Comments on: Bureaus Roll Out New Credit Score Formula for 2009 http://allfinancialmatters.com/2008/12/29/bureaus-roll-out-new-credit-score-formula-for-2009/ A personal finance blog dedicated to discussing such topics as budgeting, asset allocation, 401K, IRA, cash flow, insurance, financial planning, portfolio management, and other areas in personal finance. Sat, 11 Feb 2012 20:32:19 +0000 hourly 1 http://wordpress.org/?v= By: Phil Owens http://allfinancialmatters.com/2008/12/29/bureaus-roll-out-new-credit-score-formula-for-2009/comment-page-1/#comment-454750 Phil Owens Sun, 02 Jan 2011 17:10:26 +0000 http://allfinancialmatters.com/?p=3056#comment-454750 I agree with Tom McCullouch's comment from Oct '09. Why should credit reporting agencies be allowed to keep secret the formula they use to report our credit? This leaves room for all sorts of discretionary reporting based on who-knows-what. Fair Lending legislation should include a provision by which these calculations are "open" and anyone with credit report in hand can verify the accuracy of the score. I agree with Tom McCullouch’s comment from Oct ’09. Why should credit reporting agencies be allowed to keep secret the formula they use to report our credit? This leaves room for all sorts of discretionary reporting based on who-knows-what. Fair Lending legislation should include a provision by which these calculations are “open” and anyone with credit report in hand can verify the accuracy of the score.

]]> By: Jessica Bailey http://allfinancialmatters.com/2008/12/29/bureaus-roll-out-new-credit-score-formula-for-2009/comment-page-1/#comment-445155 Jessica Bailey Mon, 30 Aug 2010 04:34:57 +0000 http://allfinancialmatters.com/?p=3056#comment-445155 i always want to have a very good credit record but due to recession, that changed."* i always want to have a very good credit record but due to recession, that changed.”*

]]> By: Madison Brown http://allfinancialmatters.com/2008/12/29/bureaus-roll-out-new-credit-score-formula-for-2009/comment-page-1/#comment-443841 Madison Brown Tue, 25 May 2010 17:52:02 +0000 http://allfinancialmatters.com/?p=3056#comment-443841 i am not a fan of having credits and getting credits cards.'*: i am not a fan of having credits and getting credits cards.’*:

]]> By: tom mcculloch http://allfinancialmatters.com/2008/12/29/bureaus-roll-out-new-credit-score-formula-for-2009/comment-page-1/#comment-440359 tom mcculloch Sat, 31 Oct 2009 13:52:08 +0000 http://allfinancialmatters.com/?p=3056#comment-440359 I came to this article trying to find the actual algebraic formula that is used to arrive at the credit score. Once you know the old formula it is easier to see exactly what changed and how it impacts the "new" credit score. And if all 3 credit bureaus use the same formula and yet all 3 have slightly different scores, it leads one to think each bureau puts their own distictive "spin" on the exact same data reported by lenders. Exactly what is the formula(s) used??? Or is the resulting number they drive our credit-life by top-secret? I came to this article trying to find the actual algebraic formula that is used to arrive at the credit score. Once you know the old formula it is easier to see exactly what changed and how it impacts the “new” credit score. And if all 3 credit bureaus use the same formula and yet all 3 have slightly different scores, it leads one to think each bureau puts their own distictive “spin” on the exact same data reported by lenders. Exactly what is the formula(s) used??? Or is the resulting number they drive our credit-life by top-secret?

]]> By: Brian Patton, CCIM http://allfinancialmatters.com/2008/12/29/bureaus-roll-out-new-credit-score-formula-for-2009/comment-page-1/#comment-419133 Brian Patton, CCIM Thu, 07 May 2009 14:20:48 +0000 http://allfinancialmatters.com/?p=3056#comment-419133 No doubt that this change is to help those caught up in the mortgage debacle. Doesn't seem to help cash strong customers. Kudos to Doug's post. He's right on the inflation/dollar decline argument. The only bright spot in that is that real estate investors will see an increase in the "number of dollars" that their real estate is worth. This doesn't really translate into increased value though. Check out my article on this subject at: http://www.northfulton.com/Articles-i-2008-03-20-170780.112113_Experts_say_focus_on_bad_news_creates_crisis_of_confidence.html http://www.capitallistings.com No doubt that this change is to help those caught up in the mortgage debacle. Doesn’t seem to help cash strong customers. Kudos to Doug’s post. He’s right on the inflation/dollar decline argument. The only bright spot in that is that real estate investors will see an increase in the “number of dollars” that their real estate is worth. This doesn’t really translate into increased value though. Check out my article on this subject at:
http://www.northfulton.com/Articles-i-2008-03-20-170780.112113_Experts_say_focus_on_bad_news_creates_crisis_of_confidence.html

http://www.capitallistings.com

]]> By: Delawrenceblue http://allfinancialmatters.com/2008/12/29/bureaus-roll-out-new-credit-score-formula-for-2009/comment-page-1/#comment-400324 Delawrenceblue Mon, 02 Feb 2009 08:40:21 +0000 http://allfinancialmatters.com/?p=3056#comment-400324 The 2009 improvements to FICO scoring system are great. I own shares in Citigroup and I hope now they can start making money again. The problem we have in America is one of lack of knowledge one how to properly use credit. Credit should be used carefully and all the risks factors should be understood. The 2009 improvements to FICO scoring system are great. I own shares in Citigroup and I hope now they can start making money again. The problem we have in America is one of lack of knowledge one how to properly use credit. Credit should be used carefully and all the risks factors should be understood.

]]> By: Dan http://allfinancialmatters.com/2008/12/29/bureaus-roll-out-new-credit-score-formula-for-2009/comment-page-1/#comment-397217 Dan Thu, 15 Jan 2009 17:07:28 +0000 http://allfinancialmatters.com/?p=3056#comment-397217 Kitty is spot on. I don't see what the hub-bub is about. Increased attention to the utilization numbers is appropriate IMO. Utilization is your debt divided by your credit limits. The denominator gives a great indication of banks' opinions of your creditworthiness, and the numberator gives a great indication of how you've used that credit. Bravo to the credit bureaus on rewarding those of us who don't max out our cards! As for the new policy of ignoring collections accounts under $100 - I don't loudly object, but I think perhaps lowering the weighting would have been more appropriate than ignoring such accounts completely. I don't see creditworthiness in somebody who took advantage of free cable tv for a couple of months by simply not paying the bill until it was turned off. It should be a mark on their credit, although I can understand why they wouldn't want it to be as big of a mark as larger delinquencies. Kitty is spot on.

I don’t see what the hub-bub is about. Increased attention to the utilization numbers is appropriate IMO.

Utilization is your debt divided by your credit limits. The denominator gives a great indication of banks’ opinions of your creditworthiness, and the numberator gives a great indication of how you’ve used that credit. Bravo to the credit bureaus on rewarding those of us who don’t max out our cards!

As for the new policy of ignoring collections accounts under $100 – I don’t loudly object, but I think perhaps lowering the weighting would have been more appropriate than ignoring such accounts completely. I don’t see creditworthiness in somebody who took advantage of free cable tv for a couple of months by simply not paying the bill until it was turned off. It should be a mark on their credit, although I can understand why they wouldn’t want it to be as big of a mark as larger delinquencies.

]]> By: kitty http://allfinancialmatters.com/2008/12/29/bureaus-roll-out-new-credit-score-formula-for-2009/comment-page-1/#comment-393758 kitty Wed, 31 Dec 2008 04:16:18 +0000 http://allfinancialmatters.com/?p=3056#comment-393758 "Dave Ramsay refers to the FICO score as the “I love debt” score. I think I understand why now. The more you charge and go into debt, as long as you pay it off eventually, the better your score." Hello? The more debt you have the higher your utilization ratio (ratio of debt to available credit). Higher utilization = lower score. This is elementary school math. The formula may have a bug or two regarding handling of paid off mortgages but the effect is minor. But as to the rest of it - you don't need to carry balances to have a good score. In fact, if you pay your balances in full, your score is higher. “Dave Ramsay refers to the FICO score as the “I love debt” score. I think I understand why now. The more you charge and go into debt, as long as you pay it off eventually, the better your score.”

Hello? The more debt you have the higher your utilization ratio (ratio of debt to available credit). Higher utilization = lower score. This is elementary school math.

The formula may have a bug or two regarding handling of paid off mortgages but the effect is minor.

But as to the rest of it – you don’t need to carry balances to have a good score. In fact, if you pay your balances in full, your score is higher.

]]> By: Jon http://allfinancialmatters.com/2008/12/29/bureaus-roll-out-new-credit-score-formula-for-2009/comment-page-1/#comment-393659 Jon Tue, 30 Dec 2008 19:05:53 +0000 http://allfinancialmatters.com/?p=3056#comment-393659 Chase just increased my credit limit about 30%. I thought it was just random because I only use about 10% of my limit. Maybe they're looking out for my credit score. Thanks Chase! Chase just increased my credit limit about 30%. I thought it was just random because I only use about 10% of my limit. Maybe they’re looking out for my credit score. Thanks Chase!

]]> By: sam http://allfinancialmatters.com/2008/12/29/bureaus-roll-out-new-credit-score-formula-for-2009/comment-page-1/#comment-393657 sam Tue, 30 Dec 2008 18:59:48 +0000 http://allfinancialmatters.com/?p=3056#comment-393657 Dave Ramsay refers to the FICO score as the "I love debt" score. I think I understand why now. The more you charge and go into debt, as long as you pay it off eventually, the better your score. Dave Ramsay refers to the FICO score as the “I love debt” score. I think I understand why now. The more you charge and go into debt, as long as you pay it off eventually, the better your score.

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