Which lenders actually use the FICO scoring model?

[Itsmeagain]

First, my rant . . .

Does any lender actually use the FICO scoring model that is used at myfico.com to provide my score?

When applying for new credit, I always pull my FICO score from here on the day I apply (Experian excepted of course).  I was recently disappointed (again), to discover that a lender (Alliant CU), did not use the FICO scoring model used here to calculate your score (the difference was a whopping -50 points).  

This is not an isolated event.  Within the last three years I have applied 18 times for revolving and installment credit (forget the mortgage and vehicle loans).  In every instance, the model used by the lender reflected a lower score than that provided by myfico.com.  This, of course, was reflected in higher interest rates and lower limits.

Now, my friendly, helpful, respectful suggestion.

Would you (the valued members), post the prime lenders such as Discover, BoA, Chase and a few CU's such as PenFed, Addison, NFCU, etc. and what scoring model they actually use?  It would be extremely helpful to know beforehand which scoring model was used in order to guesstimate what score they would be looking at when one applies.

Thanks for a great forum.  Without you I would still be wallowing in ignorance.

IMA

[Jazzzy]

I understand your rant. It is very frustrating. When you talk about the scoring model that is used at myfico.com, are you referring to EQ or TU? myFICO provides both.

Which CRA did Alliant hard pull?

With all due respect, I don't think any of us can post which lender uses which scoring model. We know that most of them use one or the other versions of various FICO scores...and not the other "credit scores" sold by vendors. That said, creditors each pull one or more credit reports, and some lenders/credit card companies have their own scoring models. As far as TU goes, the version available to consumers is TU98. I know that many mortgage lenders use TU04, which is not available to consumers.

It would be great to have an exact list of who pulls what and which score they use. In the fall, for example, I apped Discover. By the time they were done, they pulled all 3 for me. I got the card, but how can I ever know which FICO they used? It's just not possible to know.

Message Edited by LynetteM on 02-01-2010 06:25 AM

[Itsmeagain]

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@LynetteM wrote:

I understand your rant. It is very frustrating. When you talk about the scoring model that is used at myfico.com, are you referring to EQ or TU? myFICO provides both. 

Not sure what you mean, "myFICO provides both".

Which CRA did Alliant hard pull?  Alliant pulled EQ.

With all due respect, I don't think any of us can post which lender uses which scoring model. We know that most of them use one or the other versions of various FICO scores...and not the other "credit scores" sold by vendors. That said, creditors each pull one or more credit reports, and some lenders/credit card companies have their own scoring models. As far as TU goes, the version available to consumers is TU98. I know that many mortgage lenders use TU04, which is not available to consumers.

It would be great to have an exact list of who pulls what and which score they use. In the fall, for example, I apped Discover. By the time they were done, they pulled all 3 for me. I got the card, but how can I ever know which FICO they used? It's just not possible to know.

Message Edited by LynetteM on 02-01-2010 06:25 AM

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Yes, I think you have captured the essence of my frustration.  

If lenders do not use the FICO model we are allowed to access here, what is the value to the consumer when the model that is actually used for lending decisions reduces that score by up to 50 points?

[cdtotten]

What's strange is that alliant typically pulls EQ, but if you are apping for a loan then they most likely pulled all 3. Could you be more specific what type of loan you were taking out and what bureau they pulled. Was it an auto-loan?

The biggest difference comes between TU98 and TU04. This site (and transunioncs.com) sells TU98, when some lenders do pull 04. For some, it is higher, for others it is lower. It is not always lower for the consumer. I am not sure why the TU04 score is not available to consumers to purchase, but I can understand it is very difficult to offer every variation of a score. Some lenders, such as Kohls store card, use Vantage. AMEX has their own internal algorithm to determine your worthiness.  It's a mess, but it is reality. The key is making sure that your reports are clean and then you have nothing to worry about. Late payments and derogatory accounts are what cause big gaps in scores across different algorithms.

[Itsmeagain]

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@cdtotten wrote:

What's strange is that alliant typically pulls EQ, but if you are apping for a loan then they most likely pulled all 3. Could you be more specific what type of loan you were taking out and what bureau they pulled. Was it an auto-loan?

The biggest difference comes between TU98 and TU04. This site (and transunioncs.com) sells TU98, when some lenders do pull 04. For some, it is higher, for others it is lower. It is not always lower for the consumer. I am not sure why the TU04 score is not available to consumers to purchase, but I can understand it is very difficult to offer every variation of a score. Some lenders, such as Kohls store card, use Vantage. AMEX has their own internal algorithm to determine your worthiness.  It's a mess, but it is reality. The key is making sure that your reports are clean and then you have nothing to worry about. Late payments and derogatory accounts are what cause big gaps in scores across different algorithms.

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First, I would like to thank both LynetteM and cdtotten for your replies to this controversial topic.  I would also like to thank the mods and admins for allowing it to continue.

cttotten, I'll try to be more specific about Alliant.  I have and had several of their credit products.  For each application they pulled Equifax ONLY.  Since each of these products were opened more than 30 days apart, I have 6 inquiries from Alliant (the secured loan required no credit pull).

Checking - Open

Savings -  Open

Credit Card - Open

Secured loan - Closed

Unsecured loan - (most recent) I was approved but I declined because interest rate was too high (a result of my score).

Line of Credit  - Open

Motorcycle Loan  - Open

Alliant uses a scoring model from EQ, called "Pinnacle". Below is a description of the Pinnacle scoring system from EQ.

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PinnacleSM

Pinnacle is a generic risk model that predicts severe delinquencies within 24 months from scoring. Pinnacle uses a new, innovative design blueprint to leverage Equifax’s rich consumer credit information and Fair, Isaac’s predictive technologies. It is an alternative risk-scoring model to BEACON® that provides more refined risk assessment across the entire risk spectrum. Like BEACON, Pinnacle analyzes the information contained within the credit file, assesses the future risk of a consumer, and assigns a score based upon the risk level.

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You make a good point in your statement "The key is making sure that your reports are clean and then you have nothing to worry about. Late payments and derogatory accounts are what cause big gaps in scores across different algorithms". 

I disagree.  My reports are all squeaky clean.  They are monitored regularly and all contain the same information. 

FAKO scores from Creditsecure are EQ 725, TU 734 and EX 725.  My current EQ and TU FICO is in my signature. 

Oldest account is over 13 years.  Newest is 4 months. 

AAoA is 1 yr. 8 mo. (because of an app spree last year). 

So, in this instance, the FAKO score is as accurate and useful as FICO.

So, if your statement were true, the gap between my FICO score and the Pinnacle score should not be 50 points and I should have been offered the loan at their prime rate of 11.90.  Instead, I was offered 13.5 (thereabouts).  And please understand, I am not grousing about Alliant or their scoring model.  I AM grousing about the usefulness of the FICO score that is touted as being more useful to the consumer than other scoring models.

Your statement: "It's a mess, but it is reality"  really says it all . . . . (big sigh).

Why can't the playing field be level or at least more predictable?

[haulingthescoreup]

No reason for any mods/ admins to have pulled this thread! Threads get yanked if and when people get ugly with one another, not when they're expressing frustration with FICO scores.

The problem is, there are many different FICO scoring formulas. Different lenders pull different versions. I think that the Alliant version is the otherwise-didn't-really-go-anywhere Equifax FICO NextGen score. As it says, it focuses much more on the most recent 24 months of credit behavior. For whatever reason, Alliant must think that it's a better predictor of credit risk for its customers.

But when it comes to Equifax FICO scores, the Beacon 5.0 model used here is much, much more common.

Things get even more exciting if you're shopping for a car or truck. Lenders might use an "industry-enhanced" FICO score, which for the auto industry runs up to 900 (I think; it's all starting to blur) and puts more emphasis on auto loan history.

And then there's the TU98 vs TU04 bit, and if TransUnion isn't interested, there might not be a lot that FICO can do.

And of course, Experian won't sell its FICO score, but it dearly loves selling its Vantage score. --just to wade into the swamp waters of FAKO's.

The scores available here are the ones used by mortgage lenders, because they are generally the scores used by other lenders as well who use FICO scores. Even then, there are three different FICO scoring formulas --one for Equifax, one for TransUnion, and one for Experian. The different scores don't just result from the different reports. That's why you'll read that Equifax "hates lates", and TransUnion "likes 0 accounts with balances" (which is true for a certain score range, but not others.)

[marty56]

Having an AAoA of under 2 years is hurting your FICO score as well as the recent INQs.  Also you must look at the actual balances that your CCs report since that can have a major effect on your score.  Once your AAoA increases and you can control how much CC balances report, you should be able to get your scores into the high 700 range.\

The choice of which scoring model to use is totaly up to each creditor and given the current times, it is unlikely that they would switch and they will stay with what the know.

Payment history is the primary component in your credit score and it should be since the goal of any credit score is to predict default on a loan.  Credit usage is another primary component and the thrid one is time, which we have the least control over.  If you mind your credit usage and nenver pay late, your are well on your way to having a good credit score, regardless of which scoring algorithm a lender uses.

[Itsmeagain]

Thank you for your reply haulingthescoreup and marty56.

Your in-depth explanations are interesting but do little to resolve the conundrum.

As I understand the essence of your replies, there is no way to accurately predict what score will be generated by any particular lender unless it is a mortgage application.

And with that knowledge, I will retire to the bar, mix my favorite adult beverage and hoist it to the sky, shouting "HAIL TO THE FICO GODS".  And I will repeat the process until;   a) FICO scoring is modified to be truly "FAIR" or;  b) until it no longer makes any difference.

I wonder which will happen first.

[marty56]

Actually it is easy to know which scoring model a particular lender will use since there are web sites and posting here that collect information.  Also if you usea credit monitoring service, you will be notified that an INQ was placed on one or more of your CRs.  I know there is 2 possible TU scores that a lender can use and for autoloans, it is possibly they will use the auto-enhanced FICO score but you can always ask the lender, prior to applying, which score they will use.

I always maintain that if you mind what's in your report, then the scores will take care of themselves.  You must allow the time factor to play out which is very hard to do.

On the subject of TU04 vs TU98, IMHO you won't find say an 800 TU98 and a 720 TU04 under the same roof.  If you have all the basics for a great FICO score, then regardless of which FICO formula is used, your scores will also be great.

[Itsmeagain]

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@marty56 wrote:

Actually it is easy to know which scoring model a particular lender will use since there are web sites and posting here that collect information. 

EXACTLY! You have just validated my original post.  A comprehensive list of creditors and the scoring model used.

Also if you usea credit monitoring service, you will be notified that an INQ was placed on one or more of your CRs.

And your point is?

I know there is 2 possible TU scores that a lender can use and for autoloans, it is possibly they will use the auto-enhanced FICO score but you can always ask the lender, prior to applying, which score they will use.

Fine for auto loans but not always possible when applying for a credit card.

I always maintain that if you mind what's in your report, then the scores will take care of themselves.  You must allow the time factor to play out which is very hard to do.

On the subject of TU04 vs TU98, IMHO you won't find say an 800 TU98 and a 720 TU04 under the same roof.  If you have all the basics for a great FICO score, then regardless of which FICO formula is used, your scores will also be great.

Good advice; but what about the myraid people who frequent this forum who are building or rebuilding their credit?  The list I suggest would be invaluable to them; to concentrate their applications on the lenders who use the scoring model most friendly to their situation and minimize the negative impact to their score, .

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HAIL TO THE FICO GODS . . . .(hic) . . . . hale toth fico . . . .