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@SouthJamaica wrote:I was wrong about the first real movement occurring after a month. As soon as my Discover reported a $490, or 49%, balance, my EX score dropped 2 points.
Sounds like a number of balances reporting $0 change from the numbers involved assuming that was one of your $0 accounts previously. 49% wouldn't have triggered an individual tradeline penalty based on my data for my report anyway. IF you wouldn't mind letting us know what the previous balance was on the card and what the new aggregate utilization is, would help improve the data. My EQ / EX seemingly don't track the same on this calculation either which irritates the heck out of me, but in my case could be a data analysis issue.
Thanks for sharing at all though!
@Anonymous wrote:Great question, SouthJamaica.
Short answer:
(1) My guess is that, if you still have a number of accounts reporting zeroes, you will probably have little impact from this event. The "total utili" factor by itself (apart from all others in the Amounts Owed category -- see below) doesn't seem to make a big distinction between 1% and 8.9%.
(2) Remember that the factors in Amounts Owed are snapshots in time, and therefore the impact only lasts for as many months as the amounts are owed. This is by far the most fluid and easiest controlled FICO category.
(3) It's great to see you have the self-awareness to realize that you are just in a gardening phase, and therefore you have a huge amount of freedom to experiment and play. Since you don't need the scores for any impending purchase, you can and should play around. Track what happens and then let us know.
Longer answer:
There are a number of different factors that are all lumped into the Amounts Owed category, which as you know is 30% of your score. One such factor is the person's total utilization (in which all credit limits across all revolving accounts are added together and compared against your total revolving balances). Total util is an important factor, but it is only ONE of the many factors in this group. FICO also looks at the utilization of each revolving account considered by itself. It also considers the raw dollar amount of your revolving balances -- in these "dollar amount" factors it doesn't matter what your credit limits are. Another metric still looks at open non-mortgage installment loans and compares the amount you currently owe vs. the amount you originally borrowed. Another metric still looks at how many open accounts have a non-zero balance. And so on.
Your question focuses on one metric (total util) amongst several that FICO will consider. You do give some helpful info which is that each individual card will be under 30% with total util being 5%. Let's assume additionally no particular card will have a huge raw dollar amount on it, e.g. $7000.
Given that, my feeling was that your dental work won't have much effect, and the effect that does occur will have to do with (a) reducing the number of zero-balance accounts and (b) significantly raising the raw dollar amount being reported on certain accounts.
I would be interested to see where this comes from and just how much is has to be before it is a real factor. The reason I ask is that my parents have large reporting balances each month and both have 800+ scores. They run a business and run all bills through their credit cards, personal and business through typically 3 different cards. The business operates on an annual operating LOC so they don't pay interest until they borrow, as such using the grace period on CC's gives them interest free money for that time. Typical balances on thier cards run from 20k-30k or even more on months they receive large bills, like the annual fuel bill (over 30k a year). Their reported balances each month exceed 50k, of course this is under 10% of their total CL's. Each month these are PIF as the LOC interest is much lower then any credit card.
@Revelate wrote:
@SouthJamaica wrote:I was wrong about the first real movement occurring after a month. As soon as my Discover reported a $490, or 49%, balance, my EX score dropped 2 points.
Sounds like a number of balances reporting $0 change from the numbers involved assuming that was one of your $0 accounts previously. 49% wouldn't have triggered an individual tradeline penalty based on my data for my report anyway. IF you wouldn't mind letting us know what the previous balance was on the card and what the new aggregate utilization is, would help improve the data. My EQ / EX seemingly don't track the same on this calculation either which irritates the heck out of me, but in my case could be a data analysis issue.
Thanks for sharing at all though!
I started out on May 16th with: 10 accounts at zero balance, 3 accounts posting total balance of $241, representing less than .3% overall utilization
Over the next 5 days, I allowed 3 of the 13 revolving accounts to post a total of $1524.33, for 1.7% overall utilization, with individual account utilization ranging from 2.13% to 49%.
Don't know which posted balances reported to bureaus.
So an increase to 49% on a credit card only dropped the scores by 2 points? Could we know what the previous UTIL was on this CC? Thanks!
Hello Arumnus! I apologize for not replying sooner. I only now just saw your question to me (about the raw dollar amounts factor).
This was debated in another thread not long ago (as a result of me making a minor remark about the raw dollar issue). My feeling now is that it derailed that OP's original thread and that it "generated more heat than light.." (That's a phrase I heard 20 years ago and it has stuck with me!) So I am reluctant to discuss here (for fear of derailing another thread) the reasons why I think that some scorecards on some FICO models might consider this as one minor factor.
But if you would like me to, I will be glad to shoot you a private message where you and I talk about it 1-on-1. That way I can hear your thoughts without causing a thread to go in an unintended direction. Certainly for the purposes of this thread I am happy to retract that and say (for the sake of peace!) that raw dollar amounts don't matter at all -- all a person needs to think about is % utilization. (In practice I think that is likely to be true in most situations even if I had been right in theory.)
@joshall wrote:So an increase to 49% on a credit card only dropped the scores by 2 points? Could we know what the previous UTIL was on this CC? Thanks!
It was previously posted at zero balance.
@Anonymous wrote:Hello Arumnus! I apologize for not replying sooner. I only now just saw your question to me (about the raw dollar amounts factor).
This was debated in another thread not long ago (as a result of me making a minor remark about the raw dollar issue). My feeling now is that it derailed that OP's original thread and that it "generated more heat than light.." (That's a phrase I heard 20 years ago and it has stuck with me!) So I am reluctant to discuss here (for fear of derailing another thread) the reasons why I think that some scorecards on some FICO models might consider this as one minor factor.
But if you would like me to, I will be glad to shoot you a private message where you and I talk about it 1-on-1. That way I can hear your thoughts without causing a thread to go in an unintended direction. Certainly for the purposes of this thread I am happy to retract that and say (for the sake of peace!) that raw dollar amounts don't matter at all -- all a person needs to think about is % utilization. (In practice I think that is likely to be true in most situations even if I had been right in theory.)
You are very kind, CreditGuyInDixie.....
But as the OP I hereby give my blessing to your going into detail on the raw dollar amounts factor. I would love to learn more about that.
I promise I won't get derailed; as soon as I have something interesting to report about my experiment, I'll remember to post it!!!
So far, since that 2 point drop on EX nothing's happened, despite my adding another posted balance or two.
At this point I'm up to 3% overall utilization, much higher than I've been for a while.
Well thanks, SouthJamaica. How polite and sweet of you.
Tell you what, though. If it is ok, I am going to bow out of another (public) discussion of the raw dollar amount issue, at least for a little while. Arumnus and I will be chatting offline about it, and that will help me see whether I am off base or not. At some point down the road, we might create a new public thread for speculation/discussion.
What I can say for sure is that in most cases it is safe to ignore this purported factor as a possibility. For most credit profiles, all a person needs to watch is his ratios. (in the case of credit cards, the ratio of amounts owed to credit limit -- in the case of installment loans, the ratio of amounts owed to the original amount of the loan. The principle is the same in both, though the ratios for revolving lines have a substantially bigger impact than the ratios for installment accounts.) If the actual size of the dollar amount owed ever matters, it is minor compared to the ratio issue, and also never matters in most situations. (For most of us, keeping our ratios down necessarily keeps our raw dollar amounts low.)
@Anonymous wrote:Well thanks, SouthJamaica. How polite and sweet of you.
Tell you what, though. If it is ok, I am going to bow out of another (public) discussion of the raw dollar amount issue, at least for a little while. Arumnus and I will be chatting offline about it, and that will help me see whether I am off base or not. At some point down the road, we might create a new public thread for speculation/discussion.
What I can say for sure is that in most cases it is safe to ignore this purported factor as a possibility. For most credit profiles, all a person needs to watch is his ratios. (in the case of credit cards, the ratio of amounts owed to credit limit -- in the case of installment loans, the ratio of amounts owed to the original amount of the loan. The principle is the same in both, though the ratios for revolving lines have a substantially bigger impact than the ratios for installment accounts.) If the actual size of the dollar amount owed ever matters, it is minor compared to the ratio issue, and also never matters in most situations. (For most of us, keeping our ratios down necessarily keeps our raw dollar amounts low.)
Well thanks for that, CreditGuyInDixie
Actually the parameters of this experiment may change. I had a sewer backup, and attendant cleanup costs.... and had to put that on a credit card too, and may not be able to zero that out so easily.
So maybe my utilization is going higher.
As of today, with my planned zero interest balances all in, I'm up to $3500 for 3.9% overall utilization.