Available credit, does a higher $ value mean more points?

[Anonymous]

Assuming person A and person B have the exact info on their reports and each has only one credit card, whereas: Person A has an outstanding balance of $300 on a credit card with a $1,000 (30%) Person B has an outstanding balance of $1,500 on a credit card with a $5,000 limit (also 30%) So my question is would person B receive more credit score points because the weighted dollar value is high! Thanks in advance!

[llecs]

Hi Jped, I moved you over here to get input from the FICO scoring gurus.

IMO, there is a difference, but ever so slightly...If everything is an exact copy with the same accounts, the same type of accounts, same open dates, same CRA, same FICO version, same scoring bucket, same history, same payment history, etc., then the scores would be similar, if not exactly alike. FICO cares about overall utilization and individual, but I noticed on mine that one of my positives on EQ is that my CC balances are low. They really aren't but FICO says it is. Anyway, I would have to assume that the $$$$ balance plays into it. On your example, I wouldn't think there would be a difference because $500 between your scenarios is nothing.

[MarineVietVet]

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@Anonymous wrote:
Assuming person A and person B have the exact info on their reports and each has only one credit card, whereas: Person A has an outstanding balance of $300 on a credit card with a $1,000 (30%) Person B has an outstanding balance of $1,500 on a credit card with a $5,000 limit (also 30%) So my question is would person B receive more credit score points because the weighted dollar value is high! Thanks in advance!

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Welcome to the forums.

I know that scoring is not supposed to look at credit limits but only how much of that limit is being used at any point in time but.........I can't say that person B would not be looked at more favorably for having the higher limit. I don't think there's ever a way to really know that.

Just my opinion.

From a BK years ago to:
9/09 EX pulled by lender 802
3/10 EQ- 800
4/10 TU -772

You can do the same thing with hard work

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[RobertEG]

Theroretically, with identifcl % util and all else equal. the scoring algoithm, from what FICO has told us, should score approx.  the same.

But I would take person B's CR ovewr that of person A.. 

First, it has lower future potential of suffering an in increase in % util in the future than does CR A, or going over limit  Lower CL cards are higher maintenance cards.

Second, credit evaluation is not all simply about your three digit FICO score.  Upon a manual review of the CRs, person B has clearly achieved more available credit than person A.  Potential creditors might assume a postive reason for that.

[Anonymous]

Thanks all! I'm going to do an experiment and see if I increase one card and keep the ratios the same if that results in a higher score.  Will advise in a few months if it made a difference

[Anonymous]

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@Anonymous wrote:

Thanks all! I'm going to do an experiment and see if I increase one card and keep the ratios the same if that results in a higher score.  Will advise in a few months if it made a difference

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OOOhhhh!  There's a research project in the works!  WTG Jped!  I love research projects.  Sometimes they're just darn fun.  And educational, to boot!

For other forum readers, especially newbies, it's good to note that FICO doesn't score on credit limits, only utilization.

On the other hand, If you get your scores from FAKO sites and then read their recommendations, it can become very confusing because they often cite reasons like "You have low credit limits on your cards."  If you can keep the FAKO reasons and recommendations out of your mindset, and just concentrate on FICO's reasons and recommendations, you will have much greater success in raising your FICO scores. 

And I always like to cite DH's FICO - He was over 800 with only one cc, and it had a CL of $500.  Just another testimonial that cl's won't hold your score down.

FICO keeps a pretty open book on part of their scoring criteria by publishing their reason codes.  You can google them or they are posted here:  

FICO scoring reason codes

FICO Reason Code #10 deals with utilization on revolving accounts.  There is, however, no FICO Reason Code for low credit limits.   Hope that's helpful to others who are reading this post and wondering how CL's affect FICO's.  (In a nutshell - CL's don't affect FICO scores, although utilization does). 

[Anonymous]

BeamMEup; what percentage/utilization does your DH have on his $500 card every month?  Does he have any other revolving credit products?

[Anonymous]

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@Anonymous wrote:

BeamMEup; what percentage/utilization does your DH have on his $500 card every month?  Does he have any other revolving credit products?

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Hi Jped,

No, at the time it was his only OPEN revolving account.  (He currently has five - this was about a year ago.)

Let's see - I'll check what his reported balances were back then - yep - $27 on a $500 card (that's 6% utilization because it's rounded up).

And one month later, his score dipped 16 points when he let a $135 balance report on that $500 CL card.  (That's a 27% utilization).

Your mileage on utilization impacting your FICO score may (and probably will) vary.  It depends on what else is on your credit report, and of course what bucket you're currently sitting in.

[marty56]

Looking at this another way, what if the same person whent from a CL of 1k and a $90 balance to a CL of 10k with a $900 balance one month later.  Ignoring the 1 month age factor and no other side effect going on, IMHO their score would remian the same.