Ridiculous credit score goodwill adjustment idea returns

An Unexpected Error has occurred.” – myFICO message board

It’s back (unfortunately).

TIME (indeed, with the help of Fair Isaac) helps it along.

And, a CreditCards.com story titled “8 Quick Fixes for Your Credit Score” states:

If there are problems like late or missed payments on your credit report, it can sometimes pay off to ask your card issuer for a ‘goodwill adjustment.’ This is especially true if you have good credit and you otherwise have been a model customer. Write your card issuer to ask – you may be surprised by their answer.

Writers will be writers, but here is something even more confounding. A former Fair Isaac executive and witness to Congress makes a similar suggestion on Credit.com:

Matt may try and work with the lender to see if they will delete the judgment if he satisfies it in full (this is sometimes referred to as a ‘pay for delete‘ agreement), but there are no guarantees the lender will agree to that (and there is no requirement they do so).

Try the “GW LETTER” hyperlinks on the page Goodwill adjustment – Influence: Media, lying that used to lead to myFICO message board comments about the so-called goodwill adjustment (lie). The links no longer work.

A myFICO forum contributer wants to keep it quiet about the lying:

It’s fine to have one-off success stories here and there and various contact info scattered across many posts. However, creating a single ‘database’ that broadcasts creditors’ willingness to provide GW adjustments may actually be counter-productive and discourage creditors from granting this nicety. Remember, anyone can read these message boards.


Credit score expert deems inquiries 5 points issue Myth #1

A credit score expert declares that an idea about credit report inquiries is the number one credit score myth.

The Myth

Tom Quinn, who recently departed from Fair Isaac (who wants to be known as FICO), writes that “Myth #1” pertains to the inquiries made to a consumer (credit) report. The top myth, he claims, is that every inquiry for credit costs 5 points in the score system.

To give the myth mongers some credit, the notion has some foundation, since the scoring company uses the number 5 in its brief official statement. However, the fatal flaw is the incomplete explanation in the paragraph mentioning “5 points.” It says that one additional credit inquiry made for the purpose of applying for credit may have no effect, at all, on a person’s score. Then it says that, for others, one additional inquiry would drop the FICO score less than 5 points (indeed, 4 points or less, in other words).

Words matter

But, that is where this consumer appeasement exercise by (oh, alright, FICO) FICO falls apart. It fails the logic test because it means that for others, still, an additional inquiry may cost 5, or even 6 points. And, in turn, for others beyond that, logically, it could mean that the algorithm drops the score 100 points, or even 400 points. Who knows?

That is probably not the case, but mathematically–based on the word problem–possible. If The Wizard had said, “For all others,” instead of just “For others,” you could make the (4-point, at least) assumption.  It is akin to a trick question.

Here is the ultimate inquiry query in this inquiry:  What is the maximum number of points that an inquiry can cost in the Fico credit score?

As unsatisfying as it is, Quinn’s brief and frank statement answers it: “There is no fixed set number of points that an inquiry will cost.”

Life lessons

While opinions vary on which myth is really #1, the one about 5-points-for-an-inquiry is complicated, and soundbite explanations just don’t cut it. When even The Wizard itself uses the phrase “typically only accounts for five points” (key weasel word: typically) it’s enough to pull your hair out.  Quinn’s explanation says that there is no certain number of deducted points associated with an inquiry, and that, generally, “inquiries have a relatively minor contribution” to the score.  Of course, that is not much to hold onto, either. But, perhaps, that lesson of his elegant brevity (the antithesis of this post) is inherent and based in wisdom and real experience from within the system: saying less is more.  Pundits and journalists love to publish numbers, so if you are in an interview and say “5 points,” you had better be sure that the writers get the nuanced part of the the figure, too. The results of the failure to do so can be disasterous.

Fortunately, we have this great, big (almost) world-wide, collective intertwined web thing that we can use to explain things to each other (and make corrections), Kumbayah.

Or not.

The Expert

So, what evidence does Quinn give to back up what he is saying about inquiries? None, but the guy has expertise few can claim: The score company ex-vice president is fresh from Capitol Hill, having testified on behalf of his former employer as late as last year. He joins another former insider, John Ulzheimer, as a credible expert (as opposed to authors blowhards and anybody with a website) making cogent public statements about FICO credit scores.  It ain’t much, verified, or proven publicly–and we can take it on faith or play the cynic–but it’s the best we’ve got.

On the other hand, even Quinn’s platform with the perfect, enviable name, Credit.com, gets it wrong about credit scores elsewhere on the same website.

Meh.  Whatever.  Myths are everywhere.