valuable IP so it is probably implimneted as a "black box" where CRA data goes in and a score together with the so called "negative factors" gets spit out.. FICO gets a royalty on each score generated that is used commercially.Are you sure about this? What I hear you saying here is that the FICO algorithm is changed by the CRA - that doesn't sound correct. The FICO algorithm is just that, the FICO algorithm, I don't think that the formula is changed by the CRA. As I understand it, the only thing the CRA provides is your credit report, the actual data - the FICO formula then takes all the data in the credit report the CRA has and comes out with a FICO score. The CRA's do have their own proprietary formula they use that also comes up with a credit score based on the information they have in your file but, of course, it is not a FICO score.
Can others comment?
The pre-fico 8 scores are all differnet for each CRA. I do not know if it's FICO or the CRAs who do the customization, or some combination. There is not a huge difference in the scores between the CRAs but it does exist, and the ranges are all different. The differences appear to be largely how different negative factors affect the scores, and how many score cards ("buckets" around here) the scores use. The newer scores are supposed to be more the same from bureau to bureau.
One of the claimed advantages of the VantageScores is that the CRAs all use exactly the same algorithm, so that if the data is the same in each, the scores will be the same, which is very much not the case with FICOs. That makes using an average or mid score or merged report score much more useful for creditors.
Thanks for the input, however, I'm still not convinced. As I underdstand it, and I may be wrong, if my EQ/EX/TU credit reports were exactly the same to the data point, they would all produce the same FICO score (per FICO version of course).
If I am worng there is a whole other aspect to scoring that I'll need to get schooled in.
Anyone else?
Score ranges of the various FICO 04 scores (still used for mortage lending):
Transunion
Classic 04
309-839
Experian
Fair Isaac V2
320-844
Equifax
BEACON 5
334-818
Thx for the extra info, I'm afraid it's just too late to start cranking up the thought processing required to understand this aspect of scoring tonight, so I'll have to put this one off until the weekend...and I thought I knew it all 
This has me up late at night. I can work on it for hours & think I'm close but things can change on a dime. I do believe it is fico's algorithm and others will pay to use it. But if you take 2 twins with the same cards, balances, etc, using the same habit's/patterns, for example, they will still spit out a different score. They're giving us just the basics of what goes into their system. I'm sure they add a few spices we don't know about. How many ppl can figure out code? Shouldn't be as hard as we imagine? I can be over thinking it. But everytime I think I'm close, it's just not so. 
Give it a try and see what you come up with. Nice to know someone else is thinking the same thing!