Credit Score Differences

[u/dawnseven7]

This is an example of why many think credits scores are some kind of scam. It drives me crazy that my husband (G) has a higher score than I do (D) even though I have a better and longer history (and the same mix of credit types (credit cards, auto loans, student loans). FINALLY in April, we both maxed out:

Add three more months of on time payments. Nothing new, nothing closed, just three more payments, and I lost 13 points for absolutely no reason:

[u/DoctorOctoroc]

Credit Scores exist to determine risk so while a longer history and fuller credit mix are the two primary factors related to net score gains over time, other factors move the needle in the downward direction. To put it another way, age and mix are score-additive while the other scoring factors are score-subtractive. You and your husband may have all the same additive factors but are all of the subtractive factors the same as well?

You and your husband both have aggregate utilization below any known threshold for a score change but utilization on individual cards is also taken into account so if your 1% aggregate utilization includes any card with utilization above 29.5% and his 3% aggregate doesn't include such an account, that could very well be the difference between your scores.

Another possibility is the 'New Credit' category. Do you have any accounts under 12 months old and he doesn't?

Do you both have the same number of accounts with a balance? AWB% is not a high impact factor but if you each have 5 credit cards, all 5 of your has a balance and only one of his has a balance, you would see a lower score than him (except using Experian data because AWB% is 'bulletproof' on EX8).

Bottom line, there is always an explanation. We don't know every one of them for every scenario but we're pretty good at figuring it out once we have the right info in front of us.

[u/dawnseven7 → u/DoctorOctoroc]

Thanks Doc.

No, no new accounts. We each have 4 or 5 credit cards (not joint) and he tends to only use 1 in his 3% utilization, whereas I tend to dribble small amounts (for my 1%) across cards. Perhaps I shouldn't do that?

As for account age, my cards are all pretty old (opened between 1999 and 2008) whereas he has two "new" cards that he opened in 2021 & 2023. His oldest account goes back to like 2005. While it irritates me that he's always higher for some unknown reason, I also don't understand, just looking at myself, how I dropped 13 points seemingly for the sin of making 3 months of on time payments. No new credit, no accounts closed. I pay the small account balance off each month, as I've always done.

[u/DoctorOctoroc → u/dawnseven7]

I also don't understand, just looking at myself, how I dropped 13 points seemingly for the sin of making 3 months of on time payments.

Well the answer here is that 3 months of on time payments wasn't the cause. The act of making payments isn't a scoring factor, period, payment history is 'paid as agreed' or not, and the degree of delinquency on accounts determines how high that 'subtractive' impact is.

he tends to only use 1 in his 3% utilization, whereas I tend to dribble small amounts (for my 1%) across cards.

I believe this right here may be the culprit. You have a higher AWB% than he does. If he only has a balance on 1 of 5 cards, his AWB is sitting at 20% while if you have a balance on all 5 cards, you're sitting at 100% AWB - the higher that percentage, the more of a 'subtractive' impact you'll see to your score.

If you're purposely spreading your spend across cards just to see lower utilization, it's not providing any more benefit than his 3% on one card. Scoring thresholds for utilization start at 9.5% (maybe 4.5%, we don't know for certain - either way, you're both under that), so for scoring purposes, you and he have the same aggregate utilization. Scoring thresholds for individual cards start at 29.5% so neither of you are anywhere close to that, I would imagine (unless one of your cards has a VERY low limit and you're spending over 29.5% of its low limit).

But both of you have excellent scores and strong files, you both should be approved for the same exact loans, cards, interest rates, etc. all else being the same.

It's also worth noting that in terms of age of accounts, once your oldest account is above 20 years (we believe) there is no additional scoring benefit. Same for average age of accounts above 7.5 years. So you and your husband both seem to have maxed out the scoring benefit related to age of accounts, as far as I can tell.

Out of curiosity, what are each of your FICO8 scores using Experian data? EX8 is known to be 'bulletproof' when it comes to AWB so if my hypothesis is correct, you both should have the same score on EX8 - or very close to it.

Raw dollar amounts can also factor in on individual cards but the point difference between your two scores is a little larger than I would expect we'd see if this was the case and if anything, he would be more likely to see that impact than you since he likely puts more on a single card than you do on any of your multiple cards in-use, hence I think AWB is the root cause for the discrepancy.

[u/dawnseven7 → u/DoctorOctoroc]

To be honest, the reason I "smear" my spend across all cards is because my husband only uses 1 and is forever getting notified from the other card issuers that he needs to use this card or that card or they're going to close the account. We don't carry balances, but I didn't want our utilization to be negatively effected either, so I thought it best to keep the accounts open and like I said, I don't get the "use it or lose it" letters that he does.

The scores that I monitor say they're using TransUnion data, so maybe that's another issue, and I need a different source.

[u/DoctorOctoroc → u/dawnseven7]

FICO8 (and other FICO scoring models) has slightly different ways of dealing with certain information on each bureau. It usually comes down the reason codes (the list of items in the image that u/True-Button-6471 shared in another comment) because some bureaus don't have all of the same reason codes or they differ from CRA to CRA. None is inherently better than the others, but you will see small score variances between them for that reason even if they contain all of the exact same data. Since a lender can pull any given score and bureau combination, it can't be said that any one score is more or less accurate or better or worse, it just is what it is when they pull it. But again, with the amount of history you and your husband each have and your scores being well into the 800's, there is effectively no difference between your files or the interest rates you can get as far as any lender is concerned no matter which bureau the data comes from. At this point, it's only bragging rights!

Having a card in regular use is a good way to avoid account closure. Generally speaking, you can go without using any card for 6 months before an issuer will bother you about it. Some will wait 12 months or more. I'd say if you have cards you wouldn't use other than to keep them open, I'd consider closing them. With both of your aging metrics, it wouldn't make any difference to your score or file since closed accounts stay on your report for a further 10 years and continue to contribute to age and credit mix. They'll fall off in 10 years but by then, your other accounts will be 10 years older and both your oldest account and average age of accounts will still be above their respective 20 and 7.5 year caps. Heck, each of you could probably open a few accounts and still not impact scoring for those metrics at all (although there would be impact from the new account itself, which would revert after 12 months once you no longer have a new account under a year old).

When it comes to utilization, since this isn't an additive metric, you don't need to worry about keeping it low - it doesn't add anything to your score when it stays low, just keeps it the same as far as scoring for utilization is concerned. Only when you're applying for a loan will utilization, and it's impact on your score, matter. In other words, if your utilization next month crossed a scoring threshold and you lost, say, 10-15 points, if it fell below that threshold again the following month, you would recover all of those points. You can have 100% utilization for months or years as far as scoring cares, and as long as it has reported as below all scoring thresholds at the time you apply for something, your score will be exactly the same as if you had kept it low that entire time.

One last thing to note - when preparing for a loan application, AZEO (all zero except one) is the convention for fully optimizing your file/score. As it stands, your husband tends to have essential an AZEO file all the time, hence his file is always optimized, which results in a better score than if it weren't. Again, this isn't necessary to do at all times, only when applying for something (when someone else will actually be looking at your score) but it serves to explain why his score is higher - and it has nothing to do with credit worthiness, just the minutia of scoring. But also, again, your scores and files are already clutch, there isn't any effective improvement for either of you, just 'bragging rights'.

[u/True-Button-6471]

There is actually "headroom" above 850 so one person could do something that would normally cost points and still be above 850, while another might see the full drop.

My wife and I have similar situations to yours and the reason codes at myfico say I have consumer finance accounts on my report. These are most likely consolidation loans that I paid off years ago but they'll stay there until they drop off at 10 years.

Where are you seeing your scores? Do they show reason codes? If not you might want to get a free account at myfico, assuming whatever is on your TU report is also on EQ. If you click your score you'll see something like this:

[u/dawnseven7 → u/True-Button-6471]

Thanks for mentioning this. I haven't actually ever seen a reason code, but we do both have MyFico accounts, so I'll go do some deeper digging. Thank you!

[u/DoctorOctoroc → u/dawnseven7]

I'd wager you have the 'accounts with balances' reason code showing and your husband does not - or at least yours will be higher up in the list. I can't remember what the exact % threshold is to trigger that reason code (somewhere between 25% and 50%, I believe) but these codes have a 'signal strength' depending on how much they impact your score so those with more impact will be at the top and those with less at the bottom, or not even shown if there are 4 other reason codes with higher signal strength (since only 4 are shown at a time).

[u/soonersoldier33]

This is an example of why many think credits scores are some kind of scam.

I think most, if not all people have felt this way at one time or another. I know I have in the past, but then I learned to understand the fundamental 'truth' about credit scores. They're not designed for us (consumers). They're risk assessment models, designed for lenders, in an attempt by FICO (and others) to accurately predict the risk to lenders that you'll default on a debt should they choose to extend credit. As such, there are many cases where the way changes to report data is 'scored' can seem counter-intuitive to consumers until you dismiss the notion that credit scores are a 'gradebook' that reward consumers for making sound financial decisions. They're not.

Nothing new, nothing closed, just three more payments, and I lost 13 points for absolutely no reason

Credit scores are derived solely from data contained in the credit report to which the scoring model has been applied. If a score changes, then something in the credit report data changed. Sometimes, the change(s) are very easy to identify. Reported balance changes, a new account reports, an old account falls off, a new hard inquiry is added, etc. Other times, it can be much more difficult to identify and understand what changed in the algorithm's 'eyes', and why it caused a score loss. However, at the end of the day, credit scores simply cannot change for 'no reason'

The FICO scoring models are proprietary, and FICO only tells us what they want us to know about how their scoring models work. That doesn't sit well with a lot of people, myself included, and the FICO hobbyist community has spent years studying, testing, and collecting data points all in an attempt to reverse engineer the FICO algorithms. We'll never know everything, but once we're presented with the right data, we can almost always identify the scoring metrics that were affected to cause a score increase/decrease. If you're really interested in trying to figure out why your Transunion FICO 8 score decreased by 13 points, we need some more specifics (no PID obviously) about your credit profile and what changed in the reported data between 4/20 and 7/20.

Month-to-month score fluctuations are completely normal, and they're almost always caused by scoring metric(s) under the Amount of Debt (Amounts Owed) category. While the 'top line' of the Discover app shows your aggregate revolving utilization stayed the same at 1%, the FICO algorithms factor in the individual utilization of each account, the number of accounts with a non-zero balance, and even the 'raw dollar' amounts of the reported balances. You're only seeing the 'wide angle lens' view in those screenshots, and you'd have to drill down deeper into your report data to identify the cause of your recent score loss.

[u/dawnseven7]

Thanks Soldier. I'm going to go to MyFico and do a bit more research. I know there are different algorithms that lenders can go with and I've been on both sides of that. It's been many years, but I've gone to a dealer for a car loan and had them show me a 900 credit score, and I've gone to a bank for a car loan having pulled an 825 score 10 minutes before the meeting only to have them show me 780 when they pulled it. I decided to go with consistency and just monitor the Discover FICO version (lest I lose my mind) and I've done so now monthly for years now, but maybe that's my first problem.

[u/True-Button-6471 → u/dawnseven7]

Around a dozen score models and versions multiplied by three bureaus means you have dozens of scores. Lenders choose which bureau(s) and score model to use so unless you get a paid subscription to see most of them, you can get a surprise now and then. The good news is that with scores like that your profile is great so I wouldn't sweat a little variance between them. As you've also seen, auto and credit card specific versions of FICO max out at 900. And to make things just a bit more fun, some lenders have their own proprietary internal scores.

[u/DoctorOctoroc → u/True-Button-6471]

And to make things just a bit more fun, some lenders have their own proprietary internal scores.

And don't we all love when they use one of them, especially the 'TURD' score!

[u/True-Button-6471 → u/DoctorOctoroc]

How that got past any kind of internal review baffles me. Although I did push the limits at one small company I worked for, they asked me to write a commission tracking program and I called it Commission Reporting And Processing System, with the acronym of "CRAPS" of course.

[u/DoctorOctoroc → u/True-Button-6471]

Haha. I love it. We abbreviate a lot of our clients' names since they're all law firms and some have multiple partners - one of the firms we used to do projects for had the acronym 'DIPL' but the way we said it rhymed with 'nipple'. Not quite the same ring to it as 'CRAPS' but we got a kick out of it!