(Before I go on my tirade, I bought my FYCO score on myFICO.com with a 30% off coupon, promotion code: SURVEY30. If any of you are looking to get your scores, hope this code works for you as well.)
After my self-congratulatory post last Friday about paying off my cc debt, I admit I was feeling mighty smug that my FYCO score would be darn awesome. (After all, my CreditKarma score is 801!) But instead, I got a cold splash of reality last Friday when I learned my new FYCO score is:
The last time I got my FYCO score in May, it was 723.
Granted, the last FYCO score was based on Equifax's data and this credit score is based on TransUnion's data. But the data is pretty consistent between the two. You could also argue that the difference between 719 and 723 is de minimis, but here are several reasons why I think this whole FYCO scoring system is bogus:
1.) Paying Off My Huge Revolving Credit Card Debt Did Bupkis
One of the negative issues in May was that I was using too much (i.e., 18%) of my available credit limit. I didn't disagree with this negative mark since I had over $11k+ in credit card debt at the time. But as you know, I paid that debt off in October and am now only using 2% of my available credit limit.
Considering the fact that FYCO claims "usage ratio" plays a big factor in its secretive scoring formula, paying off a huge cc debt didn't do me much good. Do you want to know what FYCO is nit-picking about now?
I allegedly have too many accounts (11) with balances. First off, 6 of the 11 accounts are my student loans. The remaining 5 accounts only have balances between $26 to $1,613, which I already paid off in full this month.
In case you were wondering why I have 5 accounts with balances, it's because I'm splitting my cc usage over multiple cards so that I don't get dinged with "inactive" penalties like fees, reduced credit limit or outright cancellation by the cc companies.
Bottomline - - If I don't use my cards, I get penalized with fees and reduced limits by the cc companies, but if I use my cards responsibly, FYCO beats me up for it. Lovely!
2.) FYCO's Infernal (and Eternal) Scarlett Letter
I was always under the belief that a bad credit rating doesn't stick around forever. I believed that negative information (such as late payments) would fall off 7 years from the date the payment was late. Boy was I wrong! Apparently, FYCO still takes that information into consideration. For example:
TransUnion's data on one of my account indicates:
Seven year payment history
|30 days late||0 times|
|60 days late||0 times|
|90+ days late||0 times|
But guess what? It also says:
|90 days past due|
|The Worst Delinquency reports the worst missed payment status that has been documented on this account. Your FICO® score evaluates how recently that missed payment occurred and in general, the more recent, the more impact it has on your score. However, the fact that it occurred is still predictive of future payment risk and could be considered by your FICO® score.|
I guess my late payment history WILL haunt me forever and ever. It reminds me of this tasteless joke:
This Scottish farmer walks into the neighborhood pub, and orders a whiskey.
"Ye see that fence over there?" he says to the bartender. "Ah built it with me own two hands! Dug up the holes with me shovel, chopped doon the trees for the posts by me ownself, laid every last rail! But do they call me 'McGregor the Fence-Builder?' No..."
He gulps down the whiskey and orders another. "Ye see that pier on the loch?" He continues, "Ah built it me ownself, too. Swam oot into the loch to lay the foondations, laid doon every single board! But do they call me 'McGregor the Pier-Builder?' No."
"But ye #$&! just ONE lousy sheep ..."
3.) FYCO Simulator is a Joke
Here's a joke: FYCO's simulator claims I can dramatically improve my score to 779 to 819 if I pay off 90% to 100% of my credit card balances! Uhhhhh... Yeah, sure.
Considering that my elimination of $11k in cc debt didn't do me much good, I doubt paying off my current credit card balances of <$2,000 in full every month will dramatically increase my score by about 60 to 100 points. Yeeeahhhhh....
And here's another sick joke: Back in May, FYCO's simulator predicted my score would increase to 723-763 if I paid off my $11k+ credit card debt within 6 months. Ummmm.... it's been 6 months and I paid off that debt. But my FYCO score did a backslide instead. What gives?
I am now pretty discouraged that I will forever have to live with a "below average" credit score. Perhaps I should rename this blog to "Hester Prynne's PF Blog"...