I found this on the Fair Isaac site: [Our] model shows that the worst risks are those who have opened new accounts and gone delinquent on those new accounts. Alternatively, the best risks have opened new accounts and kept them current. Their graphic of the National Population shows the risk of a person who has no recently opened trade lines on file as 14.1 %. A person who has opened one new account or even 2 new accounts and kept the account current, has a risk of a future "bad rate" of only 11.2% http://168.230.129.57/servlet/SiteDriver/Content/1698/BSTNextGenSpring99.pdf (page 3) These models are truly complicated. I had a feeling that going too long without opening an account could hurt you. There it is in blue and white.
This is great research. So lets see, we now have to deal with 18 VS 10 scoring models. The new family of models is called NextGen. With this new scoring system the following will be waited more heavily: One: Having no derogatory items. More of a plus. I wonder if that is ever or showing on your report? Two: Having only one account. More negative influence than it was. Three: Having to short a file history. More negative influence than it was. Four: Having derogatory items on a credit report. More negative influence if the derogatory accounts were really bad like a BK and less negative if the derogatory accounts were relatively minor. Five: Credit file thickens: The more accounts the better. Also the more account that are 24 months old the better. Question. Can anybody tell me what a multi-dimensional predictive variable (mini-model) is?
Re: Reason new account can help sco ::jumping up and down, raising hand like Arnold Horshack:: OH, OH, OH, OH, OH, I CAN, I CAN! A multi-dimensional predictive variable is simply what it sounds like: it's one variable (a "supervariable") that is actually composed of several smaller variables ("subvariables"); it's predictive because it's used to deduce future probabilities; and it's a "mini-model" because the supervariable itself essentially provides a meta-theory regarding the items under study. Now, that said, this may sound smart, but actually they'd have failed me out of my first semester of grad school if I didn't somehow memorize the "research construction" basics, lol. So, as my grandpa would say, I'm not so much a smart feller as I am a fart smeller, or something like that. Doc
Re: Reason new account can help sco Thanks Arnold <g> For the puzzle-solvers amongst us, unraveling the mini-model is a challenge we can't resist. At least it is a (relatively) healthy obsession. I still feel sorry for Mr. and Mrs. Average Consumer who imagine that simply paying their bills on time will result in the highest score. Who knew that you had to take statistics to be a good credit risk?
Re: Reason new account can help sco Any one out there found that opening a new account made their credit score go up?
Re: Reason new account can help sco Yes. Mine has. 2 new accounts in the last 4 months has helped my score. I notice an increase after it starts reporting.
Re: Reason new account can help sco I believe that the model likes to see you actively using credit. I think you are penalized for going a long time without applying for anything new. (I know that this is Catch 22, but I really believe it is built in. Experian might like zero inquiries, but I think Eq and TU like at least one)
