@racer-x wrote:
@Anonymous wrote:
@gdale - +1
@racer-x - Incorrect. Your score will go up when a minimal balance reports on one card. For more details read the thread linked below.
@SMDLiquid - Please refer to this thread for a more detailed discussion - http://ficoforums.myfico.com/t5/General-Credit-Topics/Credit-utilization-and-your-FICO-score/m-p/3772545#M201833
Geez, I understand all that....but when a previously reported $0 balance account reports an actual balance, he will not get as many points back.
Let me show you my link here: www.let's say dude had 5 cards with balances and he PIF'd all of them but one card and left it 1 -9%. That's great. Theoretically he'll be at optimum fico points. Now lets say he has 5 accounts that he PIF's and he subsequently loses say 10 points. And then, come next statement cuts, he allows one account to report that 1-9% balance, and he gains 6 pts back...I say he now gets dinged for having an account reporting a "NEW" balance in essence. If that was not the case and I'm an idiot, then he may have gotten 8 pts back if there is no 'dingage' for an account reporting a "NEW" balance....com.
Jeebus, I'm a credit master... i don't need no stinkin' links. lol.
The loss of 10 points and gain of 6 points is not due to an account reporting a balance. The change is likely due to the change in the overall credit mix of the user. Your FICO scoring is not based on static percentage values of every category. As your credit profile changes the respective weights of each category (e.g. utilization) on your report changes. Something as little as change in AAoA (time passes) on your account can alter the weight utilization has on your score and thus cause an increased or reduced gain back in points when you go from reporting a 5% balance to a 0% balance back to a 5% balance. If time was frozen during these changes and the report was kept identical, you gain back in points should be identical to the points lost.
People frequently make the mistake of assuming categories have a fixed value (e.g. Utilization having a 30% weight on your score). If all categories had a fixed value, competitors would have easily broken down and replicated the FICO formulas. Moreover, change in utilization would have an identical impact on someone with an 800 score or 500 score. Because categories have dynamic values that change as your profile changes, you might not get back the same number of points as you lose when you change and bring back your utilization to a past data point.
Finally, I meant no disrespect with my earlier post. I am not a "credit master" and most people who post here are not as well. I know more than most and less than some, but I occasionally post something incorrect. Stating that you get dinged for an account reporting a new under 10% balance when all your accounts earlier had no balances is incorrect.
