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How exactly do charge cards impact utilization?

Valued Contributor

How exactly do charge cards impact utilization?

I have a Amex Zync NPSL, and it reports on my CR as a revolving account.  Last report I pulled showed limit as blank, high credit as 1,017, and balance as 25.

 

Is this total balance included in my utilization calculation?

 

I have 30,820 in credit, and typically post a balance on one or two cards between expense reimbursements.  I update my utilization percentage anytime a statement posts so I know where I stand if applying for credit, but I'm looking for some clarification in how to calc the Zync.  Is the high credit used as the CL, or is the card not considered at all?

 

I've heard several answers on thsi topic and would like some clarification.

 

Thanks,

3-26-15: FICO EXP: 828 - EQU:820 - TRAN: 828 - AVG: 825 +275 points from JUN 2008 - MY CREDIT JOURNAL

Message 1 of 8
7 REPLIES
Moderator Emeritus

Re: How exactly do charge cards impact utilization?

It will only impact TU98. Other used FICO versions, including the EQ FICO on here, will ignore it for util calcs. For TU98, it is factored into util via the balance and high balance.

Message 2 of 8
Valued Contributor

Re: How exactly do charge cards impact utilization?


llecs wrote:

It will only impact TU98. Other used FICO versions, including the EQ FICO on here, will ignore it for util calcs. For TU98, it is factored into util via the balance and high balance.


Ah...  so if I allow a high balance statement on that card one month, it will improve my TU 98 utilization going forward...  But for the other scoring models I can let whatever balance I want post and it doesn't matter.

 

Well, I guess I know which card I'll be using for my next Tuition payment. 

 

Now, the question is "who still uses TU 98?"

3-26-15: FICO EXP: 828 - EQU:820 - TRAN: 828 - AVG: 825 +275 points from JUN 2008 - MY CREDIT JOURNAL

Message 3 of 8
Valued Contributor

Re: How exactly do charge cards impact utilization?

At this time I have two credit card balances reporting. A small balance on a card that both EQ and TU use for util. And a large balance on a card that TU doesn't use for util. The TU util is 1% and the EQ util is 10%. But the two scores are the same, which indicates that just because a card isn't used for util doesn't mean that its balance goes unnoticed.

Message 4 of 8
Moderator Emeritus

Re: How exactly do charge cards impact utilization?


p- wrote:

llecs wrote:

It will only impact TU98. Other used FICO versions, including the EQ FICO on here, will ignore it for util calcs. For TU98, it is factored into util via the balance and high balance.


Ah...  so if I allow a high balance statement on that card one month, it will improve my TU 98 utilization going forward...  But for the other scoring models I can let whatever balance I want post and it doesn't matter.

 

Well, I guess I know which card I'll be using for my next Tuition payment. 

 

Now, the question is "who still uses TU 98?"


The only impact a balance would post would be that it counts towards the number of TLs reporting a balance and it could count towards amount of debt (revolving debt I think the FICO code says...can't remember). Both are minor compared to util IME.

 

Who uses it? Not many. My Lending Club lender used/still uses it. There are a seldom few straglers in Mortgage Loans who say their TU98 matched their lenders. There are not many out there though.

Message 5 of 8
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Valued Contributor

Re: How exactly do charge cards impact utilization?


llecs wrote:

The only impact a balance would post would be that it counts towards the number of TLs reporting a balance and it could count towards amount of debt (revolving debt I think the FICO code says...can't remember). Both are minor compared to util IME.

 

Who uses it? Not many. My Lending Club lender used/still uses it. There are a seldom few straglers in Mortgage Loans who say their TU98 matched their lenders. There are not many out there though.


Hmm.  So the answer seems to be the same as always - stay under 10%, pay on time, and the scores will come...

3-26-15: FICO EXP: 828 - EQU:820 - TRAN: 828 - AVG: 825 +275 points from JUN 2008 - MY CREDIT JOURNAL

Message 6 of 8
Established Contributor

Re: How exactly do charge cards impact utilization?

I just got an Amex PRG. I PIF every month on every card. It seems that I can radically improve my utilization calculation just by moving my spending from my amex BCE to my amex PRG.

For example, last month my utilization reported as 14%, and I PIF. If this month I put that exact same spending on my PRG instead my utilization will be near zero.

 

Even someone who carried a balance could move the spending that they plan to pay off to a charge card and reduce their utilization by that amount.

Am I right?


RBC Visa $11k || Amex BCE $40k || BoA Travel $15k || FirstTech MC $5k || Amazon Store $5k || BECU PLoC $10k || Discover Miles $18.5k || CITI DC $11.5k || CHASE Amazon $8.5k // AU on DW's Costco Visa $12k FICO 763
Last Inq 08/2017
...
Message 7 of 8
Valued Contributor

Re: How exactly do charge cards impact utilization?


Canadian-In-Seattle wrote:

I just got an Amex PRG. I PIF every month on every card. It seems that I can radically improve my utilization calculation just by moving my spending from my amex BCE to my amex PRG.

For example, last month my utilization reported as 14%, and I PIF. If this month I put that exact same spending on my PRG instead my utilization will be near zero.

 

Even someone who carried a balance could move the spending that they plan to pay off to a charge card and reduce their utilization by that amount.

Am I right?


For the most part, yes. I've been doing that for a long time. Most of my spend is on Amex but varies month to month.

 

For years I depended on FICO 4 not being affected by Amex balances. However, I noticed when FICO SW converted FICO 8 that my EQ scores did factor in Amex util much like the old FICO 98 did. EX and TU FICO 8 scores remain unaffected.

 

I ran some tests and put almost 40k on my Amex but only $500 ish on all the other cards. That also set the high balance and overall util including the Amex HL was about 40%. My EQ FICO dropped over 30 points when the Amex reported while TU and EX were unchanged.

 

I was frankly surprised as it is widely believed that charge cards do not affect utilization and it is also odd that the same generation of FICO score should respond differently to charge cards. However it is known that FICO taylors its algorithms for each CRA and I have seen a few other reports where people have also tested this and found EQ FICO 8 responds to Amex charge card balances. 

 

As an aside almost all my creditors have pulled EX which wasn't impacted. I still use Amex for large purchases, rarely prepay to optimize FICO,  and really don't pay much attention to my FICO scores other than out of curiousity.


I have reestablished credit over the last couple years
so my moniker is, well, rather out of date.

WM Discover $1800, WF Plat 12k, Chase Freedom Siggy18k, Amex Plat (60k H/B), Citi AA EWMC 25k
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