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Do you know your "Resilience Score" ?


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I used to worry about this sort of thing.  Now that I only apply for credit when I don't need it, though, my attitude has changed.  If I get declined, I will try a recon, but beyond that, I don't care.  If they reject me, they are losing the business of someone who will never repeat his past credit mistakes.

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The entire thing is a crock of garbage.  It is subjective despite their claims it is completely objective.  Considering most lenders and creditors haven't even adopted FICO 9 yet it could be 3-5 years before it has any impact on lending at all.  Especially given the economic acid trip the globe is on right now with Covidiocy.

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34 minutes ago, CreditSucksNot said:

The entire thing is a crock of garbage.  It is subjective despite their claims it is completely objective.  Considering most lenders and creditors haven't even adopted FICO 9 yet it could be 3-5 years before it has any impact on lending at all.  Especially given the economic acid trip the globe is on right now with Covidiocy.

plus the idea this measures "resiliency" to an economic set-back yet only uses consumer credit reports is silly. I would think a bank cares more about someones NW and LNW to assess "resiliency" risk level.

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2 hours ago, hegemony said:

plus the idea this measures "resiliency" to an economic set-back yet only uses consumer credit reports is silly.

Especially considering that many consumers during times like these (myself included) have simply buckled down, paid off all revolving debt and are sitting tight with an increasing bank account.  Things like cell phone, cable, rent, and utilities all paid but don't report. Sadly my "resiliency" score may not see a change until the bottom falls out for everyone else and there are no changes on my CRs.

2 hours ago, hegemony said:

I would think a bank cares more about someones NW and LNW to assess "resiliency" risk level.

You would think but even then there are outliers.  I work with a surgeon whose net worth is in the millions. He cannot seem to pay his bills on time. (side note I don't know if that includes credit cards) but he laughs when the bright yellow notice with the red letters comes in the mail from the gas company quarterly announcing they are about to disconnect him.  Same for cable, cell, and electric.  He will even ask:  "hand up who waits until they threaten disconnect before paying?" If I were a lender I would think that behavior is higher risk in someone with a high NW/LNW than the lower earning NW/LNW consumer who pays everything and keeps a lower profile.

Edited by CreditSucksNot
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4 hours ago, nemo said:

I used to worry about this sort of thing.  Now that I only apply for credit when I don't need it, though, my attitude has changed.  If I get declined, I will try a recon, but beyond that, I don't care.  If they reject me, they are losing the business of someone who will never repeat his past credit mistakes.

Good to you Nemo! It can't be emphasized more, what a powerful feeling. Looking for more members, their forward-looking realization of this wonderful emotional trend. :D

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I find it somewhat counterproductive to pursue resilience anyway, even if there were a way to measure it.  Resilience just means people get back to the same place they were before, which might not even be all that desirable.  It would be better for people to pursue, and lenders to seek out, anti-fragility, meaning that people come out of a shock better off in some way than they were before.

 

Example 1:  Someone uses market volatility as a repeated series of opportunities to buy low and sell high.

 

Example 2:  Someone takes advantage of a period of unemployment to learn something new that will improve their career.

 

Both of these examples require keeping extra cash around, so maybe that is a good start at measuring the capacity for anti-fragility.  The actual practice of it depends on the person's motivation.

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Resilience!

 

This guy has a tee shirt with Resilience on it. And it's about protecting yourself and loved ones from a severe economic downturn so it's actually somewhat inline with the Fair Isaac "resilience" score.

 

Tee shirt here:

https://www.peakprosperity.com/the-peak-prosperity-tribe-is-gearing-up/

 

He's a bit of a outlier very skeptical of the financial industry and something of a prepper. But not totally crazy.

 

Oddly, he's got a good series of videos on youtube which are interesting because he started posting his analysis back around Jan 23. Has posted new ones every few days as new info comes out. I find the evolution of his analysis pretty well thought out though I disagree with some smaller parts of it. He's no dummy. PhD in pathology from Duke.

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17 hours ago, hegemony said:

plus the idea this measures "resiliency" to an economic set-back yet only uses consumer credit reports is silly. I would think a bank cares more about someones NW and LNW to assess "resiliency" risk level.

 

Yeah, well I might imagine when it comes to credit risk in general (as assessed by standard FICO scores) that a banks would also care more about NW and LNW.

 

What you must bear in mind is that while "correlation doesn't mean causation", correlation does translate to consistency (over large numbers).  A lender like Chase isn't so much concerned that their experience with you is consistent with your FICO score prediction of risk as it is concerned that for any given sample of 10,000 card holders, Chase's collective experience matches up with the FICO score risk prediction.  Even if the actual default experience for a cardholder turns out to be wildly off from that anticipated by their FICO scores, so long as the "herd" measures up on target, Chase is assured profitability.

 

FICO scoring is all about a "herd" mentality (although now that they market their scores to individuals as well, they're doing their best to make you think that you're firmly in control of your score and it's impact on credit availability and pricing -- a partial truth, at best).

 

We've entered an era of peak economic uncertainty; one that's likely to persist for at least 2 years.  More than any recession in memory, it's entirely unclear whether the economy may turn in a matter of months (with a return to economic "normalcy") or persist in the dumps for an extended period of time.  It's times like this when banks become wary of lending to traditionally "marginal" risks.  Unfortunately, that segment is among their most profitable.

 

A risk score that shines a light on those credit attributes that are most commonly shared by those who've recovered from past delinquencies is likely very marketable just now.  I personally don't think FICO is stumbling around in introducing a resiliency score at this precise moment.  As with any score, no smart lender will rely upon it in a vacuum and will continue to weigh other application information appropriately.  The score simply offers a lender the means by which to slice through marginal credit risks and preferentially select those who are evaluated more strongly by this "resiliency" measure.

 

The bottom line I see here is that with this added measure, some banks may be more willing to lend to "marginal" credit scores than absent it.  (But, no doubt, speaking as someone whose "resiliency" score comes up as only nominally above average, when applied to an individual the score's risk estimate will vary considerably from "reality".)

 

 

 

 

 

Edited by hdporter
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