Re: How # of cards with balance can effect FICO score
03-23-2012 11:46 AM
Nicely done experiment and well written report! It supports what I've often seen stated on this forum, and also experienced myself in the past in a similar experiment: EQ in particular hates (or at least used to hate) all-zero balances. In my little experiment, done about two years ago, I alternated several times between total balances of $0 and $10 (on one card, didn't matter which), and got my EQ and TU FICO scores after each change. It was quite reliable: with the $10 balance total, I had 813 FICO scores on both EQ and TU; with zero balance, TU went up to 819, EQ down to 809. That was exactly what I had seen predicted here.
But recently, it seems to have changed. I prefer not to bother with the small residual balance unless I have some reason to maximize my score, so I've been at all zero for a number of months. I got an offer from FICO for reduced-rate scores, and I realized I hadn't actually pulled mine for some time, so I took the offer even though I hadn't had time to get the $10 residual in place. (Yeah, sucker for a bargain.) And I found just the opposite behavior as previously: EQ was higher (807) than TU (799). The lower scores than previously didn't surprise me;, since I recently took on a larger mortgage since the 813 etc. reported above. But I was surprised that TU seemed more sensitive to the zero balances than EQ. And the infamous "factors" text confirmed this: For TU, "Your FICO score was hurt because you are not currently demonstrating active revolving credit management.", while EQ thought I was good on that (and the other) criteria. So I'm wondering whether anyone else has noticed this sort of change.
By the way, these scores, just above and below 800, give an interesting view of how nonsensical the "Your risk to the lender" report can be. Supposedly, TU thinks I'm twice as likely to default (2%) than EQ does (1%). I know, it's all statistical, and there have to be boundaries, but such a proportionally enormous difference can't be realistic in an individual case.
Wait, is the SIZE of my mortgage factored into my FICO??!!! I live where houses cost more. That does not seem fair.
Am I being penalized for doing a Re-fi? I refi'd with no cash out, so my mortage started over with 100% due, nothing paid off. Are you penalized for % paid/not paid too? I am not even underwater... again not fair.
It will be years until a new mortgage gets a good ratio.
Please tell me I am misunderstanding this tidbit of information.
Starting Score: 693 TU FICO, 679 EQ FICO
Current Score: 748 TU(12/12), 783 TU98 , 813 TU08 FICO, 744 EQ FICO , 735 EX(9/12), 794 EX08 FICO, 809 EX08 bankcard FICO
Goal Score: 750+, but shooting for the 800's
Hyatt Visa Sig ($23K), Amex BCP (20.7K), BofA Travel Rewards ($17.5), B&N World MC ($17.3K), Amex RP Gold (NPSL w/ S&T), Cash+ Sig (15K), FNBO Visa (13.1K), Hilton Surpass (10K), Freedom Visa Sig ($8.6K), Disc It ($8K), Citi Dia Pref MC ($3.7K),Sam's D ($8.5K), Wally D ($7.5K), JCP($5.3K)