FICO to incorporate buy-now-pay-later loans into credit scores

FICO scores are a joke. They hint at what they use to calculate them, but the algorithms are kept secret. Fair Isaac can't reveal the algorithms, otherwise they'd get gamed. Incentives to keep bad info and wrong info in dossiers are strong, too. If allowed, Fair Isaac would put rumors and other bullshit on n your file, and never take it out.

the score is easy to reverse engineer if you have the data and pretty much every big bank has the data.

source: I worked at a big bank and did this, it was easy.

Most of the stuff is obvious and intuitive (don't make late payments). One that's not terribly intuitive is credit line utilization. It has a big impact and most people don't think about it. For example, it's better to have 2k in credit card debt if you have 20k in credit lines vs. 1k in debt on 2k in credit lines.

They don't really "hint at what they use to calculate them" so much as "tell you exactly what is used to calculate them, how it's calculated, and even include an estimation tool so you can calculate your score yourself"

https://www.myfico.com/credit-education/whats-in-your-credit...

>payment history (35%), amounts owed (30%), length of credit history (15%), new credit (10%) and credit mix (10%).

https://www.myfico.com/fico-credit-score-estimator/estimator

For fucks sake, at least keep your conspiracy theories somewhat believable.

Absolutely nobody is worried about "gaming" credit scores because the activities to "game" credit scores are identical to the activities that make you likely to pay off debt in the future and that's what a credit score measures. So it doesn't matter if you pay off your bills to "game" or to be responsible, you're still paying off your bills.

>the score is easy to reverse engineer if you have the data

In fact, FICO even provides you with a tool to "reverse engineer" a credit score given the data.

https://www.myfico.com/fico-credit-score-estimator/estimator

You forget the scoring is not based on individual performance only. It also includes your performance compared to those in similar groups or buckets.

Ever wonder why your credit score goes down randomly in one month despite nothing changing?

FICO’s black box algorithm put you in a newer credit group of higher credit scores. In that group, your profile scored much lower compared to others. Thus you get a 10-20 point deduction.

If you have a long history of good credit it probably doesn’t matter. But if you are a young person looking for auto/home mortgages, that 10-20 pt dedication _could_ lead to slightly higher APRs depending on the underwriters own scoring algorithm.

I don't know that they are really that complicated... I just do the things that they suggest the scores are based on. Pay on time, have more accounts that have been opened longer, have a lower credit utilization, etc and I watch my score go up and up.

My score started at around 670 when I was young and before I had done anything and I did the things and now it's around 820.

Why would they put rumors and bullshit in your file? The credit bureaus aren’t out to get you. Their goal is to help their clients (lenders and similar) to make money by identifying how risky their clients are. An accurate risk assessment is good for them. If you’re a good risk, they want your score to be high. They don’t gain anything by putting crap on your file to tank your score.

There are no incentives for Fair Isaac to promote or use "wrong info" because if the score they produce is deemed to be an inaccurate measure of credit risk, it would not be a useful product.