Your Secret Credit Scores

I just ran across an interesting article by Liz Pulliam Weston detailing the various scores that lenders use to determine who gets what sort of offer.

In addition to the well known “FICO” credit score, credit issuers apparently keep track of the following eight metrics…

Response score: An estimate of the likelihood that you’ll respond to things such as a new balance transfer credit card offer. This helps them determine whom to target and how often.

Application score: This score includes information that’s on your application, but is not already factored into your FICO score. This includes things like time at current employer, salary, etc. This score is used to determine whether or not to open the account, and how high of limit to offer to you.

Bankruptcy score: Standard credit scores are designed to predict the likelihood that you’ll miss a payment in the next couple of years. Bankruptcy scores, which range from 1 to 300 (higher is better), predict the likelihood that you’ll just give up on debt repayment and file bankruptcy. Unfortunately, Weston’s article didn’t go into detail on the sorts of things that go into your bankruptcy score.

Revenue score: This score predicts the likely profitability of an account. Here again, the article didn’t detail how it’s determined, but… I would imagine that creditors with which you’ve done business in the past will factor in things like whether or not you typically carried a balance, how much you’ve paid in late fees, etc.

Attrition-risk score: This score reflects the likelihood that a customer will stop using a card. If you are a profitable customer with low bankruptcy risk, this score can influence the likelihood that you’ll be offered a carrot to stay with the company — perhaps a high credit limit or a lower interest rate. If you’re not very profitable and/or viewed as a credit risk, on the other hand, don’t expect them to work very hard to keep you.

Behavior score: This scores looks at your payment behavior and factors in things like whether or not you pay your bills in full every month, occasionally carry a balance, or persistently pay on the minimum amount due. This score, which comes from internal creditor databases, can be used to predict whether a missed payment is an aberration or a sign of impending doom.

Transaction score: This score is used to determine whether or not a given transaction fits your typical spending pattern, and thus whether or not it’s potentially fraudulent. While I’m whole-heartedly in favor of fraud prevention, methinks that Citibank needs to fine-tune their transaction scoring system such that we don’t get stopped from doing things like making charitable donations.

Collection score: Collections agencies use collections scores to predict whether or not they’ll be able to get any money out of you, and they rank their list of debtors accordingly. If your score is low and the amoutn involved is small, they’ll make less of an effort to track you down. Hmmm… I wonder what our collection score is right now?

All in all, I’d have to say that we have a pretty boring set of scores. We pay our bills on time, never carry a balance, and have been relatively stable, long-term customers on most of our credit cards. We’re not overly profitable in that we don’t pay finance charges, but… We’re very low risk, and we charge most of our monthly purchases, so we’re a constant source of merchant transaction fees.