Meet The Woman Who Devised The New FICO Scoring System

SmartMoney has a feature this week about Susan Blue Hitt, an Austin-based math nerd who loves football, flies planes, and is responsible for the revised FICO scoring model “that will change the way credit scores are calculated, affecting interest rates for 160 million Americans” sometime next year.

There are some fun bits of trivia in the article—for instance, FICO has a “subterranean data warehouse outside its Minneapolis headquarters,” and Hitt’s own credit score is 770, which is a great score but far from perfect (we’re sure some Consumerist readers are already scoffing).

To build the 2008 version, which will launch early next year, Hitt and her team of 25 analysts pulled the 2005 and 2007 credit reports of 5 million consumers to see how their credit profiles fared over time. Given this historical data, she can predict how characteristics such as your total number of credit cards (three is often ideal) or average account age (longer is better) affect your chance of defaulting on a loan in the future. Every one of the 30 or so possible characteristics derived from your report earns a certain number of points, but the calculations don’t end there. Each characteristic counts for a bigger or smaller portion of your total score, depending on which of 12 borrower profiles you fit (kid with his first credit card, for example, or perennial deadbeat).

“The Credit-Score Puzzle” [SmartMoney]
(Photo: Getty)


Edit Your Comment

  1. bohemian says:

    I still think you should be able to get your FICO direct from Fair Issac any time you request it, the scores from the bureau are always off. It would also be nice to see something done to flag medical debt differently in the equation compared to consumer debt.

  2. i dont like how they take the length of your account into consideration for your score. I’ve closed accounts based on poor customer service, and apparently that hurts my score.

  3. Me - now with more humidity says:

    Petrarch: That has always been true. As has requesting a credit decrease.

  4. czarandy says:

    @bohemian: The scores from the bureaus might be off, but creditors will probably be looking at only those scores, so it doesn’t matter.

  5. Mr. Gunn says:

    Experian has a score that they call the Vantage score or something, but everyone else calls it the FAKO. It’s not your real FICO, which is why the bureau score is sometimes different.

  6. humphrmi says:

    When I bought my house (before the sub-prime lending market went into the stratosphere) someone (you, or your mortgage broker if you had one) had to reconcile all three credit scores and come within a certain (small) percentage of each other. I suppose all that care and feeding prior to closing went out the window during the sub-prime heyday but at least at one point it was important that they were close.

    BTW if I understand it correctly, there is no “FICO direct from Fair Issac”, FICO is really a protocol for calculating the score and the credit reporting agencies do it themselves. I pay Fair Issac to give me my FICO score four times a year and it actually comes from one of the CRA’s.

  7. SayAhh says:

    I requested credit reports with FICO scores from the main 3 credit bureaus (Equifax, Experian and TransUnion) and got three different scores: because each bureau sets their own (different) range of scores, and thus 800 doesn’t mean that your score is perfect. (Don’t have them with me, but I’m sure someone will list them.) The higher the score the better, of course.

  8. Me - now with more humidity says:

    Sayahh: But most lenders look at the middle score, especially mortgage lenders.

  9. RvLeshrac says:

    Too bad the use of numbers like this is incredibly evil. There are millions of factors that aren’t part of someone’s credit accounts that can cause problems, and millions of factors that are part of confidential files (medical records, psych records, legal consultations) that can cause problems. Likely a good thing, though, as otherwise people with poor family medical histories would be turned down for credit.

    My grandfather was declined for a Sears card ages ago because he had “insufficient credit,” despite owning a business for 30 years, never being late on a payment for anything in his entire life, etc.

    It really is ironic that he would’ve had an easier time getting the card if he’d had a dozen cards with past-due balances. But, you know, all hail the nonscientific FICO score.

  10. loueloui says:

    The entire FICO scoring system is fundamentally unfair, and unfortunately the credit card companies, and their henchmen have no motivation whatsoever to change it. How so?

    Let’s say you have a cable bill, or a cell phone, or home phone which you’ve paid on time for years.There isn’t any extension of credit for these transactions so they don’t raise your score. However let’s say you’ve fallen on hard times, and now you can’t pay one or the other. Eventually this ‘bad debt’ will get forwarded to a collection agency, where it will certainly end up as a big frowny face on your credit report, dragging your score down by a huge amount.

    The whole system is rigged. There are many more ways to lower your score by a huge margin, and very few ways to raise it. Of course the credit companies love this because then they can say ‘Well Mr. Jones you did have that one cell phone bill you didn’t pay in 2002, so now we’re justified in charging you 29000% interest.’

    I suggest that any entry into your credit report contain your entire payment history of that account, and not just any outstanding debt. That way if you had paid your bill on time for the previous 5 years that information would be included as well. Of course this would improve peoples’ scores dramatically, and would probably result in lower interest rates for credit card customers, so that’ll never happen.

  11. @RvLeshrac: “Too bad the use of numbers like this is incredibly evil. “

    Ideally this is why small community banks are a good thing — they can actually KNOW things about you. But that’s relatively impractical in today’s financial services world, AND can be extremely unfair if they’re using personal knowledge of you to make decisions rather than imaginary numbers that come from somewhere else. Or at least, they’re way less likely to get sued with someone else’s imaginary numbers than with the nightmare of, say, a loan officer who refuses to lend to black people because he gets to use his discretion.

  12. mac-phisto says:

    @loueloui: wow. 29000%? a loan of $100 would have a per diem of $79.45. ouch.

  13. richcreamerybutter says:

    it’s safe to say I gave up on maintaining a proper credit score years ago. as long as I have enough savings to live on for a year (with debit card) and have an emergency card with a low balance, I don’t give a shit. I have no plans to own a home any day in the near future, so I refuse to put valuable time and energy into playing a game I’m not meant to win…and remind me what the prize is again??

  14. RvLeshrac says:

    @Eyebrows McGee:

    True on the discrimination. However, they simply apply a new form of discrimination. It is painfully easy to decide who is black, white, or asian based on these numbers. You can be wrong, but the odds of your guessing the middle-class white family instead of the statistically poorer minority family are somewhat low.

    Declined for a loan? More likely a minority.
    Many credit cards? More likely a minority.
    High carried amounts? More likely a minority.

    Does it make anyone better or worse? No. But there are rational explanations for the above events. Declined for a loan? Perhaps because the loan is often a face-to-face event. Many credit cards? Perhaps because credit lenders have been known to aggressively target minorities. High carried amounts? Perhaps because of more ‘life events’ like losing one’s job, or because of a statistically lower education level present in black and hispanic minority groups. High carried amounts can also be indicative of the slanted medical care*.

    *Medical care is slanted in favor of whites. This is not BECAUSE of discrimination, but DUE to discrimination. Black americans, hispanics, asians, white americans, africans, and europeans have, frequently very, different disease factors and risks. But how do you explain to an overly-sensitive public that you’re specifically testing the black family for sickle-cell anemia BECAUSE they are black, and have a much higher risk of the condition? It is much easier to explain why you’re testing the American white family for heart-disease risk factors vs. the European white family. This is why some recommend that you attend a physician of your own race – he or she is less likely to skip a test because it may seem racially motivated. (Not implying that a doctor not of your race is consciously taking those factors into consideration – but anti-discrimination has been hammered into us for so long that we’ve forgotten people of different races have different physiological makeups.)

  15. econobiker says:

    Progressive insurance is already using credit or credit related data to determine your policy costs…

  16. RvLeshrac says:


    All insurance companies are doing this.

    Employers are running credit checks as part of the “background check,” as well.

  17. hapless says:


    Credit companies have no motivation to discriminate against you with interest rates. They would love to offer you a better rate than their competitors.

    Yes, even paranoids have enemies. That’s not a way to justify paranoia.

  18. Mr. Gunn says:

    humphrmi: Incorrect. Fair, Isaac, and Co. is the only provider of FICO. CRAs do have their own versions of a score, but it’s just used for consumer reporting, not by lenders.

    SayAhh: There is only one true FICO. Variation may come from the fact that different bureaus have different information(some companies don’t report to all three bureaus), or it may come from the CRAs own mock FICO, called Vantage Score or whatever. That’s the score they set the ranges on, but it’s not your FICO.

    /this thread would be so red on FWF it’s not even funny