Fast ways to improve Credit Score?

[ford91exploder]

I’ve built models for a living. They do matter. Financial companies use in house custom models. No one relies on off the shelf FICO models anymore to make decisions.

Here’s an extreme example. SoFi uses your social media profile to come up with part of your score. One piece of data they use is where your friends live. How many live in the same state as you? They can use this to figure out your propensity to move. It’s more difficult to skip trace someone that moves a lot. If you have more out of state than in state friends it also speaks to how stable you are. Another piece of data they use is how many laundromats are close to where you live. This has gotten them into trouble recently.

Actually NOT having a social media profile may be helpful because some of the custom models utilize your Facebook' friend's credit scores to determine YOUR creditworthiness on the assumption if you have a lot of friends with poor credit you will have those same habits. The credit industry is going gaga over the Chinese social credit system, Where in reality they should be working on accuracy and data/identity protection.

https://money.cnn.com/2013/08/26/technology/social/facebook-credit-score/index.html

 

[RamblingMad]

Models for credit scoring? That's interesting. Do the companies providing the reason for their decisions to customers including the information you mentioned? Is that for decisions on credit cards, mortgages, auto loans, etc., or a specific type of loan?

I haven't ever noticed my credit score going down with moving. I just moved, and we move often. I'll monitor and watch it and see how it goes.

Financial companies are required to send you a document listing a couple of bad things in your credit.

 

[RamblingMad]

What if you don't have social media? Then what? And how do they account for people who move frequently as part of their jobs? That sounds really problematic.

It’s a model. They’re not perfect. The less interaction you have with the lender in person, the more likely they’ll use all sorts of data to model your credit and check for fraud.

If they move around for their job, their employer wouldn’t change. However, you’ll have more recent utility inquiries. And you’ll likely have a higher credit utilization due to costs not covered by your employer for your move.

 

[RamblingMad]

Actually NOT having a social media profile may be helpful because some of the custom models utilize your Facebook' friend's credit scores to determine YOUR creditworthiness on the assumption if you have a lot of friends with poor credit you will have those same habits. The credit industry is going gaga over the Chinese social credit system, Where in reality they should be working on accuracy and data/identity protection.

https://money.cnn.com/2013/08/26/technology/social/facebook-credit-score/index.html

Data sources exist for checking for identity and fraud. This is a separate model from your credit model. It’s super important for online lenders that don’t see their customers in person.

 

[ford91exploder]

Data sources exist for checking for identity and fraud. This is a separate model from your credit model. It’s super important for online lenders that don’t see their customers in person.

These I'm aware of the social media is being added although California is trying to derail the 'guilt by association' model exemplified by Facebook friends, Social media is definitely being used in automobile rate calculation however. Social Media is a two edged weapon and it's rapidly being weaponized against consumers if you think the things you set to 'private' are I have a bridge to sell you. Facebook happily sells all your postings and friends to anyone who will pay the rate on the rate card for them. The iron law of Internet economics - If something is free YOU are the product.

 

[RamblingMad]

These I'm aware of the social media is being added although California is trying to derail the 'guilt by association' model exemplified by Facebook friends, Social media is definitely being used in automobile rate calculation however. Social Media is a two edged weapon and it's rapidly being weaponized against consumers if you think the things you set to 'private' are I have a bridge to sell you. Facebook happily sells all your postings and friends to anyone who will pay the rate on the rate card for them. The iron law of Internet economics - If something is free YOU are the product.

At Facebook the user is the product, not the customer.

 

[DLgal]

It’s a model. They’re not perfect. The less interaction you have with the lender in person, the more likely they’ll use all sorts of data to model your credit and check for fraud.

If they move around for their job, their employer wouldn’t change. However, you’ll have more recent utility inquiries. And you’ll likely have a higher credit utilization due to costs not covered by your employer for your move.

But at what point do they invoke these minute details? Are we talking about people with borderline FICO scores who get this deep dive? People trying to borrow a million dollars for a small business loan? Who, specifically, triggers this kind of layered inquiry?

If the three main credit reporting agencies show scores above 800, with a long credit history with no delinquencies at all, not even one late payment, and a solid employment history with stable income, does a lending company REALLY go "hmm...not sure about this person, let's see who he is friends with on Facebook?" Seems like wasted time and money to me, unless the person is seeking a GIANT loan.

 

[The WDW 3]

I just spoke with my bank, and they did say that any increase to my credit limit would come with a hard inquiry. So, I passed on that.

 

[jen7233]

Financial companies are required to send you a document listing a couple of bad things in your credit.

Right, and usually on a denied credit card it's been something in the category of what is published that go into credit scores I've heard of. Inquiries amount, credit limits, number of accounts, length of history, etc. So, behind the scenes there is another model of a social media score for what instances of issuing credit? Genuinely interested. I have heard the general topic come up of social scores in other aspects, just very peripherally about it on occasion when news reading.

 

[ford91exploder]

But at what point do they invoke these minute details? Are we talking about people with borderline FICO scores who get this deep dive? People trying to borrow a million dollars for a small business loan? Who, specifically, triggers this kind of layered inquiry?

If the three main credit reporting agencies show scores above 800, with a long credit history with no delinquencies at all, not even one late payment, and a solid employment history with stable income, does a lending company REALLY go "hmm...not sure about this person, let's see who he is friends with on Facebook?" Seems like wasted time and money to me, unless the person is seeking a GIANT loan.

no humans are generally involved in the process and since its big data based more data is considered better than less.

 

[RamblingMad]

Right, and usually on a denied credit card it's been something in the category of what is published that go into credit scores I've heard of. Inquiries amount, credit limits, number of accounts, length of history, etc. So, behind the scenes there is another model of a social media score for what instances of issuing credit? Genuinely interested. I have heard the general topic come up of social scores in other aspects, just very peripherally about it on occasion when news reading.

You’re more likely to see these used by companies called fintechs than traditional lenders. If you want to get scored as close to your traditional FICO scores, then go to an old brick and mortar lender.

SoFi is probably the biggest fintech using alternative data to score you.

What I am saying is that you have to be aware of stuff beyond your traditional scores now. Making a decision to use social media or not is a binary choice. What social media you use is also a choice. Both can potentially be used in a model.

 

[RamblingMad]

But at what point do they invoke these minute details? Are we talking about people with borderline FICO scores who get this deep dive? People trying to borrow a million dollars for a small business loan? Who, specifically, triggers this kind of layered inquiry?

If the three main credit reporting agencies show scores above 800, with a long credit history with no delinquencies at all, not even one late payment, and a solid employment history with stable income, does a lending company REALLY go "hmm...not sure about this person, let's see who he is friends with on Facebook?" Seems like wasted time and money to me, unless the person is seeking a GIANT loan.

Loan size isn’t really an issue here. It’s what data is best at predicting your ability to pay. When you build a model, you pull all of this stuff in and weight most highly the stuff that predicts the best.

And as technology improves you can use more and more data that costs you less and less. When I build models I’m looking for two things: what predicts the best and how do I balance that against cost. As you pull more stuff in, it costs you more. The additional costs has to be offset by better performance for it to make sense to use.

I expect to use more alternatives in the future as all of the pandemic stimulus has weakened the predictive value of traditional variables, which number about 600ish

 

[ford91exploder]

You’re more likely to see these used by companies called fintechs than traditional lenders. If you want to get scored as close to your traditional FICO scores, then go to an old brick and mortar lender.

SoFi is probably the biggest fintech using alternative data to score you.

What I am saying is that you have to be aware of stuff beyond your traditional scores now. Making a decision to use social media or not is a binary choice. What social media you use is also a choice. Both can potentially be used in a model.

exactly social media for me is LinkedIn i have all the rest including parler and gab but as ‘trademark protection’ so no one else can pretend to be me on social media, but i dont use them

 

[RamblingMad]

exactly social media for me is LinkedIn i have all the rest including parler and gab but as ‘trademark protection’ so no one else can pretend to be me on social media, but i dont use them

It’s an alternative way to figure out age without using age too. If someone has an Instagram account they are likely to be younger than someone with a Facebook account.

All of these choices are data points. They tell a story. And you can’t really opt out. Opting out of social media is a data point.

 

[elgerber]

I just spoke with my bank, and they did say that any increase to my credit limit would come with a hard inquiry. So, I passed on that.

if you are doing a pre-approval, your loan officer should be able to answer this. I work in mtg, our credit reports have a feature where they can run what if scenarios that show options that may increase the score on a specific persons report. You could ask if they have this option.

 

[ford91exploder]

It’s an alternative way to figure out age without using age too. If someone has an Instagram account they are likely to be younger than someone with a Facebook account.

All of these choices are data points. They tell a story. And you can’t really opt out. Opting out of social media is a data point.

Yes it is, it shows a well deserved lack of trust in big tech, And a awareness that one must be in control of things that are linked to ones identity, Its like cyber security you dont judge what a threat is likely to do its what are they capable of doing.

looking like Fox Mulder was right all along, ‘Trust no one’

 

[dclpluto]

Some things I don’t understand. My son paid his car off early last payment was like 4200 dollars. I co sign. My credit score went down three points not a lot but three points when I thought it was going to go up. Nothing else changed. Anyone know why? Is it because he paid it off early?

 

[The WDW 3]

Some things I don’t understand. My son paid his car off early last payment was like 4200 dollars. I co sign. My credit score went down three points not a lot but three points when I thought it was going to go up. Nothing else changed. Anyone know why? Is it because he paid it off early?

Your credit report should show you why it went down. Just get a free report from credit karma

 

[DLgal]

Some things I don’t understand. My son paid his car off early last payment was like 4200 dollars. I co sign. My credit score went down three points not a lot but three points when I thought it was going to go up. Nothing else changed. Anyone know why? Is it because he paid it off early?

They like to see installment loan payments on credit reports. It is not to your benefit to really ever pay off a loan early. It will always cause a hit to your score.

We don't have a mortgage (we rent) and for years we had 2 paid off cars. I have a long 24 year credit history that is impeccable. I couldn't break 800 until we took out a car loan in 2017. Within 3 months, my score shot up close to 850. It's going to be paid off next May and I know my score will go down again.

It really doesn't matter though once your score is above 760. That's the threshold for getting the best rates anyway.

 

[afan]

Your credit report should show you why it went down. Just get a free report from credit karma

Give it a month or two and it'll go back up. Sold my rental and the payoff hit last month and it's gone down and back up a few points since then.

I pay my cards weekly so sometimes a statement will post with a "higher" balance rather than 0. The 460ish balance that hit my cr affected my cr more than the mortgage being closed did and I'm way under 5% utilization because I don't carry a balance.