07.30.09
By John Ulzheimer
Earlier this week, I wrote about
credit model scorecards (which I strongly suggest you review so that this article will make complete sense). I positioned the article as a much-needed release of pent-up analytic stress. I have to admit, though, that I did have an ulterior motive. That motive was to introduce a concept to consumers who have long agonized over the cause of their credit scores changing. The concept is called Scorecard Hop.
Each scorecard, and every scoring model, has it’s own way of scoring your
credit reports. What counts and how much it counts is going to be different in each scorecard. And there’s no guarantee that just because your credit files are scored in a certain scorecard today that your files will be scored using the same scorecard tomorrow.
This causes an incredible amount of confusion for consumers who try to attribute a change in their credit score to one or two changes on their credit reports. However, it’s not that simple. When your credit file goes from being scored in one scorecard to being scored in another scorecard (Scorecard Hop), all bets are off. You simply can’t attribute the score change to the change on your credit file, because everything about your credit file is being evaluated differently and counted differently.
Below you’ll find an explanation -- sort of -- from FICO about why this consumer’s score went down. The second explanation is Scorecard Hop.
So how do you prevent it? You don’t. How do you improve your score once it’s happened? The same way you have always been told to improve your scores: by paying your bills on time, staying out of credit card debt, and shopping for credit sparingly. Who can you complain to? Nobody. It’s unlikely you’d find anyone in any customer service department who understands these concepts.
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