@jamie123 wrote:
@NRB525 wrote:
@jamie123 wrote:
@NRB525 wrote:I don't think we are disagreeing fundamentally, but it is important to be understanding terminology.
If total utilization on all cards goes up, because the cardholder keeps the same dollar amount reporting on one card and then adds dollar amounts to the other cards, yes, the score will go down because total utilization has gone up.
If more cards are allowed to report, and total utilization, the sum of all card open balances, does not change, this is where I think that amount of total utilization, where it lands on individual cards, will make very little difference, once the cards are on this total utilization for a while. Part of my assumption is that cards are not going in and out of $0 balances, they constantly report some amount.
As to "Always raise your score by using all cards zero, one at 1% to 9%", in order to prove this, you must maintain the same total dollar amount outstanding, not reduce the total dollar amount outstanding by just zeroing the other cards and keeping the one card at the same amount. This is where I think people get confused: In the act of getting to that one card reporting, the real impact is; total amounts outstanding are also declining, which raises the score. Separating out whether that was because one card reports, or total amounts outstanding declined, is the challenge. I think the most impact is because total amounts have declined, not the one card only reporting.
People trying to optimize score are in the act of driving down open balances. That is the action that is improving their score.
This has been proven on this forum many times. I see it in action when I groom my scores to 1 card less than !0%.
This happened to me before I started using just one card for all my subscriptions and is the reason I started using one card for my subscriptions:
I was grooming my scores to be ready to app. I had all my cards paid to $0 and ready to report. A monthly subscription to a VOIP (Voice Over Internet Protocol) for $3.95 was charged to one of my cards 2 days before the due date and I didn't catch it in time to pay it down to $0. When that card reported the $3.95 balance, I lost 4 points. For every card more than one that reports a balance more than $0 you will lose anywhere from 3 to 5 points.
This is a one time event, a new shock to the calculation: That card went from $0 to something more than zero: Taking on new debt. It is also the only card, at the time of that calculation that added a balance. The total balance outstanding went up.
Did the -4 points result from:
1) The card suddenly appearing as "taking on new debt"? Likely.
2) The card count, those cards with any balance, suddenly increasing by one? Unlikely.
3) The total amount outstanding on all cards increasing by $4? Likely.
To complete the cycle properly, if that card had been allowed to continue to report $4, while the intended one card maintained the same balance, all through the next reporting cycle, a month or more, would the score stay down by 4 points, or would it recover some of those points? This is the critical part of the validation that no one is willing to, or has the patience for, completing.
Instead, everyone parrots the same "All cards but one" because on the surface, short term, it looks correct. Many of those same people also maintain zero balance cards, so when those cards report anything, the score dips.
Saying a FICO score change is "proven" with a one time event is just not possible. FICO is very complicated and a window of one day does not prove anything. 100 people going to look at the same one day window, without expanding the review to multiple months, also does not prove anything. Just look at all the reports here of people seeing some alarming change in their score, and they come back a month later and say "Oh, nevermind, most of the points came back".
Would a third card reporting $4 also result in a 4 point decline? doubtful.
How about a fourth card reporting $4? Extremely doubtful. Impacts such as this, whether multiple cards, changes in utilization, number of INQ, all have a declining impact the more of them are piled on to the calculation. They are not 1:1 every time a new INQ is added for example.
And most importantly, most relevant, and the simplest question, is 4 points really anything other than noise?
@jamie123 wrote:
@NRB525 wrote:
@masscredit wrote:So you give up some points to get good marks by letting balances report? Does it matter how much reports? Can it be something small like $5.00 or should it be a normal use amount? There have been times when I needed to apply for credit that wasn't planned for so I was glad that I always have my scores groomed to be their best. Plus, after rebuilding, I find it hard to give up any points. I've been turning over rocks searching for any points that I can add.
Well, for starters, I would not let the JCP, Walmart, or Target cards report anything unless it was something you really had to buy.
As for letting normal spend report on a PIF card, if you let that happen for a few months, I think you will see your score stabilize anyway at about the level you are already at. So I don't consider it giving up any points, the key is to stabilize that balances profile. I really think the main driver is payments on time and overall utilization, not individual card utilization if those cards are used consistently.
For example, I got both the Marriott and Hyatt cards recently. Routed regular spending through them to get the bonus, and now I use them for dining only, will use them when I go to those hotels. For the April report, they are $44 and $32 balances, because I don't eat out much. Freedom takes groceries for now, but once I start routing spend through my Discover, each of Marriott, Hyatt, and Freedom will probably get $10 in charges each month. If a card reaches zero, I'll take it out to use it for a gas fill up ($40) a cafeteria bill ($5) or a grocery day ($20) or if it has a good BT offer, load some of my balances on it so I don't have to worry at all for a few months. Because I rarely let a card go to zero, there's no subsequent penalty for the card to go from the $0 to a small balance, it already has a balance.
You can try to manage your cards with only one reporting. That may indeed get you a few extra points. My argument is, is it really worth the effort to do that, and can you quantify how many extra points you might be getting? I also think, if you have a card, why is it not being used, even for PIF spend? why have the card at all?
I disagree with the statement that I highlighted in red above. Your score will never stabilize at a higher score with higher UTI. You will always be able to raise your score to the highest it can be by doing the 1 card less than 10% and all the rest $0.
Your scores will drop by letting all your cards report a small balance but it is the price we have to pay to build better history. If you have halfway decent scores to start with, we are talking about 10 to 20 point drop with all cards reporting but you build much better history.
The way that I do it is to use one primary card a month for most of my purchases and maybe put one small purchase on the other cards. I don't go out of my way to do it but say, when I am filling my car with gas, that purchase will go on one card and be the only purchase on that card that month. When I buy lunch, I will use another card for that purchase and let that report. I will rotate which card that I use as my primary card every few months. I have one card that I use specifically for all my subscriptions like MyFICO, Netflix and my cell phone bill. I very rarely use that card for anything else.
You gain all the points back as soon as you groom the reporting back to 1 card less than 10% but now you also set yourself up for better and auto CLIs. Some CCC won't give you CLIs unless you have reported balances for the previous few months. (Walmart)
EDIT: I also control the reporting balance of that month's primary card by paying the balance down before the due date if it gets too high for my liking.
History is built on an account whether or not a balance reports, for awhile now payments made on an account are reported even if you are zeroing the balance right before the statement cut date.
@gdale6 wrote:
@jamie123 wrote:
@NRB525 wrote:
@masscredit wrote:So you give up some points to get good marks by letting balances report? Does it matter how much reports? Can it be something small like $5.00 or should it be a normal use amount? There have been times when I needed to apply for credit that wasn't planned for so I was glad that I always have my scores groomed to be their best. Plus, after rebuilding, I find it hard to give up any points. I've been turning over rocks searching for any points that I can add.
Well, for starters, I would not let the JCP, Walmart, or Target cards report anything unless it was something you really had to buy.
As for letting normal spend report on a PIF card, if you let that happen for a few months, I think you will see your score stabilize anyway at about the level you are already at. So I don't consider it giving up any points, the key is to stabilize that balances profile. I really think the main driver is payments on time and overall utilization, not individual card utilization if those cards are used consistently.
For example, I got both the Marriott and Hyatt cards recently. Routed regular spending through them to get the bonus, and now I use them for dining only, will use them when I go to those hotels. For the April report, they are $44 and $32 balances, because I don't eat out much. Freedom takes groceries for now, but once I start routing spend through my Discover, each of Marriott, Hyatt, and Freedom will probably get $10 in charges each month. If a card reaches zero, I'll take it out to use it for a gas fill up ($40) a cafeteria bill ($5) or a grocery day ($20) or if it has a good BT offer, load some of my balances on it so I don't have to worry at all for a few months. Because I rarely let a card go to zero, there's no subsequent penalty for the card to go from the $0 to a small balance, it already has a balance.
You can try to manage your cards with only one reporting. That may indeed get you a few extra points. My argument is, is it really worth the effort to do that, and can you quantify how many extra points you might be getting? I also think, if you have a card, why is it not being used, even for PIF spend? why have the card at all?
I disagree with the statement that I highlighted in red above. Your score will never stabilize at a higher score with higher UTI. You will always be able to raise your score to the highest it can be by doing the 1 card less than 10% and all the rest $0.
Your scores will drop by letting all your cards report a small balance but it is the price we have to pay to build better history. If you have halfway decent scores to start with, we are talking about 10 to 20 point drop with all cards reporting but you build much better history.
The way that I do it is to use one primary card a month for most of my purchases and maybe put one small purchase on the other cards. I don't go out of my way to do it but say, when I am filling my car with gas, that purchase will go on one card and be the only purchase on that card that month. When I buy lunch, I will use another card for that purchase and let that report. I will rotate which card that I use as my primary card every few months. I have one card that I use specifically for all my subscriptions like MyFICO, Netflix and my cell phone bill. I very rarely use that card for anything else.
You gain all the points back as soon as you groom the reporting back to 1 card less than 10% but now you also set yourself up for better and auto CLIs. Some CCC won't give you CLIs unless you have reported balances for the previous few months. (Walmart)
EDIT: I also control the reporting balance of that month's primary card by paying the balance down before the due date if it gets too high for my liking.
History is built on an account whether or not a balance reports, for awhile now payments made on an account are reported even if you are zeroing the balance right before the statement cut date.
So this is a meaningless debate? Usage of the card, dollars flow, not reported statement balances are the relevant metric for the latest FICO model?
@masscredit wrote:I can see both points here. I keep notes for all of my scores. This is for the EQ08 scores that I get here over the last few months -
10/24 - 658 - 4 cards reporting - Cap 1 charged membership fees to both cards earlier than they were suppoed to
11/05 - 681 - 3 cards reporting
11/20 - 668 - 0 cards reporting - accidently paid off the one card that would report
11/28 - 681 - 1 card reporting
12/04 - 684
01/15 - 678 - $1578 Cap 1 $245 Barclay
02/10 - 686 - $60.00 Cap 1 $453 Barclay
I'm stiill at 686. Wondering if I will gain a few points when the Cap 1 reports $0.00. That statement closed on the 6th. No change so far.
When my Barclay's statement closes tomorrow, it will be at $630.00 which is 7.8% of that card's limiit. I guess that is rounded to 8%. It will be 2% of my total avaialble credit. To test that theroy, I could play with balances after that to keep the same dollar amount but spread it out between a few cards for a few months. Hum...
Do you have balances from the earlier days? Total amount outstanding at those points in time?
@NRB525 wrote:
@masscredit wrote:I can see both points here. I keep notes for all of my scores. This is for the EQ08 scores that I get here over the last few months -
10/24 - 658 - 4 cards reporting - Cap 1 charged membership fees to both cards earlier than they were suppoed to
11/05 - 681 - 3 cards reporting
11/20 - 668 - 0 cards reporting - accidently paid off the one card that would report
11/28 - 681 - 1 card reporting
12/04 - 684
01/15 - 678 - $1578 Cap 1 $245 Barclay
02/10 - 686 - $60.00 Cap 1 $453 Barclay
I'm stiill at 686. Wondering if I will gain a few points when the Cap 1 reports $0.00. That statement closed on the 6th. No change so far.
When my Barclay's statement closes tomorrow, it will be at $630.00 which is 7.8% of that card's limiit. I guess that is rounded to 8%. It will be 2% of my total avaialble credit. To test that theroy, I could play with balances after that to keep the same dollar amount but spread it out between a few cards for a few months. Hum...
Do you have balances from the earlier days? Total amount outstanding at those points in time?
FICO 08 and prior FICO scores were built without payment information, only reported balances. VantageScore 3.0 and FICO 9 were built after payment data was included in CRA reports. FICO's banking blogs states there is a big risk difference between people that make minimum payments v those that make payments >2x the minimums but this data has only been available for roughly the last 5 years. Inclusion of this data is the likely reason these new scores are more predictive of risk in spite of ignoring paid collections.
I would expect large banks also look at this new data and possibly wrap it into the older FICO scores as some sort of tweak or, at a mimimum, use the additional data as a cross check on stated income since monthly spend can now be more accurately estimated.
I found out that 1 card reporting with total util at less than 10% gave me a boost and I lost 2 points when it went to 12%. The amount reporting on the card did not affect my score until it was maxed out. As always YMMV