Tradeoff of utilization versus established history in FICO scoring

[Anonymous]

I am in the fortunate position that I am a FICO high achiever with scores currently in the 780s (of course who knows with Experion but that's another issue...).  But I still want to max my score as I am about to refi. 

So my situation/question is this.  I travel extensively for work and use my own credit cards.  At any time during the month, I could easily have between 5-10K in travel expenses (all reimburseable).  I pay the credit cards off in full every month.  But my understanding is that the utilization part of the FICO computation is based on whatever is reported by the credit card to the CRAs.  So if I have $10K in travel expenses on the cards when the report is made, that counts toward my utilization, regardless of whether I pay those off every month.  And note than when I have that much I have >10% utilization.  Is this interpretation correct?  If so, would it be in my best interest to open up more credit cards and never use them, so that I keep the utilization lower?  I know that this then reduces my establish history score (currently a a high-scoring criterion for me). 

Is there an online calculator or some other tool that will let me play with the variables so I can see how opening new cards - therby decreasing utilization and but also hurting the established history - would impact my overall FICO score.

Many thanks for any insight or help with any of the issues I raised.  

Message Edited by gary123 on 05-26-2009 06:12 PM

[RobertEG]

I dont think that would be the right approach. If you open new cards, then you will have to track their individual % util each month to ensure that they dont have a high % util reporting balance, and it will hurt your AAoA, not to mention the new inq hits you will take for each new account.

If you can pay to well under 10% each month on existing revolving accounts and are now in the 780's, that tells me you have all the current right mix for FICO scoring.  I would suggest that you know the actual date that each current CC reprots to the CRAs each month, and simply adjust your payment schedule to get your payment into them before their reporting date.

As for your question about online calcultors to enable you to fine tweak you scores in the short term, forget it.  The FICO simulators are all stretched out, intentionally, in order for you to NOT be able to see very short term and individual effects, for that would enable reverse-engineering of FICO scoring. They show only longer term affects.  You dont need a calculator to know that you must simply pay down, in the month or two before appy'ing for new credit, to a %util on all cards of as low as posible, with preferably at least half showing 0 balance.

Message Edited by RobertEG on 05-26-2009 06:38 PM

Message Edited by RobertEG on 05-26-2009 06:42 PM

[RobertEG]

Gary, I offer another suggestion.

If you travel that extensively, do you have a business CC?

Most business CCs dont report to the CRAs, and thus have no FICO impact whatsoever unless you miss a payment.

So if you carry a % util of over 10% on a business card, it is invisible to FICO scoring.

That is the only card I would see worthwhile for you to consider opening, but again, not for the very short term, because it will still involve a new inq.

[Anonymous]

Robert,

I didn't get an email notifying me that someone responded (does that functionality actually work?) so I am just checking now.  Your first point of advice on adjusting my payment to match up against CC's reporting date to the CRAs is a good one and I will do that.  Thanks.  As for the business CC issue, I am self-employed, so I am more or less SOL on that I think.

I really appreciate the advice.  Thanks again.