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What’s this new Fico 10 everyone keep talking about?


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FICO 9 hasn't exactly been widely adopted, and here comes 10.

 

Most of what you read about new FICO models fails to address the fact that however the new score is calculated, there is zero impact to your life if no one that matters to your credit-seeking adventures uses it...  

 

Edited by cv91915
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2 hours ago, Killbadcredit said:

So why everyone making a big deal about it? Something about if your at 680, it will help you if your lower then this number it will drop you more?

Who is "everyone"? 
 

Don't lose sight of the fact that Dancing With the Stars lasted 29 seasons, which also helped no one get a mortgage, a credit card or an auto loan.

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2 hours ago, Killbadcredit said:

Hey credit boards, I keep hearing on this fico 10 coming out. They say that creditors can look back 2 years, etc etc?

 

Why is this a big deal?

 

FICO  10 adds the evaluation of "trended data" to the credit score formula.  That simply means that it identifies trends, such as the accumulation and/or repayment of credit card balances and the possible swap of accumulating credit card debt with a personal consolidation loan.  To the extent that these new data points correlate with behavior of consumers in general in advance of a debt default, your credit score will be impacted accordingly.

 

I wouldn't term this a "big deal"; rather just a refinement.

 

As @cv91915 suggests, there are bigger things to sweat.  Judging from the gradual adoption of FICO 8, it will be years before creditors adopt FICO 10 to any significant extent.  And I suggest that you don't trust any generalizations you read.

 

 

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"FICO 10" doesn't included trended credit data, but a variant called FICO 10 T does.  

 

Here's an overview of the new models, from Experian:

 

https://www.experian.com/blogs/ask-experian/fico-10-score-changes-what-it-means-to-your-credit/  

 

I chose this particular link because it contains the standard logical trap door that should have been avoided.  This statement is incredibly misleading...

 

Read on to find out how and why your FICO® Scores  could change later this year. 

 

This is misleading because when average people read it they think they'll suddenly be more (or less) creditworthy, when in reality it will be years (if ever) before they will encounter a credit grantor that will use the score model in question to make a decision on an application or to set account terms.

 

 

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FICO 10T with its trended data is similar to Vantage V4.  If you have a SyncB account, you get a V4 score.  I still have derogs but they are now falling off month by month and my V4 score has jumped 150 points and is now 70 points higher than My TU FICO 08 (680 vs. 750).  When that last unpaid CO goes away in a couple months, my TU F08 will likely be 800 or so but who knows what a trended score will be going forward with <1% UTI.    I would bet that if it were the other way around and I had increasing balances, it would be the inverse situation score wise with V4 (and F10T) dropping like a stone. 

 

Who knows if it will matter, depending on who uses it.  I can see lenders like PenFed salivating over F10T as they traditionally hate those with rising debt (the Egyptians).

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One of the factors FICO 10 T uses is monthly payments, not just balances. This makes it easy to separate out transactors (people that PIF) v people that carry balances. Reporting payments made, and not just balances, provides a lot more useful data. For instance someone that normally puts all their monthly recurring bills on a CC may report monthly balances that are stable and even increasing gradually. But this could be someone that has run up a balance and makes minimum payments while adding a few charges or it could be someone that pays in full but incurs the repeating charges (rent, utilities, cable, insurance, etc.). Big difference in credit risk. But without reporting payments made impossible or difficult to discern which pattern a consumer is in. Hence the change almost 10 years ago to add "payments made" to credit reports.

 

The problem is that it's optional. When CRAs first started doing this most creditors provided the info.

 

Then they stopped.  The last one that reported for me was Walmart. Then they sold the accounts to Cap One. Currently, none of my creditors report payments made. This guts one component of FICO 10 T.

 

Why? Possible reasons:

 

1. It provides info for other companies to go after their customers. Like Amex which prefers PIF consumers.

2. It's one more piece of data that a consumer can claim is erroneous to achieve a delete on a bad account.

 

Any ideas?  What creditors do you people have that are reporting payments made?

 

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On 12/26/2020 at 6:57 PM, Killbadcredit said:

I agree with you all, I guess that shows me for trusting things I read.

Nothing wrong with reading...just take into account where the commentary is coming from on WHAT you read.  There are many forums populated by idiots that freak out over things of no real importance.  Any forum freaking out over FICO10 falls into that category...

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5 hours ago, centex said:

Nothing wrong with reading...just take into account where the commentary is coming from on WHAT you read.  There are many forums populated by idiots that freak out over things of no real importance.  Any forum freaking out over FICO10 falls into that category...

 

If only it was just the forums that were prone to "sky is falling" posts ... there seem to be a large number of news sites/blogs/etc that love to sensationalize what should otherwise be "matter of fact" credit-related reporting.

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