Re: How does CR's read utilizatio
06-18-2011 08:20 AM
I guess I was wrong in assuming the FICO score I purchased here was going to see a credit balance and utilization increase
no matter how slight---1.6% -2.2% and not make a score penalty, even though it was miniscule when compared to the credit line. There are so many factors involved in your FICO credit score that it's impossible (really) to earmark one factor and determine that it alone caused any FICO score change. FICO is an extremely complex algorithm. Having a balance change and a FICO score change on the same day does not equate to the balance change creating the FICO score change.
I mean, raising your utilization from 1.6% to 2.2% seems insignificant to me, but apparently FICO doesn't like for your credit usage to
rise at all. It's not a matter of FICO liking or not liking credit usage to change. FICO doesn't track the change in your utilization. It's a snapshot of your current utilization that FICO is looking at - and that snapshot includes a myriad of other factors. Hence you get a penalty even though you are using credit responsibly. On top of that, FICO penalizes you if you report a 0% usage. FICO is not a grading system with penalties for bad behavior. It's simply a risk assessment. Anytime a FICO score is generated it is assessing your risk based on boatloads of statistical data.
So with all the talk on these boards about letting a small balance report and paying in full, which I do, how come no one mentioned that you
should report a lesser utilization rate each time or you will (may) see a point drop. Because that's not true. On a regular basis, DH and I report miniscule-ishly larger utilizations and do not see a score change. FICO is looking at lots of info, but they are not tracking your change in utilization. ScoreWatch or other such programs can report a change in balance (dollars and/or utilization - which is why some may receive two alerts for one account having a balance change) and it will also tell you your FICO score at that point; but it does not mean the change in utilization creates the change in the FICO score.
That's how it happens on my CR , but maybe my view is less than the complete picture.
I think lots of folks have been confused by getting a scorewatch triggered by one of the factors that you can individually choose; and then feeling that the factor that triggered the ScoreWatch is the factor that triggered the FICO score change. You choose what triggers a ScoreWatch; and that ScoreWatch is a separate issue than the factors that trigger a FICO score change.
And remember that things are constantly changing on your accounts, time since new account reported, age of accounts, age of inquiries, and tons of other stuff. And sometimes an account reports something in a different way than it did before. There's lots of constantly moving targets on anyone's CR's.