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""FICO 8" vs "FICO 5-4-2 Mortgage" Scores

Member

""FICO 8" vs "FICO 5-4-2 Mortgage" Scores

I have been a myfico.com subscriber for over a year and have purchased the 3B report 1-4 times a month in preparation for a home re-fi I am just beginning to initiate.

 

My recent FICO scores represented very strange behavior over the past 2 weeks, and I'd love some input into how this situation could possilbly happen:

 

(1)  Per my September 27, 2018 3B report, my 3 FICO 8 scores were 772-771-776.  My FICO 5-4-2 scores (i.e. mortgage scores) were 729-739-755.

(2) Between September 27 and October 7, I received 24 "alerts" from myfico.com - and all 24 represented a decrease in balances owed on various accounts as payments were reveived by various creditors.

(3)  Per my October 7, 3B report, my FICO 8 scores were 772-771-783 - so the only change in FICO 8 scores was that the Experian FICO 8 score increased by 7 points.  That being said, on the same report, my FICO 5-4-2 scores were 732-755-719.

It is reasonable to think that, based on the alerts I received between September 27 and October 7, all of my FICO scores would increase.  And all of the scores did increase EXCET the Experian FICO 2 score which dropped from 755 to 719.  That is a huge drop.  How is that possible?

 

I spoke with several myfico.com customer service reps on the phone, but they didn't even seem to understand the question let alone try to give a plausbile answer.  They just told me that "scoring was too complicated for me to understand" and that "if I wanted my score to increase then I should make more payments towards my debts".  

 

Is there anyone who reads these forums that might offer some insight into this issue?  There are no negatibe items on my credit report.  There are 91 accounts listed.  I looked at all 91 accounts on the Experian September 27 and October 7 3B report dates..  The ONLY differences were a handful off acounts for which payments had been received so the balances owed had decreased and the % usage of credit limit had decreased.

 

It seems to defy reason, logic, and math that my Experian FICO Score 2 could have dropped 36 points based on the above.

 

Any help would be greatly appreciated.

 

Thank you in advanec.

Message 1 of 17
16 REPLIES
Super Contributor

Re: ""FICO 8" vs "FICO 5-4-2 Mortgage" Scores

Was your EX FICO 8 score and FICO 2 score generated at the same exact time on the 27th and 7th?  What I mean is was the bureau data used for both scores identical? 

 

If so, I'd be confused too as to how you'd arrive at +7 on FICO 8 while being -36 on FICO 2.

 

With 91 accounts, you definitely have a lot going on.  Your FICO 2 score is more sensitive to number of accounts with balances reported.  If you had quite a few more accounts with balances reported on your second pull, I could see FICO 2 dropping... but at the same time I'd expect to see FICO 8 drop as well, just not as much.  I'm looking forward to other responses from our members here on this one.

Message 2 of 17
Community Leader
Super Contributor

Re: ""FICO 8" vs "FICO 5-4-2 Mortgage" Scores

If our OP has some open charge cards that might be the culprit.  The balances on charge cards are ignored in FICO 8 but can have a heavy impact on FICO EX 2.  Or if a tiny collection appeared -- FICO 8 would ignore that but it could have a huge impact on EX 2.

 

The biggest problem was identified by BBS, namely the presence of 91 accounts.  When a report has that many accounts it is very hard to perfectly detect every change or issue that might be going on.  It's like this.  If I give you half a dozen 4-digit numbers to add by hand, you can probably get the right answer if you do it carefully.  If I give you 91 of these numbers, however, it's very likely that you will make a mistake in your addition.  That may be the reason that the CSRs were throwing in the towel.

Message 3 of 17
Super Contributor

Re: ""FICO 8" vs "FICO 5-4-2 Mortgage" Scores


@Cruzzer1 wrote:

I have been a myfico.com subscriber for over a year and have purchased the 3B report 1-4 times a month in preparation for a home re-fi I am just beginning to initiate.

 

My recent FICO scores represented very strange behavior over the past 2 weeks, and I'd love some input into how this situation could possilbly happen:

 

(1)  Per my September 27, 2018 3B report, my 3 FICO 8 scores were 772-771-776.  My FICO 5-4-2 scores (i.e. mortgage scores) were 729-739-755.

(2) Between September 27 and October 7, I received 24 "alerts" from myfico.com - and all 24 represented a decrease in balances owed on various accounts as payments were reveived by various creditors.

(3)  Per my October 7, 3B report, my FICO 8 scores were 772-771-783 - so the only change in FICO 8 scores was that the Experian FICO 8 score increased by 7 points.  That being said, on the same report, my FICO 5-4-2 scores were 732-755-719.

It is reasonable to think that, based on the alerts I received between September 27 and October 7, all of my FICO scores would increase.  And all of the scores did increase EXCET the Experian FICO 2 score which dropped from 755 to 719.  That is a huge drop.  How is that possible?

 

I spoke with several myfico.com customer service reps on the phone, but they didn't even seem to understand the question let alone try to give a plausbile answer.  They just told me that "scoring was too complicated for me to understand" and that "if I wanted my score to increase then I should make more payments towards my debts".  

 

Is there anyone who reads these forums that might offer some insight into this issue?  There are no negatibe items on my credit report.  There are 91 accounts listed.  I looked at all 91 accounts on the Experian September 27 and October 7 3B report dates..  The ONLY differences were a handful off acounts for which payments had been received so the balances owed had decreased and the % usage of credit limit had decreased.

 

It seems to defy reason, logic, and math that my Experian FICO Score 2 could have dropped 36 points based on the above.

 

Any help would be greatly appreciated.

 

Thank you in advanec.


Without seeing the two reports side by side it's difficult to evaluate, but some possibilities are:

1. An old closed account aging off.

2. An increase in number of accounts reporting a balance.

 

A technique I learned from @Revelate would be to compare the negative reason codes from the two FICO 2 score reports and see if there's a change in those, which sometimes offers a clue.


FICO8 EQ 755 TU 777 EX 746 Total revolving limits 643900 (533900 reporting)
Message 4 of 17
Community Leader
Super Contributor

Re: ""FICO 8" vs "FICO 5-4-2 Mortgage" Scores

Here's another example of the subtle differences between the two models, differences that could easily result in score differences.

 

Fred has ten credit cards.  Seven have a zero balance.  Of the other three, two have a credit limit of 35k and the last card has a CL of 20k. 

 

Between the two moments in time, Fred pays off the card with the lower CL and pays down the balances on the other two.

 

FICO 2 will see that as all cards at zero, since the model ignores the balances of all cards with a CL of > 35k.  And therefore will impose a penalty.  FICO 8 will see that as a score improvement, since it will count the balances of all three cards.

 

My point is not that this did happen, but it is an example of the weird things that could be going on, stuff that would be very easy to miss.

Message 5 of 17
Moderator Emeritus

Re: ""FICO 8" vs "FICO 5-4-2 Mortgage" Scores


@SouthJamaica wrote:

A technique I learned from @Revelate would be to compare the negative reason codes from the two FICO 2 score reports and see if there's a change in those, which sometimes offers a clue.


Heh was going to suggest the very thing.

 

Post the reason codes for EX FICO 2 for the two reports (with respective dates), that large of a change quite likely some detail will be found there.




        
Message 6 of 17
Member

Re: ""FICO 8" vs "FICO 5-4-2 Mortgage" Scores

Thank you all for your insightful replies.

Let me provide some more data here:

 

Of the 91 accounts on my credit report, only 37 are open - these are identical between the Sept. 28 and the Oct. 7 reports.  Should any of the 54 closed accounts affect the FICO 2 score?   There are zero late payments ever, either in the open or the closed accounts.

 

When laying all 195 pages of each credit report side-by-side, here are the differences between Sept. 28 and Oct. 7:

 

(2)  The "Oldest Account Open" changed from "27Yr5Mo" to "27Yr6Mo".

 

(3)  The "Average Age of Your Accounts" changed from "11Yr4Mo" to "11Yr5Mo"

 

(4)  The "Percentage of Princial you have paid down on your open non-mortgage installment loans" changed from "55%" to "54%"

 

(5)  The "Total owed on revolving and/or open-ended accounts" changed from $67,133 to $65,087

 

(6)  The "Total balance on revolving and/or open-ended accounts" changed from $67,133 to $65,087

 

(7)  The "Age of most recenlty opened account" changed from "1Yr5Mo" to "1Yr6Mo"

 

All of the above items from the 6-page summary at the beginning of the 195-page report - and I have only notated changes here in the Experian column of data.

 

The "Risk Rate" for both Sept. 28 and Oct. 7 is "2%".

 

When I just ahead to page 15 of the credit report, I see my Mortgage Lending (5-4-2) scores and the "Factors" that affect them.  I will list the factors here.  There is no notation as to whether each factor applies to EQ, TU, and/or EX or a combination of those.

 

For the Sept. 28 report:

1.  The amount owed on your revolving and/or open-ended accounts is too high

2.  You opened a new credit account relatively recently

3.  You've made heavy use of our available revolving credit

4.  You have too many credit card with balances

5.  You have too few or too many credit accounts

6.  You've recenly been looking for credit

7.  You have a consumer finance account on your credit report

 

For the Oct. 7 report:

1.  You have too many credit cards and/or open-ended accounts carrying balances

2.  The amount owed on your revolving and/or open-ended accounts is too high

3.  You've made heavy use of your available revolving credit

4.  You've recenlty been looking for credit

5.  You have a consumer finance account on your credit report

6.  You have a short credit history

7.  The balances on your non-mortgage credit accounts are too high

8.  You have not established a long revolving and/or open-ended annout credit history

 

Thus, in the Oct. 7 report, there are 5 factors that were not listed on the Sept. 28 report.

Let me make a comment on each of those 5:

 

1.  I have the same amount of credit cards and/or open-ended accounts carrying balances on Oct. 7 as I did on Sept. 28

2.  The amount owed on my revolving and/or open-ended accounts is lower on Oct. 7 than it was on Sept. 28

6.   The credit history length shown in the credit report summary is 27Yr6Mo - is that really too "short"?  I have had an excellent record of making 100% of payments on time for the past 40+ years.

7.  The balances on my non-mortgage credit accounts are lower on Oct. 7 than they were on Sept. 28 with one exception.  A new Parent PLUS student loan distriubtion showed up between Sept. 28 and Oct. 7.  It was for my son's college.  It took the student loan balance from $90K to $103K

8.  Again, per the summary, I have a 27Yr6Mo credit history.  How long is long enough?

 

I am still at a loss to understand the 36-point FICO 2 Score (per Experian data) drop.

 

Thanks agian in advance for any responses/help/advice.

Message 7 of 17
Established Contributor

Re: ""FICO 8" vs "FICO 5-4-2 Mortgage" Scores

"  A new Parent PLUS student loan distriubtion showed up between Sept. 28 and Oct. 7.  It was for my son's college.  It took the student loan balance from $90K to $103k"
This is the reason would be my guess based on what you have said (especially if it shows as a new loan)
Scores hover around 800
Haven't been AZEO in over a year
Rome was not built in a day, neither is a good credit profile
Message 8 of 17
Member

Re: ""FICO 8" vs "FICO 5-4-2 Mortgage" Scores

The PLUS Loan does not show as a new loan.

Here are the details:

(1)  The credit inquiry was done back in March 2018 - so that is well before the Sept. 28 / Oct. 7 issue I am having

(2)  The loan was actually distributed in late September.

(3)  When I compare the Sept. 28 and Oct. 7 credit reports, the Balance due to the "US Dept. of Education" increased from $90,316 to $103,330.  It was just a balance increase - not a new account.  Even if the PLUS loan was a factor, it's hard to imagine that balance change overrode of all of the other "good" changes that happened in other credit card/revolving accounts during that same 9-day time period to the extent of a 36-point drop.  For example, the increase form $90,316 to $103,330 was also present in the EquiFax report, but the EquiFax Mortgage Score 5 increased from 729 to 732 during that same time period because the reduction in balances in all the other accounts.

 

Not to be lost in all of this is a change that Bank of America made to all 3 credit reports on Sept. 27, 2018.  Back in Oct. 2017, BoA fraudulently reported me for a 30+ late payment.  It took me almost a year to get it corrected, and it was finally "corrected" on Sept. 27, 2017.  All negative info was removed from that account and the month-by-month credit history is perfect for that account for all 3 bureaus.  Oddly enough, that BoA account showed "Closed" on both the Sept. 28 and the Oct. 7 credit reports for all 3 bureaus.

 

As a reference, on my Sept. 13 credit reports, that BoA account was still "Open" and a single 30+ late payment event was showing on all 3 credit bureaus.

 

Thus, between Sept. 13 and Sept. 28, the 30+ event had been deleted and the payment history was perfect - and the account had moved to a "Closed" status - which is odd because the account is still open and monthly payments are still being auto-drafted from my bank account.

 

Thanks again in advance.

Message 9 of 17
Super Contributor

Re: ""FICO 8" vs "FICO 5-4-2 Mortgage" Scores


@Cruzzer1 wrote:

Thank you all for your insightful replies.

Let me provide some more data here:

 

Of the 91 accounts on my credit report, only 37 are open - these are identical between the Sept. 28 and the Oct. 7 reports.  Should any of the 54 closed accounts affect the FICO 2 score?   There are zero late payments ever, either in the open or the closed accounts.

 

When laying all 195 pages of each credit report side-by-side, here are the differences between Sept. 28 and Oct. 7:

 

(2)  The "Oldest Account Open" changed from "27Yr5Mo" to "27Yr6Mo".

 

(3)  The "Average Age of Your Accounts" changed from "11Yr4Mo" to "11Yr5Mo"

 

(4)  The "Percentage of Princial you have paid down on your open non-mortgage installment loans" changed from "55%" to "54%"

 

That's odd. Normally the percentage of principal you have paid down keeps increasing, not decreasing.

 

(5)  The "Total owed on revolving and/or open-ended accounts" changed from $67,133 to $65,087

 

(6)  The "Total balance on revolving and/or open-ended accounts" changed from $67,133 to $65,087

 

(7)  The "Age of most recenlty opened account" changed from "1Yr5Mo" to "1Yr6Mo"

 

All of the above items from the 6-page summary at the beginning of the 195-page report - and I have only notated changes here in the Experian column of data.

 

The "Risk Rate" for both Sept. 28 and Oct. 7 is "2%".

 

When I just ahead to page 15 of the credit report, I see my Mortgage Lending (5-4-2) scores and the "Factors" that affect them.  I will list the factors here.  There is no notation as to whether each factor applies to EQ, TU, and/or EX or a combination of those.

 

For the Sept. 28 report:

1.  The amount owed on your revolving and/or open-ended accounts is too high

2.  You opened a new credit account relatively recently

3.  You've made heavy use of our available revolving credit

4.  You have too many credit card with balances

5.  You have too few or too many credit accounts

6.  You've recenly been looking for credit

7.  You have a consumer finance account on your credit report

 

For the Oct. 7 report:

1.  You have too many credit cards and/or open-ended accounts carrying balances

2.  The amount owed on your revolving and/or open-ended accounts is too high

3.  You've made heavy use of your available revolving credit

4.  You've recenlty been looking for credit

5.  You have a consumer finance account on your credit report

6.  You have a short credit history

That's odd that that would pop up all of a sudden.

7.  The balances on your non-mortgage credit accounts are too high

That's odd too

8.  You have not established a long revolving and/or open-ended annout credit history

Again I can't see where that is coming from

Thus, in the Oct. 7 report, there are 5 factors that were not listed on the Sept. 28 report.

Let me make a comment on each of those 5:

 

1.  I have the same amount of credit cards and/or open-ended accounts carrying balances on Oct. 7 as I did on Sept. 28

2.  The amount owed on my revolving and/or open-ended accounts is lower on Oct. 7 than it was on Sept. 28

6.   The credit history length shown in the credit report summary is 27Yr6Mo - is that really too "short"?  I have had an excellent record of making 100% of payments on time for the past 40+ years.

7.  The balances on my non-mortgage credit accounts are lower on Oct. 7 than they were on Sept. 28 with one exception.  A new Parent PLUS student loan distriubtion showed up between Sept. 28 and Oct. 7.  It was for my son's college.  It took the student loan balance from $90K to $103K

Well this might be the thing that explains it; you didn't mention it in your original post.

8.  Again, per the summary, I have a 27Yr6Mo credit history.  How long is long enough?

 

I am still at a loss to understand the 36-point FICO 2 Score (per Experian data) drop.

 

Thanks agian in advance for any responses/help/advice.


 


FICO8 EQ 755 TU 777 EX 746 Total revolving limits 643900 (533900 reporting)
Message 10 of 17