News on my new UT experiment.

[Thomas_Thumb]

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@SouthJamaica wrote:

When I went from .3% to 3.9% utilization, then back down to .3%, my scores didn't flinch either way.

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I let overall Util fluctuate between 1% and 6% over a period of months and saw no change in Fico 8 or Fico 4 classis scores.

Only score change was when a lone inquiry dropped off my EQ report in June 2015. My TU and EX classic scores (no inquiries) remained constant but EQ Fico 4 showed a 13 points increase in July 2015 due to the inquiry reaching 1 year and aging off.

Sandibeach22: I recall recently seeing a post om myFICO by someone else (with a stable profile) who reported a 6 point drop and subsequent rebound when util went above and then back below the 10% aggregate threshold. Other factors, in that case, appeared to be held constant. So... a boost in score with utilization above 10% means some other factor(s) are in play.

BTW - Fico 8 does appear to favor having more than one card in play - if you have 23 cards, then 3 to 5 reporting a balance might be optimal for building credit history and score over time. Also, as your U% drops back below 10% your score likely will rise. Try keeping same # cards reporting but pay down balances as a 1st step. That would be interesting data.

Note: During any 12 month period of time, I make sure all my cards report a non zero balance at least twice. Not a problem for me as I only have 6 active cards. You might want to post a balance at least once every 12 months on primary cards and at least once every 24 months on secondary cards. If you don't show use on a store card for more than 3 years it might be closed due to inactivity - happened to me on a Kohls card.

[NRB525]

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@Revelate wrote:

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@CreditDunce wrote:

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@OmarGB9 wrote:
I was poking around the different forums here and I was reading that sometimes, somehow, "bringing to life" old cards that haven't been used in a while can actually boost your score. No idea why, and I don't know how true it is, but maybe your experience somewhat proves that theory.

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Inactive TL's aren't used in utilization scoring.   By using the inactive credit card, the CL gets added back into your utilization.  Potentially, reducing your overall utilization.

For the OP, I would suspect it isn't the higher utilization driving their score upward.  I would guess it is something aging.  Or possibly utilization on a installment loan dropped below a threshold.  FICO can be very mysterious.

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+1.

Can't test changes in isolation unless one's report is astoundingly stable: Sandi yours isn't with your applications .

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wait, WHAT? Let's think about this people. All those myFICOers who are paying 90% of their cards prior to statement cuts, so only one reports a small balance, month after month after MONTH are effectively taking all those cards out of their utilization denominator, right? So they aren't at 1%-10% utilization, because half or 3/4 of their CL are ignored. Right? They are at some higher utilization percentage, dependent on when the card becomes "dormant".

And regarding the drop people are seeing when a zeroed card comes back on line and reports something, That is simply "taking on new debt". The card needs to be PIF then used again in the next month, and next, so it reports something on those next statements. Then the score has a chance to stabilize with that now consistently reporting balance.

I've been ensuring that all my cards report balances. At first because I had to, then because I wanted to, and now because I have to to keep the CL available in my overall utilization.

[Thomas_Thumb]

Agree -  It is best to rotate through them at least once every 24 months. I am not aware of any model that would consider a card inactive/dormant in less than two years.

I would have difficulty rotating through 10 or more cards. With 20+ cards lying around, I would lose a few. My wallet is too bulky as it is.

[Revelate]

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@NRB525 wrote:

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@Revelate wrote:

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@CreditDunce wrote:

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@OmarGB9 wrote:
I was poking around the different forums here and I was reading that sometimes, somehow, "bringing to life" old cards that haven't been used in a while can actually boost your score. No idea why, and I don't know how true it is, but maybe your experience somewhat proves that theory.

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Inactive TL's aren't used in utilization scoring.   By using the inactive credit card, the CL gets added back into your utilization.  Potentially, reducing your overall utilization.

For the OP, I would suspect it isn't the higher utilization driving their score upward.  I would guess it is something aging.  Or possibly utilization on a installment loan dropped below a threshold.  FICO can be very mysterious.

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+1.

Can't test changes in isolation unless one's report is astoundingly stable: Sandi yours isn't with your applications .

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wait, WHAT? Let's think about this people. All those myFICOers who are paying 90% of their cards prior to statement cuts, so only one reports a small balance, month after month after MONTH are effectively taking all those cards out of their utilization denominator, right? So they aren't at 1%-10% utilization, because half or 3/4 of their CL are ignored. Right? They are at some higher utilization percentage, dependent on when the card becomes "dormant".

And regarding the drop people are seeing when a zeroed card comes back on line and reports something, That is simply "taking on new debt". The card needs to be PIF then used again in the next month, and next, so it reports something on those next statements. Then the score has a chance to stabilize with that now consistently reporting balance.

I've been ensuring that all my cards report balances. At first because I had to, then because I wanted to, and now because I have to to keep the CL available in my overall utilization.

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Tradeline inactivity as it's understood: it was demonstrated previously though I never saw it explicitly other than in some anecdotal reports by users, that an account that's idle for a WHILE, read more than six months might be a year, can discount an account from scoring.  It's probably tied around the ability to generate a FICO score which is why I would suggest 6 months.

Based on my own testing I'm confident it's on Date of Last Activity / Date of Last Report / Date of Last Update, whatever the bureau has it listed as, rather than balance.  I've had some of my oldest accounts flatlined for 12 months or more on my report and not seen an issue.   My current anchor BOFA card has been flatline for 7 months as of today without issue, but BOFA dutifully reports $0 every month.

A reported balance of $0 is still active.   The only one of my lenders which doesn't report a $0 statement is Synchrony.

This might have changed under FICO 8, maybe; my data on this doesn't come from the old Scorewatch unfortunately though never seen a random drop in DCU either.

Actually I wonder if it's testable with a store card explicitly; wasn't intending to do much with the Wally card other than close it in the future, may as well let it idle for another 4+ months and see what it does.

[CreditDunce]

If you have one card reporting 3% balance and all others at $0, your overall util is at most 3%, assuming all of your other credit cards are considered inactive.  If you are only letting one card report a small balance, then if nothing else, you are not getting into credit card debt.  I think that is the best reason for someone with shaky credit to follow the only one card reporting advice.  As a bonus, it will make it less likely you will face AA with a max'd out credit score and low utilization.

Personally, I am in the "let the cards report what they may" camp.   But there are good reasons why someone else may want to only let one card report a balance each month.

[NRB525]

That person may think there are good reasons to keep only one card reporting, and pay prior to statement cut.

I don't think that's a good way to actually build history in the file, other than showing that defaults haven't happened. Yet.

In the risk factors for AA, going from nearly all cards zero, to suddenly showing some build up of reported balances is often a trigger for AA algorithms. When the cards report balances more consistently, PIF balances preferred, then fluctuations in the balances are expected and are not as twitchy in the AA algorithms.