Christine
M0ri4rty, I'm starting a new topic and copy some excerpts on the subject.
"Do you have a reference on the myfico site or anywhere else that comes from FICO?
If they do, it represents a change from how I understood they were doing things when I worked at Experian. And it doesn't make any sense. A closed revolving trade acts like more like an installment loan since you can't charge any more to it. Certainly, revolving trades with a zero balance can't count toward the balance to limit ratio; most people have a number of closed trades with zero balances on their reports, so the balance to limit ratio would become useless as a predictive attribute. So the only way I can see that what you're saying could be true is if a closed revolving trade counted until its balance was paid off. But that would mean that as soon as it was paid off, the score would instantly drop!
I've got a bunch of data with FICO scores from our take-one business, so I will check it out and see whether the evidence favors one of these scenarios. If anyone has a closed revolving trade with a balance, please weigh in with what happens to your score when you pay it off."
Of course I don't have anything from Fair Isaac other than their explanations for the Beacon scores.
Account 1 - MBNA closed due to CCC:
Reported as closed, FORTUNATELY the limit was still reported as 15K, and it was paid down to a $6,633. I ran the numbers and both the limit and the balance were included in the ratio.
WITH the MBNA account the B/L was 35%, without 13%
From the posting to my client:
"I went through the effort of calculating this for two reasons:
1) It's now the second score lowering reason, would be the first one without the collection. 35% doesn't sound bad, but it is.
2) Wanted to make sure it counts the CLOSED MBNA account. Don't know how scores would count the balance if they reduced the limit to zero as most lenders do when they close an account."
That leaves the question, WOULD Fair Isaac include the account IF the limit was ZERO?
Account 2: Capital One charge-off
This one is already public, so feel free to have a look:
http://forum.creditcourt.com/discus/messages/346/333.html
I posted screenshots of the online report as well as the Beacon details and the score explanations.
Since there were NO other revolving accounts on the report, there wasn't much calculating to do :)
I have found that Fair Isaac's software is quite inconsistent, things are often NOT as Fair Isaac claims, and it sure doesn't make sense to me to include closed accounts and charged off accounts in the B/L ratio.
Obviously it takes a ton of time to really look at all these details and then get them ready for publication. If I had the time, I could have literally hundreds of these pages.
"Do you have a reference on the myfico site or anywhere else that comes from FICO?
If they do, it represents a change from how I understood they were doing things when I worked at Experian. And it doesn't make any sense. A closed revolving trade acts like more like an installment loan since you can't charge any more to it. Certainly, revolving trades with a zero balance can't count toward the balance to limit ratio; most people have a number of closed trades with zero balances on their reports, so the balance to limit ratio would become useless as a predictive attribute. So the only way I can see that what you're saying could be true is if a closed revolving trade counted until its balance was paid off. But that would mean that as soon as it was paid off, the score would instantly drop!
I've got a bunch of data with FICO scores from our take-one business, so I will check it out and see whether the evidence favors one of these scenarios. If anyone has a closed revolving trade with a balance, please weigh in with what happens to your score when you pay it off."
Of course I don't have anything from Fair Isaac other than their explanations for the Beacon scores.
Account 1 - MBNA closed due to CCC:
Reported as closed, FORTUNATELY the limit was still reported as 15K, and it was paid down to a $6,633. I ran the numbers and both the limit and the balance were included in the ratio.
WITH the MBNA account the B/L was 35%, without 13%
From the posting to my client:
"I went through the effort of calculating this for two reasons:
1) It's now the second score lowering reason, would be the first one without the collection. 35% doesn't sound bad, but it is.
2) Wanted to make sure it counts the CLOSED MBNA account. Don't know how scores would count the balance if they reduced the limit to zero as most lenders do when they close an account."
That leaves the question, WOULD Fair Isaac include the account IF the limit was ZERO?
Account 2: Capital One charge-off
This one is already public, so feel free to have a look:
http://forum.creditcourt.com/discus/messages/346/333.html
I posted screenshots of the online report as well as the Beacon details and the score explanations.
Since there were NO other revolving accounts on the report, there wasn't much calculating to do :)
I have found that Fair Isaac's software is quite inconsistent, things are often NOT as Fair Isaac claims, and it sure doesn't make sense to me to include closed accounts and charged off accounts in the B/L ratio.
Obviously it takes a ton of time to really look at all these details and then get them ready for publication. If I had the time, I could have literally hundreds of these pages.