I just got this info posted to me from another site. If it is already know info, please forgive! I have sent a reply in hopes of getting a few questins answered. I think the formual is for when you apply for a loan and someone actually reviews the information (not just score driven, unless the info below is asked on the application). QUOTE: Hi Nikki Here is some helpful information on how you get your scores: Do you own your own home? Add 25 points. Rent â?? you get 15. Live with family â?? 10 points. How long at the current address? Less than five months â?? 12 points. Two and a half years â?? add 15 points. Over ten years at your current residence? Add 23 points. If youâ??re a professional (doctor, attorney, corporate officer, etc) add a whopping 50 points. Semi-professional â?? add 44. A manager â?? add 31 points. Work in an office â?? 28 points. Blue-collar worker? 25 points. Retired? 31 points. Now we get into how long on the job. Less than five months - you get 2 points. Up to a year and a half â?? you get 8 points. Up to two and a half years â?? you get 19 points. If you been there up to five and a half years â?? you get 25 points. Up to twelve and years on the job and you get 30 points. Over twelve years and you still get 30 points. Retired? You get 43 points. Now look in your wallet. How many store cards do you have? None? You get zip. You have a store card in there? Add 11 points. So you have a major credit card? Add 16. If you have both add 27. Now what is your banking situation? If you have a checking account you get to add 5 points. A savings account and you get to add 10 points. (That doesnâ??t multiply if you have multiple accounts â??sorry). However, if you have both checking and savings you get to add 20 points. Do you feel like your playing the game of LIFE yet? Well, in a way you are. Now we get to the scary stuff. What is your debt to income ratio? Less than 15% you get 22 points. 15% to 25% you only get 15 points. If your debt ratio is 26% to 35% only add 12 points. Debt ratios of 36% to 49% count for only 5 points. Anything over 50% and you get zip. Ok, so what about all the online credit card applications you completed on a rainy day? How many inquiries do you have? If you have none you get to add 3 points. If you have just one inquiry you rate 11 points. Two inquiries and you get 3 points. Three inquiries and you lose points â?? take away 7 points. Same thing goes for 4 inquiries. If you were bored on a rainy day or during the holidays you requested a lot of additional credit and five to nine inquiries â?? you lose 20 points! Moral of this story is donâ??t apply for too much credit. Now, how long have you had credit history? Yes, that counts too. Less than five months and you get nothing. One to two years and you can add 5 points. Three to four years and you can add 15 points. Five to seven years and you get 30 points. Over eight years and you get 40 points. So, how many revolving trades do you have? None? You get 5 points. One or two revolving trades and you get 12 points. Three to five and you get 8 points. Over six revolving trades and you are penalized â?? take away 4 points. All right, now look at your credit card statements. What is the percentage available balances? 0% to 15% and you get 15 points. 16% to 30% you get 5 points. 31% to 40% and you lose 3 points. 41% to 50% and you lose 10 points. More than 50% and you lose 18 points. This percentage is calculated by dividing your total credit used (all the cards combined) by the total credit limits of all your credit cards. So what happens if you have some derogatory information listed on your credit report? Just one and you lose 29 points. Slow pays and you lose 14 points. 1 line of satisfactory line of credit and you can add 17 points. 2 lines and you get 24 points. 3 lines and you get 29 points. So your wondering how Fair Isaac (now there is an oxymoron if there ever was one) got all this information about you. Other than public records and criminal records they would have only gotten this information from you on an application for credit. Now you know. Now you can exercise caution in the number of requests for credit, your debt to income ratio, etc, can effect the purchase of a new home or car or just about anything. All of this information was obtained directly from the FTC conference held in July 1999. Nancy M. END QUOTE Well, like I siad, I am trying to figure out how this affects FICO scoring. I did the math on my situation adn it comes out to about 200...way less than FICO score. I THINK this is in addition to the score that is already shown when we pull or partially, or something. If anyone has a clue, PLEASE POST!! Thanks, Nikki
According to Fair Issac, employment and income have nothing to do with FICO scoring. They could be lying but if they do base so much on employment, why does an 18 year old who works at Burger King but has 1 positive TL from a $200 Capital One card has a higher score than I do with 6+ years with my current company in a professional position making a decent income? I think these scoring methods are probably more used more in cases of manual underwriting for a loan-when you <<<gasp>>> actually get a human reviewing your application
Not to be the one pointing out the obvious. But when I go buy my Fico score from one of the CRA's, they dont have my income, my job info, or my housing information. Like I stated on a previous thread I was explained this situation by a friend of mine who works for bank one. All the above play a factor only when the FICO score is borderline to their requirements, and does not play a role in determining your actual FICO score but only may be looked at it when a lender isnt convinced of your credit worthyness by the FICO score alone.
The information in your post is interesting but I think that FICO scoring and the methodology behind it is much more complicated then appllying points to the categories you listed ... IMHO .... I've tried to research what little is available from Fair, Isaac & Co on credit scoring. A number of thier employees have given statistical presentation fo various financial seminars (I found some searching the web). I'll bet the different categories (lates, ratios, inquiries, history, etc.) have been regressed to determine variable coeficients that are used to place an individual in a particular scoring bucket. As your categories change your score changes .... Pure speculation on my part ... but I doubt that a simple equation exists. There doesn't seem to be anything published on how often the Fico scoring can change. Data used to drive the analysis is constantly changing and I assume the data drives where your score will end up. We may never know exactly how the score is calculated unless they are forced to publish something.
I agree with what all of you are saying about what is and isn't factored in. I have an idea that it is only for underwritten loans and <gasp> when HUMANS look at an application. I thought the info was interesting, though. Nikki
This looks like the same info as contained in this link from the FTC which has been posted on this site from time to time. http://www.ftc.gov/bcp/creditscoring/present/index.htm
Here is another link with the transcript of the presentation. Might help put it into context as to it's relationship to fico scores. http://www.ftc.gov/bcp/creditscoring/
NO... Thats Mortgage Scoring not FICO scoring, which does not contain own/rent and such other factor types. (this information is quoted from the link on the bottom... Emphasis mine.) Credit scores predict a borrowerâ??s future capacity to repay debt and rely exclusively on credit bureau information such as past debt payment pattern, credit exposure and borrower appetite to take on more debt. The most widely used credit score today is FICO. Credit scores, however, do not take into account borrower income, total debt-toincome ratios or product information. Nonetheless, FICO scores have been shown to be good predictors of future repayment performance for many consumer credit products. Application or custom scores, such as mortgage scores, are developed to predict an explicit result, such as delinquency or foreclosure, and rely on a much broader set of variables that include borrower income, credit bureau information, collateral value, product type and regional economic information. While generic scores tend to be less costly and more commonly used in the industry, custom scores have the advantage of being more accurate in their predictive performance. Citing results from GEâ??s OmniScore, Makuch illustrates this point by differentiating between scores that are used to predict mortgage default as opposed to foreclosures, understanding that mortgage default is a subset of foreclosure. He states: â? â?¦scores that were optimized to predict default over longer time periods were approximately 20 percent less effective at identifying delinquent loans over a shorter time period â?¦ Similarly, delinquency scores were approximately 45 percent less effective at identifying foreclosures.â?7 From a modeling perspective, scores that predict long-term foreclosures will have a different set of variables and weights than scores that are designed to predict shorter-term delinquency. For example, FICO scores, when used as an element of mortgage scores, tend to play a greater role in predicting short-term delinquency rather than actual foreclosures. Given the fact that in the majority of instances foreclosures are due to deterioration in the collateral value, scores optimized to predict such events place a greater emphasis on collateral and economic-related factors. from: http://www.fncinc.com/media/coll_docs/FNC_COLLATERAL_SCORE_WHITE_PAPER_050602.PDF
Nikki, I hope you weren't offended my post- as that was not it's intention at all. I read it over and does sound sort of smart mouthed- I wasn't directing that towards YOU, just the fact that nowadays creditors have their computers decide in 30 seconds are less whether you're "worthy" without even giving you a second thought. I thought the info was interesting, as well. I always look forward to reading your posts
What has not been taken into consideration here is that each industry may be using their own scoring model. For example...if you apply for a car loan, they will use auto scoring. Same for a home loan, etc. Also, many banks and credit cards have their own scoring model and while it may be based on FICO and may have even been developed by FICO...it will not be the score you see when you purchase your score. While FICO may not take into consideration your income, your profession, etc., you do put it on your applications and it can be used in the scoring model being used by the bank, or whoever. You might want to research this further. You have no way of knowing what scoring model is being used at any given time when you apply for credit. L
Smontoya, No worries, Babe. No flame taken! I always appreciate the diversity of responses on the board. It helps us all keep a "there's always another way to interpret things" approach. Thanks for all of your input! There are a lot of people here that have "been there, done that", but it is always reassuring that some of us are "still in it, still doing that". I enjoy reading your posts as well. You have the perseverance to follow through with the whole credit repair and are always sincere in your questions and advice. You are an asset to creditnet. Keep on working at your scores...progress is progress, no matter how big or small! Nikki EQ 549 05/02 653 12/02 TU 545 05/02 605 01/03 FICO TU 550 01/03 FACO EX 633 01/03
