FICO - your credit score/rating....What is FICO/what does it stand for

[Mind_your_head]

and most importantly, because *I* can't find it....what are the origins of FICO?

[eggplant]

1. ahh, one of the hidden joys of Google

(search for "define:fico")

http://www.google.com/search?sourceid=navclient&ie=UTF-8&rls=GGLG,GGLG:2005-28,GGLG:en&q=define%3Afico

2nd hit:

FICO is a mathematical model created by the Experian credit bureau as a tool for lenders to use in evaluating the risk associated with lending you money. FICO stands for Fair Isaac Company, the company that created the original scoring model. (More Info)
http://www.bankturndown.com/glossary.htm
http://www.bankturndown.com/fico_scoring.htm

[WillyT]

2. Google Is Your Friend...

<snip>

A FICO score is a credit score developed by Fair Isaac & Co. Credit scoring is a method of determining the likelihood that credit users will pay their bills. Fair, Isaac began its pioneering work with credit scoring in the late 1950s and, since then, scoring has become widely accepted by lenders as a reliable means of credit evaluation. A credit score attempts to condense a borrowers credit history into a single number. Fair, Isaac & Co. and the credit bureaus do not reveal how these scores are computed. The Federal Trade Commission has ruled this to be acceptable.

<snip>

More: http://www.mtg-net.com/sfaq/faq/fico.htm

Enjoy!

:hi:

[GrumpyGreg]

3. Fair Isaac Corp====a private firm,not government.

They are a curse IMHO.

[Roland99]

4. And the best place I've come across learning about how to fix your report:

http://creditboards.com/forums/index.php?showforum=29

[Mind_your_head]

5. My 'paper' sources tell me that......

FICO stands for "Fair Isaac Credit Organization"

.....hmmmm, don't blow me off here....think about this before you reply.

I'm still curious about the origins of the FICO "organization".

[harpo]

6. suze tells about it...

http://www.myfico.com/

[Mind_your_head]

7. Yep, I've seen that webpage.....

....flashy, nice.

What are the origins? History? People behind it?

[harpo]

9. suze has a show on cnbc about money stuff...she talks about

a lot of money related things including credit scores.

[VPStoltz]

10. Suze obviously don't know shit...

Suze recommends in one of her books to close all but two of your credit accounts. WRONG, WRONG, WRONG! If you have what is considered too many accounts closing them will do you no good. The closed accounts stay on your report and are counted as part of your history. Leaving them open, if even inactive, is better because strangely enough, they provide you with credit history if they are in good standing.

[Mind_your_head]

11. ehm, I'm suggesting that you get off this 'credit grid'.......

....and "Who are these guys ~ FICO ~ anyways"????

Peace

[harpo]

12. that's not what she says on tv

[VPStoltz]

16. I suppose it's because she wants you to buy the second book

she wrote that tells a third story. Or one could pay $50 for her sure fire credit score cure.

[VPStoltz]

8. Oh my God!!!!!!!!!

I go absolutely balistic when I see the works "credit score." The entire thing is a SCAM of the highest order. The scores are based on nothing really relating to your use of money or credit and most credit score contain so many errors (most likely purposely put there) that they have to relevance. It will take you months, maybe years, to correct errors that will effect your credit, insurance rates, etc. Now if someone wanted to do something the American consumer, it would be to outlaw the use of credit scores.
Can you tell I speak from experience?

[harpo]

13. well you sort of need good credit to buy things without cash

[ProdigalJunkMail]

14. actually the calculation of your credit score

has to do with specifically your use of money. The numeric assigment given you by the credit score takes into consideration many factors...all of which are use of money...and more specifically, use of credit (or lack thereof)

Number of accounts open
Number of accounts closed (and the REASON they were closed)
Available credit
Percentage of available credit used
Over limit accounts
Time on open accounts
Late payments
Severity of late payments (30, 60 and 90 days past due)
Defaults
Bankruptcy
and many more

While I will agree with you that errors can be numerous on your accounts, the procedure for clearing those errors has gotten better over the years.

So, how do you see it as a scam since all of the things above are most certainly indicative of your use of money and credit?

sP

[VPStoltz]

15. In my own experience, it smells to me...

For instance: why doesn't the score change when errors are corrected? My didn't.
Chase erroneous reported a delinquency - which from my research is a BIG no no, but when it was corrected, the score didn't change.
My auto insurance stay high NOT because I have ever filed a claim in 20 years but because errors on my report tell them that I am a risk! Previous to that insurance company using credit/insurance scores, I had a flawless record with it and was considered an ideal policy holder.
Why doesn't the score change when loans are paid off? Mine didn't.
Why does it keep asking me about my mortgage when I don't even own a home?
I've had a credit card since I was in my twenties - I'm 53 now. I have what is considered insufficient history.
Now you tell me that scores are not manipulated for the benefit of the loan and insurance industry. There is NO way I can believe that.

[ProdigalJunkMail]

17. well, as I have direct knowledge of this

I can safely say that you need to speak to the people AT ONE OF THE CREDIT REPORTING AGENCIES to find out how your score is working that way because yours is the only one in history that does not change based on the things you have indicated (and if it isn't then you have a lawsuit on your hands that could mean you don't need to worry about your credit any more).

A couple of points :
1) Chase reported a delinquency that was in error...you got it cleared...while it is a nuisance, errors do happen and it sounds like the mechanism in place for correcting it worked for you.
2) You cannot blame the credit reporting agencies for what your insurance company does with the data...fire the insurance company if you are that dissatisfied.
3) If you are paying of loans that are a small percentage of your debt/income ratio that could be an explanation for the lack of change in score. Also, it takes at least one month from the date of payoff for that information to be reported and calculated (sometimes up to one quarter).
4) Your credit score does not ask you about a mortgage. It is beginning to sound as if you are using a service that claims to be able to calculate your score for you. If you are checking with the companies like Experian to get your credit score, they would not ask you any questions other than verification questions about who you are. Credit reporting agencies KNOW you have no mortgage.
5) A 33 year credit history is more than sufficient. Once again, it sounds like you are using a service and not going directly to the reporting agency.

In every instance I have ever worked on, when corrections and payoffs and closing old accounts has always affected the scoring. Heck, mine jumped over 40 points just by having an error removed...took about 2 months to show...but it was changed.

Sorry you cannot believe that, but the formula is the formula. You may feel that it assigns weights to things such as delinquencies unfairly, but that does not mean it is discriminating on anything other than the use of your credit. Math does not lie (and if you can prove they are playing with YOUR score...then you have them).

subjectProdigal

[LostinVA]

18. VPStoltz is correct

Within the last year, both my student loan and car loan were paid off. No change in score. I had several false late payments for the student loan, and had t6hem corrected. No change. I now own a house. No change. I had several false delinquent accounts -- things I've NEVER even had... got them removed. No difference.

I call, I write, etc. Nothing ever happens.

I know other people who have had the same problems, including my SO.

It IS a scam. And, it drives me bonkers.

I understand what you're saying about the formula, etc... but that unfortunately doesn't mean that the credit agencies are doing a correct -- or even a mediocre -- job. They frankly suck, but yet hold so much power over our lives. If I did my job like THEY did, I would so be fired. All of us would!

[ProdigalJunkMail]

19. i agree they suck

and due to the fact that we are not their consumers (companies who loan money are) they are not very beholden to us to get the system fixed. There are however laws in place to deal with the issues that you are mentioning. In your state you can contact the Office of Consumer Affairs (or some such office) report the problem and generally get some traction.

Good luck,
sP

[WestSeattle2]

20. FICO score manipulation....

My FICO score does change, in fact I just raised it from 729 to 749 by paying off the balance on an old credit card. However, I don't close old accounts, the reason why is that your FICO score is based in part, on the percentage of available credit you use. For example:

You have two credit cards. One with a $5,000 limit and one with a $7,500 limit. The balance on the first card is $3,500, or 70% of the available credit limit. The balance on the second card is $6,000, or 80% of the available credit limit. Combined, you are using 76% of your available credit.

Both of these percentages are way too high. You should always try to keep the percentage of credit you use, under 30% of your available credit.

So you get busy and pay off the first card. You feel good! You close the account! However, your FICO scores go DOWN. Why? Because now the outstanding balance on your remaining card has brought the percentage of outstanding credit available, UP to 80%! Before you closed the one account, your available credit was $12,500 and you owed $9,500, or 76% of your available credit.

Also, credit card companies report credit limits to the credit bureaus, EXCEPT Capital One and American Express. How then, can FICO calculate the percentage factor mentioned above, if they are not told what the credit limit is?

Well, whatever balance is reported to the bureau by Capital One and AMEX, is considered the limit! That means if you carry cards from either of those companies, FICO says you are using 100% of your available credit.

My goal is to have one credit card with a $5,000 limit, and keep the balance between 0-$1,000.