Understanding FICO® Scoring

[my-own-fico]

Adhering to sound advice, many of you probably don't have balances on most of your cards, but for those who do or did, do you remember what your score was? Five of my eight cards presently have balances, and my EQ is 781.

[Lel]

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my-own-fico wrote:

Adhering to sound advice, many of you probably don't have balances on most of your cards, but for those who do or did, do you remember what your score was? Five of my eight cards presently have balances, and my EQ is 781.

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A couple years ago, I did an experiment (sample size n=1) by letting balances report on about 8-10 different credit cards.  My score was originally in the low 800s, and as I recall it dropped to somewhere around the 780-790s - nothing too dramatic.  I'll have to go back and look for certain.  My overall utilization was below 9%, and I don't believe any card had more than about 20% utilization.  But the specific details are lost in the mists of time.

[RobertEG]

It is almost impossible to gauge how much one subcategory, such a cards with balances, effects scoring.

% revolv with balance is just one subcategory of revolving util, which is itself a subcategory of util of credit.

The revolv util subcategory alone includes criteria such as overall util, indiv util, individ acct balances, and % with a balance.  The weighting of those are not known.

Additionally, weightings shift with scoring bracket, or "bucket," so when all is combined, there is just too much going on to guesstimate the impact of one criteria based on anecdotal experiences. 

Best wisdom seems to be that % with balance should be kept below 50%.

[jello77]

Here is a recent post on the issue you asked about:

How # of cards with balance can effect FICO score

http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/How-of-cards-with-balance-can-effect-FICO...

[namvet]

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RobertEG wrote:

It is almost impossible to gauge how much one subcategory, such a cards with balances, effects scoring.

% revolv with balance is just one subcategory of revolving util, which is itself a subcategory of util of credit.

The revolv util subcategory alone includes criteria such as overall util, indiv util, individ acct balances, and % with a balance.  The weighting of those are not known.

Additionally, weightings shift with scoring bracket, or "bucket," so when all is combined, there is just too much going on to guesstimate the impact of one criteria based on anecdotal experiences. 

Best wisdom seems to be that % with balance should be kept below 50%.   +1   That has been my experience over the years!  Most will say 30% but less than 50% is not going to ruin anyone's credit other than a few points lost.  Unless you are in some kind of fico contest it doesn't matter.  You obtain credit to use it not to see what your score is or isn't.  I have always said that app sprees can do more damage than not using your credit!

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[MattH]

Hi everybody, been some months since I came here.

As for the question, I think my own case may be a pretty good natural experiment. My wife and I have been heavy "convenience users" for years: we don't carry much cash, we use credit cards a lot, we pay in full every month. The only interest we pay is the mortgage on the condo where we've lived since 2002. Neither of us has any negatives. Once a month I sit down and pay all my bills. When I do so, on each credit card I pick a round number slightly greater than its current balance because psychologically I happen to like (1) the feeling of owing nothing and (2) keeping the arithmetic simple. If one of my accounts happens to have a zero or credit balance on this day, I make an electronic payment of five dollars. Reason for making that five dollar payment when I owe nothing is because then I can sort by last payment in my online bill pay at my bank website and instantly verify that I am current on all my accounts.

Result of all this is (1) my credit is always basically clean, (2) utilization on all cards always well under 10%, (3) number of credit cards with balances ranges from one or two of them to all of them, and (4) total non-mortgage balance ranges from zero to a few kilobucks.

Based on how this affects my scores, which bounce around from 790s to over 800, I concluded some time ago that (1) TU cares most about total dollars owed and thus fluctuates the most for me, (2) EQ cares most about number of revolving accounts having balances, and (3) EX (when we could get our EX scores here) cares most about percentage utilization. Since all my cards have high limits, my EX score was therefore always my highest when I could get it, and fluctuated the least.

Conclusion: if all else is very clean, getting TU above 800 seems to require near-zero total non-mortgage balance. With total balance around a kilobuck or so, TU seems to top out around 795. When next I anticipate applying for credit, which won't be soon, starting several months before applying I will make sure to pay down all CC balances to zero as of billing date. This should push all my scores above 800.

[my-own-fico]

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MattH wrote:

I concluded some time ago that (1) TU cares most about total dollars owed and thus fluctuates the most for me, (2) EQ cares most about number of revolving accounts having balances, and (3) EX (when we could get our EX scores here) cares most about percentage utilization. Since all my cards have high limits, my EX score was therefore always my highest when I could get it, and fluctuated the least.

Conclusion: if all else is very clean, getting TU above 800 seems to require near-zero total non-mortgage balance. With total balance around a kilobuck or so, TU seems to top out around 795.

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Welcome back, MattH. Good to have you back.

Your EQ is right on. The EX though for me is blurred from inquiries at this time.

My TU experience is, sometimes, different. Last year at some point, my reported balances totalled $6000 (well outside of the average balance of ~$499 on revolving trades), and yet my TU was 810.

Speaking of totalled, I noticed your car accident story. The reason DW and I took a breather at our EQ peak was due to our installment loan for a new car reporting just days after. I guess we couldn't press for a judgment, as 1) our car was parked and no one was in it at the time it was rear-ended, 2) we don't have a sibling lawyer, 3) I don't know the first thing about judgments.

Since I'm OP and can elaborate any which way I see fit, well somewhat anyway, mods feel free to split off to the SmorgasBoard, I happened to encounter three cases of sleeping women all within the first hour this morning, 1) was reminded of the one who rear-ended our car, 2) read in the news about a woman who was texting in her sleep, 3) a woman who somehow drove off a road, across an entire beach and into the ocean, I don't know if she was asleep, but would she have completed the stretch while awake? Small world.

[smallfry]

TU is the only CRA that mentions my lack of an open installment as a negative. Number 1 matter of fact. I do have 4 closed autos on the report. No open installments does not appear on the other two as a negative. My scores range from 790-824.