@Revelate wrote:Revolving utilization is instant in time only.
That's been beaten to death over the years, not sure where this theory of utillization over time mattering with respect to FICO came from though I could hazard a couple of guesses.
CC users + CLD, we never get the full story. I've popped major balances on cards and paid them post-report, zero zip swabo CLD.
I don't think anyone is saying utilization percentage over time relates to FICO score, it's a case of building credit history for the algorithms to see.
Regarding getting the full story, yes, questions were asked to clarify several of these situations and "pop goes the balance" was one of the likely risk factors. You likely didn't get CLD because you didn't cross paths with the right bank, or had sufficient balance history to not trigger the algorithm at such a bank.
And just to be crystal clear: I NEVER predict AA. What I try to do is outline the methods one might use to try to reduce the chances of AA.
@NRB525 wrote:
@Revelate wrote:Revolving utilization is instant in time only.
That's been beaten to death over the years, not sure where this theory of utillization over time mattering with respect to FICO came from though I could hazard a couple of guesses.
CC users + CLD, we never get the full story. I've popped major balances on cards and paid them post-report, zero zip swabo CLD.
I don't think anyone is saying utilization percentage over time relates to FICO score, it's a case of building credit history for the algorithms to see.
Regarding getting the full story, yes, questions were asked to clarify several of these situations and "pop goes the balance" was one of the likely risk factors. You likely didn't get CLD because you didn't cross paths with the right bank, or had sufficient balance history to not trigger the algorithm at such a bank.
And just to be crystal clear: I NEVER predict AA. What I try to do is outline the methods one might use to try to reduce the chances of AA.
I may have misinterpreted it but it's been a recurring theme over the last couple of months in the forum.
How would you realistically test this? Short of two no files, built identically, and then held over a period of time with the only difference being their reporting balances, I don't really see how you could even check from a control standpoint.
We have the majority of people who find this forum, get 3 cards or thereabouts, then proceed to follow the advice of 1 card reporting a balance, 1-9% utilization, etc ad naseum, and after six months or a year they all wind up in the same place... and at least anecdotally, the people who come in with high utilization, pay off, likewise get to the same place and I think this extends to pretty much anyone with similar history and similar tradelines whether they were FICO strategists or paying a boatload of interest. It'd be a non-trivial amount of work to "prove" that either way from the data on the forums, but if you or someone wanted to dig, it could be done.
Over time there's been a tendency to ascribe FICO even more intelligence than the algorithm really has any chance of having; I'm not saying necessarily that's the case here but the core of the algorithm hasn't really changed all that much. TBH payment history is frankly all about screwing up, having 3 vs 5 accounts doesn't really matter that much, and whether you report a balance every month or leave them at zero, matters not at all as long as they're still reporting the pretty OK's.
I more than willing to be proven wrong on this, but built a legitimate test scenario and see, the problem is a single file can't demonstrate it unless your theory is that 1 reporting balance over time will at some point see a non-trivial drop... but nobody to my knowledge has ever experienced that. Certainly all my data, and I would suggest the data of others that are testing over long periods, suggests that doesn't happen - my scores are massively flatlined as a general rule unless I have a fundamental change in my report, and that will likely continue until my derogatories are gone in a couple of years. Every one of my tests skews my score, and then when I fix it, it goes back. That's held revolving utilization wise, installment utilization, inquiry damage, and AAOA boundary thresholds.
Ok, I'm not being clear.
When I refer to algorithms plural, I refer to the bank agorithms that begin with the FICO score ("Oh, that's nice, what else is in this SP file we have here?") and proceed to notice increased balances, either on the bank itself, or on other accounts at other institutions, which show increased utilization relative to what that cardholder has demostrated in their past. Those bank algorithms are what decides to do the CLD that several people have seen. The CSR has no conception of even what an agorithm is ("When is my next coffee break?") and so has no hope of realizing why the CLD happened. The bank agorithm, however, is the Borg in the Bank that is constantly watching, and can be tripped up by changes in the file of a customer.
I don't dispute that someone can "optimize" their score by letting only one report. Real life is not necessarily about optimization however. It is about being able to borrow the funds you might need for a major purchase, and part of getting to that stage is showing responsible borrowing on a range of products, including, in my opinion, using revolving credit cards to run daily spend through to use that as a manufactured "borrowing" situation. PIF, no cost, shows usage, long term benefit to the ability to borrow in peace.
As I said, I don't predict that AA will occur if one just barely uses the cards and only lets $10 report, but it's a lot of work to hide all that credit card usage, when in fact, display of that history for all to see is a good thing in the credit file. Provided no payments are missed, of course. Yes, FICO doesn't care about that history of display, but any manual review, and likely most SP reviews, would benefit from seeing that.
In your own case, you've spent a lot of effort reducing displayed balances. That got you to your mortgage. My opinion is, and you can try to disprove this now that you have your mortgage, is that long term, your file would have been better served by letting more cards report balances, consistently, not just the first month, let it stabilize with those balances, low utilization, and the score would climb to where it ended up anyway. Then a final push to optimize at the end would tweak a few more points from the file.
Two points after skimming your message, will try to get a better response later but have to go get my car looked at after it apparently was hit by an EMP weapon:
1) I've never had any real debt, CC or otherwise, other than a car I paid off in 2 years and now the mortgage. Came from a cash-based existence and once getting my CC's never deviated from my spending habits so the historical balances aren't applicable in my case.
2) Bank algorithms, I think we can be well assured these take more data into account on one's credit report than FICO does, not less. As a result, the $0 reported balance is irrelevant as they can and almost certainly do look at reported payments which the majority of lenders now report.
Not sure if I read it fully, but if you can come up with a test case once my report stabilizes (mortgage and new tradelines report plus a month or two for the older inquiries to fall off), I'll see if I can test what you're looking for if the financial and time investment is minimal.
The change is simple. If 1 or 2 cards are being allowed to report now, then expand that to 4 or 5 cards, then keep the same 4 or 5 cards with some level of small balances reporting each month for 3 months. The intent is to cease the "go to zero, out from zero" cycles that we know cause score changes. Many on here go "out from zero", find a several point ding, then immediately go back the next month to zero. That's not giving the file enough time to get comfortable with the new card reporting a balance.
Regarding CC showing payments, I posed the question earlier but got crickets: I haven't run any of my CC as "pay to zero prior to statement cut" so I don't have any visibility to whether a full credit report with balances history would show payments if there were no balance. I think we went around about this earlier, and while balances on the statement are reported, I haven't seen any examples of payments when the balance is zero. I'm in the "trust but verify" camp, and since I can't verify in my own historical credit reports I'm relying on others to provide that example of pay before statement and still see payment on the CR.
Your historical balances would be based on regular spend going through. It doesn't have to be large amounts on carried balances. If statements reported balances, you'd have those historical balances on your report. If you pay prior to statement cut, then no historical balances.
Best of luck in the urban electronic warfare department.
@NRB525 wrote:The change is simple. If 1 or 2 cards are being allowed to report now, then expand that to 4 or 5 cards, then keep the same 4 or 5 cards with some level of small balances reporting each month for 3 months. The intent is to cease the "go to zero, out from zero" cycles that we know cause score changes. Many on here go "out from zero", find a several point ding, then immediately go back the next month to zero. That's not giving the file enough time to get comfortable with the new card reporting a balance.
Regarding CC showing payments, I posed the question earlier but got crickets: I haven't run any of my CC as "pay to zero prior to statement cut" so I don't have any visibility to whether a full credit report with balances history would show payments if there were no balance. I think we went around about this earlier, and while balances on the statement are reported, I haven't seen any examples of payments when the balance is zero. I'm in the "trust but verify" camp, and since I can't verify in my own historical credit reports I'm relying on others to provide that example of pay before statement and still see payment on the CR.
Your historical balances would be based on regular spend going through. It doesn't have to be large amounts on carried balances. If statements reported balances, you'd have those historical balances on your report. If you pay prior to statement cut, then no historical balances.
Best of luck in the urban electronic warfare department.
I can do that test once my report stabilizes no problem. Do you want same cards reporting balances or different ones?
As for it, I can assure you the payment is reported when balance is $0; cut and paste from a Experian report on a Barclays tradeline which got non-trivial use and had two months out of it at $0 when I got clean for whatever reason back then.
Balance History The following data will appear in the following format:
account balance / date payment received / scheduled payment amount / actual amount paid
Nov 2014: $0 / November 20, 2014 / $20 / $3,953
Oct 2014: $1,405 / October 20, 2014 / $20 / $573
Sep 2014: $553 / September 10, 2014 / $20 / $147
Aug 2014: $0 / August 20, 2014 / $29 / $2,894
Jul 2014: $2,922 / June 30, 2014 / $29 / $1,857
Jun 2014: $1,857 / no data / $20 / no data
May 2014: $0 / no data / Unknown / no data
Payment history which is all that gets looked at for FICO other than current balance and CL and open date, pretty OK's even when $0:
2014 DEC OK NOV OK OCT OK SEP OK AUG OK JUL OK JUN OK MAY OK