Credit tier and credit score

[jeisensc]

@ElectricEliminator

It really is strange how much they all vary. I was applying for financing for something recently and all 3 bureaus were pretty different, and the bank’s number was different from all 3.

When you dig into it, it’s really not strange. It’s unlikely all three of your bureaus match exactly. The risk models are proprietary, and based on all kind of variables (and revised over the years). The score is generated by taking the transaction data from whatever bureau and running it through the model. Why different regions/lenders like a particular bureau sounds like someone justifying why the soda they like is the best and the alternatives suck: same ingredient list in different proportions to get a nearly identical but slightly different output.

If anyone remembers Beacon, that was the gold standard for years until their models were perceived to be profiling people (they were) because zip code was so heavily weighted.

As has been mentioned, even the same scorer (e.g. FICO) has multiple versions of the model based on different factors. Some bureaus have their own (e.g. Auto Enhanced Equifax) specifically to model risk for car loans (which has a slightly lower default rate on the same consumer who might default on their mortgage).

Different models weight different variables higher or lower. The captive lender decides what their risk profile is, and chooses a model to fit, and sets their tiers/scores accordingly. The purpose of all of this is for the people lending you the money to get the right balance of performing/non-performing loans, at the set interest rates, with the right amount of capital, giving them the desired rate of return.

@Jflores14

Thinking about putting a master list together for which version of fico each manuf/finance company pulls(Experian, Transunion, Equifax, fico 8, auto8, auto2, etc…)

It’s been discussed. You are trying to reduce multivariable calculus to algebra. Nobel gesture but there are no guarantees, even within the same captive. It differs by region, it changes over time.

Tier 1-3 Breakouts?

You’re trying to reduce multi-variable calculus to algebra. what Cody said: different captives cut their tiers differently, many have more than 3 tiers. And: they don’t all use the same scoring model. (e.g. FICO Auto v8 vs Auto Enhanced Equifax) And: Captives don’t all generate their chosen scoring model using the same bureau. And: 3a) some captives that agree on a scoring model and what scores align to what tiers, don’t even use the same bureau in every region (eg they may use Experian in NE…

@danieljc

Never use the educational scores to make decisions.

This

@ElectricEliminator

@Cody_Carter probably has the best answer to that

This is really the best answer. If you aren’t certain your score is A-Tier for the vehicle you want: determine the captive, find out what their credit score/tiers are, and get an authoritative credit score from FICO, one of the bureaus, or if you don’t want to pay check your bank. Bank of America, Chase, my Barclays credit card, all give me my FICO v2 (non-Auto) scores for free, updated monthly. It’s generally lower than your FICO v8 or an Auto Enhanced score, so you’ll know what you’re dealing with.

If you’re on the line, you either have to have them run your credit or roll the dice.

[CapsCup2018]

@jamiemose

Do you use Credit Karma?

Credit Karma is hit or miss. It’s 80 points off on mine.

[woocoheed]

BMW dealer said I was 51 points higher than credit karma says for me

[CapsCup2018]

@woocoheed

BMW dealer said I was 51 points higher

My wife’s was significantly higher as well. The main lint was it’s not an accurate representation.

[nyhacker]

Those who are actually in the car business can attest for the fact that Credit Karma is not accurate and there is plenty of information via Google that discusses why it is not accurate when applying for auto loans.

Credit Karma uses VantageScore where as most banks pull a FICO score which can drastically change.

I’ve had customers where FICO pulls 50-80 points lower than what Credit Karma reads.

In my experience it seems that Credit Karma doesn’t account for clients history and delinquencies as much as when running a FICO check.

Somebody in here who is a finance manager might be able to shed more light on it but there is plenty of information on google that discusses it.

[jeisensc]

@nyhacker

Credit Karma uses VantageScore where as most banks pull a FICO score which can drastically change.

I’ve had customers where FICO pulls 50-80 points lower than what Credit Karma reads.

In my experience it seems that Credit Karma doesn’t account for clients history and delinquencies as much as when running a FICO check.

It’s possible someone can give you anecdotal information about what seems to account for score variations: but they don’t know.

The scoring models are actuarial secret sauce, the ones from larger firms have many more cooks in the kitchen.

What bureau got pulled, for what date range, poured through the funnel is different for every person, every 30 days. You need a statistically significant sample of inputs and outputs to begin to try and reverse engineer. This is why it took so longer to figure out that Beacon was dinging credit scores for demographics it should not have been (over-weight of zip code loan performance turned out to racially profile in many instances).

The score simulators from the various scoring places are a better way to understand specific impact to your score from a particular action. Comparing two people’s vantage and auto enhanced equifax is non-deterministic.

[inoc]

My CKARMA Vantage Score and Experian FICO Score are within 5 points of each other…

[Jflores14]

That may be true for you, but most of the time it’s not true for someone else. Every scoring model is calculated different… it’s best to find out your true FICO scores than to rely on CK or other sources Vantage scores… those scores are not used by the financial institutions to make credit decisions therefore unreliable.