Comments on: FICO Psycho

By: Sven

Sven — Tue, 29 Jan 2008 23:06:22 +0000

Been doing this since long before credit scores. In my experience most peoples’ stories about lates being erroneous about untrue. The computer is picking up on some risk. Generally people who have store cards (Macys) – rather than just 1-2 major credit cards- spend too much. Statistically, inquiries for a person like her could mean she’s on the verge of a spending spree at the casino. Realistically, even if you accomplish this cash-out consolidation refi, do you expect that if you checked back in 6 months she’d have remained debt-free? Doubt it. She’ll have four more store cards opened so that she could save $10 on purchases at each one.

Anyway, do an LTV/CLTV of 70/80 using a local bank to do the new simultaneous 2nd. You avoid the price hits for c/o and for credit score. And if the local bank doesn’t like giving her 80CLTV with her credit profile, what does that tell you?

By: mikew

mikew — Tue, 29 Jan 2008 12:37:33 +0000

I agree with S Hallman. Its clearly time that the lending (and investor) community stop depending on fico scores as a major factor in underwriting.

A real human underwriter can not be replaced by a fico score.

By: Rhonda Porter

Rhonda Porter — Tue, 29 Jan 2008 01:04:41 +0000

Did she close the Macy’s account too? It’s a sucky situation, no doubt…

By: S Hallman

S Hallman — Mon, 28 Jan 2008 14:54:46 +0000

Wow! The computer strikes again. Why does whoever came up with credit scores think underwriters are too inept to underwrite a credit report? I say do away with the stupid computer model generated numbers and go back to the day when a human determined the future credit worthiness of a borrower based on past behavior – not 679 vs 680!!!!!!

By: Ricardo Bueno

Ricardo Bueno — Sun, 27 Jan 2008 21:13:48 +0000

Matthew,

Today is a great day! In fact this week has been pretty great too, despite the rain!

As I’m reading this…I’m suddenly P*SSED off!!!

Now, my recommendation is…go hit a punching bag for a bit, take various deep breaths, and get back on the phone with them on Monday(tomorrow).

By: chad

chad — Sun, 27 Jan 2008 20:04:10 +0000

This has been this way for a while. Basically you’re reactivating the bad debt so that’s why it’s getting poorly reported. I just had a client that we had to instruct to NOT touch his outstanding debt until we closed the loan. Of course when he tries to make good on the debt it will lower his score, go figure.

By: Toby

Toby — Sat, 26 Jan 2008 23:40:53 +0000

You didn’t say what the alledged balance, high balance and credit limit was on the Macys card. Believed it or not you are better off carrying about a 30% balance on your cards with only a few ate pays than paying it off every month. This of course assumes that your capacity to pay that 30% balance does not impact your loan application.

It is possible that when Macys corrected her account that the FICO saw that there was no balance on the card and scored that more negative than the one late pay with a relativley higher blance. I know, its nuts, but the capacity to manage (even with a few dings) a credit balance(s) is scored higher than paying them off every month (like I do ).

By: Rob Dawg

Rob Dawg — Sat, 26 Jan 2008 23:14:58 +0000

[sorry, bad character choice. repeating]

Reap what you sow. No, not you personally but the industry. Fair Isaac has been hurt by the process of credit repair recently. You just repaired credit. See the problem? Remember also the unmentioned problem. They don’t say it but inquiries cost 1, 2 sometime more points per inquiry. You set off a flood of inquiries. Not condoning, just explaining.

By: Rob Dawg

Rob Dawg — Sat, 26 Jan 2008 23:12:25 +0000

Reap

By: Mark

Mark — Sat, 26 Jan 2008 22:55:42 +0000

Yet another indicator that we’re nowhere near the bottom of this credit bubble. When that day comes, things like this will NOT happen.

Sorry for your suffering though.