CarefulBuilder14 wrote:I was browsing on myfico (I'm not registered there yet, so don't look for me) and I saw a few people who report in their signatures that their FICOs rise from about 570 or 600 up 70-100 points in a month or two. How is this possible?
I expect some changes could come from successful disputes or negotiating a deletion. It would have to mean quite a few late payment marks were coming off, though.
A bankruptcy falling off could explain it, but not the frequency with which I see it.
Could it be inquiries from a major app spree falling off? Finally paying off a seriously delinquent account?
It affects all three bureaus - including EX.
I guess I should register and ask the individuals there, but I was wondering if there was one major cause of this or anything like that. Perhaps those people have just started to rebuild their credit and are just going for the low-hanging fruit in terms of disputes or getting a healthy history on a new secured card?
If you look up the components in the FICO formula, there can only be two things which can cause that dramatic of an increase- credit history and utilization. Credit history is around 35% on average and utilization is around 30%. So even having a lot of inquries fall off all at once can't really move your score all that much. I don't even think it's baddies falling off at the end of their "natural" life(seven years) because by then, their effect on your score isn't all that much. I suspect the major jumps in scores on FICO can be explained by either pay for deletes, a thin but perhaps not-so-good file all of a sudden reporting positive activity, or people decreasing their utilization by going on major app sprees.
No one really knows the exact FICO algorithm, but I've been all over the scale at some point in my 2 decades plus credit history. The best I can figure out is that it is a lot easier to increase your score dramatically if it is poor to begin with. Someone with a 600 score can get to 700 a lot easier than someone who is at 750 can get to 800. I don't know if you are a baseball fan, but here's an analogy: You start the first six weeks of baseball season with a major slump- your bating average is .150. All of a sudden, your bat catches fire and over the next week you bat say 3 for 4 or 4 for 5 every game. Your batting average is now .250 because you almost double the amount of hits. Someone else who had the same kind of week was .350 before the week but only went up to 380. Of course, if you are batting .150 later in the season, you're not going to see that huge of a jump no matter how good your hitting streak is. So bad credit which all of a sudden shows good activity goes up dramatically especially if it is thin (ie "early in the season").
Conversely, someone with an excellent credit score who has negative information added is going to have a huge drop in their score while someone with a really bad score might not even be affected by yet another late payment. Heck, I've even heard of people with a bankruptcy have their score go up
once it starts showing on their report.
In my Wallet:
Sometimes in my Wallet:
- Amex PRG NPSL[3-14, bd 91]
- Sallie Mae MC $8000[1-14]
- Chase Freedom $4700[1-14]
- Discover It $2750[8-13]
- BoA UCF Alumni Cash Rewards $5000 [3-15]
- GM BuyPower WEMC $5000[9-14]
- Wells Fargo Propel 365 Amex $7000[4-14]
- Barclaycard Arrival WEMC $7000[3-14]
- BoA Better Balance $3000[2-15]
In my sockdrawer: Amex BCE $1000[10-13, bd 91], OCCU Duck $10000 [11-13], The Sportsman's Guide Visa $8000[8-14], Chase Slate $4000 [9-14]Delta Gold Amex $2000 [2-15 bd 91], Diners Club MC $20000 [10-14] Commerce Bank Visa $2000 [3-15] Citi Double Cash $1000 [3-15]
Total CL: $90450