Date post: | 14-Jan-2017 |
Category: |
Business |
Upload: | susan-mccullah |
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Credit Education 201-Advanced Credit Score Education
with Blake Higgins and Susan McCullah
Today’s Agenda
Recap of Credit 101Different types of credit reports Score cards How delinquencies affect credit scores FICO 9.0 Q & A
Recap of Credit 101
Different Types of Credit Scores
and Reports
QUESTION????
I am sorry but your application has been denied, because your credit score is a 580.
WHAT??!! I just pulled my own
credit score yesterday and it was a 635!!
How could this happen??
FICO VANTAGE SCORECONSUMER
CREDIT SCORE
MORTGAGE
CREDIT
SCORE
AUTO CREDIT SCORE
•Mortgage Score•Auto Score•BankCard Score•Bankruptcy Risk Score•Insurance Risk Score•Generic Consumer Score
FICO
601-700Non-Prime
Vantage Score
901-990Super Prime
A
501-600High Risk
801-900Prime Plus
701-800Prime
BCDF
The VantageScore ranges from 501-990
A letter grade is assigned to your VantageScore
Industry Option Scores
FICO Mortgage—FICO Auto—FICO Bank Card
Have you ever had a mortgage
included in a bankruptcy
or foreclosure?
Have you ever had a car
repossessed?Have you ever been unable to fulfill a lease obligation to the original
terms?
Have you ever had a credit or bank card go into collection
status? Did you settle for less than the original
amount?
Example
Generic FICO 750
FICO Auto 740FICO Bankcard 764FICO Mortgage 763
Now that you know the different
types of credit scores, you can better explain
some of the subtle differences in
credit scores your customers may
encounter
Score Cards
Score Cards
Score Cards
Score Cards
Consumer Who Defaulted
Variables
Score Cards
Statistical Model
Score Cards
Score Cards
Large Number of Consumers…
With Similar Credit History
Score Cards
Score Cards
Thin Files
Derogatory Items
Bankruptcy
Long, Lengthy Credit History
3 Components
Characteristics
Variables
Weights
Remember
The weight the variables receive depends on the SCORE CARD the person lives on.
Score Card Hopping
Score Card Hopping
Meet Annie
Score Card Hopping
Annie had a bankruptcy years ago
…so she lives on the Bankruptcy
Score Card
Score Card Hopping
Since filing bankruptcy, Annie has
managed her credit wisely
…she pays her bills on time
Score Card Hopping
Since filing bankruptcy, Annie has
managed her credit wisely
…she keeps her credit card balance
low
Score Card Hopping
Since filing bankruptcy, Annie has
managed her credit wisely
…she rarely applies for new credit
Score Card Hopping
Since filing bankruptcy, Annie has
managed her credit wisely
…Annie is at the top of the group
Score Card Hopping
This helps Annie have a great credit
score
Score Card Hopping
Once Annie’s bankruptcy falls
off her credit report
…she moves to a different Score
Card
Score Card Hopping
Now, her credit may not look as
good
…since it’s being compared to a new
group
Score Card Hopping
Annie’s credit score could actually…
…DECREASE
Other Reasons For A Score Card Hop
Filing Bankruptcy
Other Reasons For A Score Card Hop
Having a collection hit your credit
report
Other Reasons For A Score Card Hop
One of your credit
cards reaches a
certain age
How Delinquencies Affect The Credit Score
QUESTION????
Delinquencies
The next chart shows FICO’s findings on the impact to credit scores following delinquencies.
*Estimates assume all else held consistent over time (e.g. no new account openings, no new delinquencies, similar outstanding debt).
Delinquencies
*Estimates assume all else held consistent over time (e.g. no new account openings, no new delinquencies, similar outstanding debt).
The next chart shows the estimated time it will take for
your FICO score to fully recover
Delinquencies
Points to Remember
The degree of impact on a FICO score depends on the starting point of the
credit score.
FICO 9.0Find out how the
new enhancements
could impact your credit score
FICO 9.0
FICO 9.0
3 Main Improvements
to FICO 9.0
FICO 9.0
MEDICAL DEBTS
will have a lesser negative
impact on consumer
credit scores
FICO 9.0
THIN FILES
A better calculation to determine credit worthiness for consumers with little credit history
FICO 9.0
PAID COLLECTIONS
wont hurt your credit scorelike before
FICO 9.0
Points to RememberFICO 9.0 retains the same numerical range of 300-850 as the previous FICO model
This new scoring model is NOT YET in use for
consumer or mortgage use
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THIS MEANS…..
We offer three exciting CreditXpert productsCredit Assure: Automatically scans the credit report on the front end for opportunities to raise the consumer’s credit score.
Credit Essentials: Determines the best actions to take to maximize an applicant’s credit scores, returning specific recommended actions.
What-if simulator: Powerfully simulates both pre-defined scenarios and custom scenarios, helping make informed decisions and uncovering new opportunities.
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Thank you for Attending!Coming soon: Trended data
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