topic Re: $7.77 in Understanding FICO® Scoring

$7.77

icloud2525 — Mon, 14 Dec 2015 19:19:20 GMT

So let I generally let 1-2 cards report around 5-6% utility. Total CL $118,200. I was away for a few days and a 3rd card reported $7.77 (ebay purchase). Took a 6 point hit. Nothing to apply for this month so no big deal, but find it funny that $7 bucks on over 115k CL can drop it that much.

Re: $7.77

gdale6 — Tue, 15 Dec 2015 01:25:16 GMT

Its the number of cards part not the util of the credit line that is most likely causing the drop.

Re: $7.77

Anonymous — Tue, 15 Dec 2015 02:21:21 GMT

Gdale is right. But there is something interesting here, and that is that you have a very large number of total open cards. A number of us have guessed that if the total percentage of your open cards (that are showing a balance is low) is low, then they will be treated as if they were just one card for FICO impact

The "breakpoint" percentage I have heard conjectured is 25%. You look at the total number of cards reporting a balance, and then divide that by the total number of open cards. If that % is less than 25%, then it's the same thing as having 1.

Example:

Somebody has 13 open cards. 3 are reporting a balance. 3/13 = 23%. Which is < 25%. Thus those first three cards are the same as somebody with 5 open cards and exactly 1 showing a balance.

Of course, the exact threshold (25%) is conjecture as is the general idea itself. But it has some weight given that people with large numbers of cards often have no impact when 1, 2, or 3 or even four cards report a balance, whereas people with 5 or fewer cards get an immediate impact going from 1 to 2.

Question for the OP:

How many open credit cards do you have? It looks like it is at least 16. 3/16 < 20% so I am mildly surprised that 3 caused you to take even a small hit.

Re: $7.77

EW800 — Tue, 15 Dec 2015 03:13:09 GMT

Gdale is absolutely correct, but it sure is funny (for lack of a better word) under such circumstances. A few months ago, I allowed $3 to report on a second account and took a temporary hit of a few points. I had to chuckle thinking about the FICO God's thinking that I am a bit higher risk because of the $3 more in debt.