topic Re: Decreasing your utilization yields NO increase in scores? in Understanding FICO® Scoring

Decreasing your utilization yields NO increase in scores?

Anonymous — Thu, 11 Feb 2016 22:25:54 GMT

So I paid down all my CCs except one. Finally myFICO updates one of the 5 cards. 93% decrease so it now has a 7% utilization and no score increase? I'm really starting to see this who credit card thing as a huge joke of a game that no one can really get a grasp on. If CC utilization is 35% of your score, then there is no way you get ZERO increase with a 93% pay down. Makes absolutely no sense. And this is from Equifax. The other two haven't updated anything.

Re: Decreasing your utilization yields NO increase in scores?

BallBounces — Thu, 11 Feb 2016 22:29:38 GMT

Incomplete data.

Re: Decreasing your utilization yields NO increase in scores?

DoroLucky — Thu, 11 Feb 2016 22:31:47 GMT

@Anonymous wrote:
So I paid down all my CCs except one. Finally myFICO updates one of the 5 cards. 93% decrease so it now has a 7% utilization and no score increase? I'm really starting to see this who credit card thing as a huge joke of a game that no one can really get a grasp on. If CC utilization is 35% of your score, then there is no way you get ZERO increase with a 93% pay down. Makes absolutely no sense. And this is from Equifax. The other two haven't updated anything.

Majority of the time, I ALWAYS see a score jump with my util. decreases....especially with Equifax.

Re: Decreasing your utilization yields NO increase in scores?

Anonymous — Thu, 11 Feb 2016 22:59:51 GMT

Wait until the other cards update the lower util as well. You should see a score increase then. How high is the util on the other 4 cards? That may have something to do with why you didn't see a score change from the decrease in util on the one card.

Re: Decreasing your utilization yields NO increase in scores?

Anonymous — Thu, 11 Feb 2016 23:07:56 GMT

Based off what I have learned about this you will need to give them an additional 30-60 days to see any increase in your score. The reason is because they want to make sure you did not borrow money from somewhere to pay down your credit cards or open an installment loan with someone to pay off your credit cards. . I believe several members have talked about this in the past.

Re: Decreasing your utilization yields NO increase in scores?

CH-7-Mission-Accomplished — Fri, 12 Feb 2016 00:41:20 GMT

@JmmyBrdn wrote:
Based off what I have learned about this you will need to give them an additional 30-60 days to see any increase in your score. The reason is because they want to make sure you did not borrow money from somewhere to pay down your credit cards or open an installment loan with someone to pay off your credit cards. . I believe several members have talked about this in the past.

I'm sorry, but this is just not correct.

Utilization changes are immediately factored into FICO scores.

Re: Decreasing your utilization yields NO increase in scores?

thom02099 — Fri, 12 Feb 2016 01:02:13 GMT

@CH-7-Mission-Accomplished wrote:
@JmmyBrdn wrote:
Based off what I have learned about this you will need to give them an additional 30-60 days to see any increase in your score. The reason is because they want to make sure you did not borrow money from somewhere to pay down your credit cards or open an installment loan with someone to pay off your credit cards. . I believe several members have talked about this in the past.
I'm sorry, but this is just not correct.

Utilization changes are immediately factored into FICO scores.

+1. Untrue.

A credit report is a snapshot in time. It is of the moment of the report. Just as there is no memory factor, there is no anticipatory factor. The utilisation changes are immediately factored in, as CH-7-Rebuilding noted.

Just as scores can go up with a decrease in utilisation, they can also go down with an increase in utilisation. But there's no anticipation of this occurring.

Re: Decreasing your utilization yields NO increase in scores?

Anonymous — Fri, 12 Feb 2016 02:23:13 GMT

1. I ALWAYS PAY BEFORE the Statement Date. As Balance ON Statement Date is what is reported to CRs.
So you would indeed need to wait an Additional 30 days if not PAID per above.
Or file a Dispute through the 3 CRs. (Takes Time, but WORKS to FORCE Updates).

2. I use FAKO (Credit Karma) as a Weekly or Bi-Weekly TOOL to help me stay on top of Reporting. Just depends on where my Gardening Efforts are FOCUSED.

Re: Decreasing your utilization yields NO increase in scores?

Anonymous — Fri, 12 Feb 2016 06:31:13 GMT

I see a difference in responses given here. TO be more accurate, I keep up with my credit report dates. I have 5 cards, all but 1 are paid down less than 10%, two are paid to around 3%. All paid this month prior to report dates. So when the first card reported a 93% decrease, I didn't see an increase in score on this site. I'm a bit annoyed by it since I'm trying to monitor this for a future mortgage application soon. CK updated finally with an 11% increase from it but only on Equifax. Transunion hasn't done anything. Now I got an email alert showing the decrease, yet the scores didn't budge. In the next week or so I'll have two more reporting around the same huge percentage in decrease utilization.

Re: Decreasing your utilization yields NO increase in scores?

lg8302ch — Fri, 12 Feb 2016 06:53:44 GMT

There are different factors for Fico scoring. When your utilization comes down then Fico does increase unless you have similar low utilization % and something counts stronger. I have the example where I pay down balances on more than 1 account and overall utilization gets lower but my score even drops. The reason for the drop is that 1 or more accounts report balances. Let's say I have 14 accounts and 7 accounts with balances. I pay down multiple accounts and have lower overall utilization but get a score drop because there is a new account reporting 1$ charge. That means over 50% of my accounts report a balance and this fact gets scored stronger on my profile. I have done all sorts of testing with my profile as I love to challenge MyFico and get some knowledge out of my Score Watch subscription. There were some interesting results. My ultimate surprise in 2013 with former model was with 8 accounts I had at that time. I managed to get a 45 points difference with same utilization % and same amount but in different ways. My test was 8 accounts report 1$ balance and the next cycle there were 7 accounts 0 balance and 1 account 8$. You agree it is the same utilization and same amount but the result was 45 points difference at that time. My strongest enemy today is still the number of accounts reporting a balance once it goes over 50% of my accounts I have a drop of 20-30 points with same utilization. Each profile acts differently but if you have score monitor option it is quite nice to test a bit. Just do not test with all accounts maxed out. I was really nervous when I did this with 2 accounts as the last thing I wanted to spook a lender.

Re: Decreasing your utilization yields NO increase in scores?

SouthJamaica — Fri, 12 Feb 2016 15:25:20 GMT

@lg8302ch wrote:
There are different factors for Fico scoring. When your utilization comes down then Fico does increase unless you have similar low utilization % and something counts stronger. I have the example where I pay down balances on more than 1 account and overall utilization gets lower but my score even drops. The reason for the drop is that 1 or more accounts report balances. Let's say I have 14 accounts and 7 accounts with balances. I pay down multiple accounts and have lower overall utilization but get a score drop because there is a new account reporting 1$ charge. That means over 50% of my accounts report a balance and this fact gets scored stronger on my profile. I have done all sorts of testing with my profile as I love to challenge MyFico and get some knowledge out of my Score Watch subscription. There were some interesting results. My ultimate surprise in 2013 with former model was with 8 accounts I had at that time. I managed to get a 45 points difference with same utilization % and same amount but in different ways. My test was 8 accounts report 1$ balance and the next cycle there were 7 accounts 0 balance and 1 account 8$. You agree it is the same utilization and same amount but the result was 45 points difference at that time. My strongest enemy today is still the number of accounts reporting a balance once it goes over 50% of my accounts I have a drop of 20-30 points with same utilization. Each profile acts differently but if you have score monitor option it is quite nice to test a bit. Just do not test with all accounts maxed out. I was really nervous when I did this with 2 accounts as the last thing I wanted to spook a lender.

Awesome data; thank you.

Re: Decreasing your utilization yields NO increase in scores?

Anonymous — Fri, 12 Feb 2016 15:59:38 GMT

I paid for the $29 package but it's not monitoring for some reason. Doesn't that come with it?

Re: Decreasing your utilization yields NO increase in scores?

Anonymous — Fri, 12 Feb 2016 20:59:50 GMT

Okay so I did the little $1 trial at Transunion, and the score is 50 points lower than here at myFICO, which is 1 point off of what CK is showing as well, which are always lower than myFICO and I think CK also uses that Vantage Score model. Why is Transunion using that if they are supposed to be what myFICO is showing?

Re: Decreasing your utilization yields NO increase in scores?

bdhu2001 — Fri, 12 Feb 2016 21:17:12 GMT

@Anonymous wrote:
I paid for the $29 package but it's not monitoring for some reason. Doesn't that come with it?

It depends on how you set your alerts. Mine is set to notify me when there is a $5 change in balance. It's also possible to set it based on FICO score change.

Re: Decreasing your utilization yields NO increase in scores?

buffy615 — Sat, 13 Feb 2016 00:33:22 GMT

I have the opposite experience and would LOVE to know why. I used to pay all cards in full every month. But having a zero utilization didn't raise my score. So I followed some of the suggestions on this site and kept a little bit on a card or two so that my utilization would be around 1%. That significantly raised my score! Today, my score dropped 9 points (!!!) from a 776 to a 767 because I paid my Discover bill (the one that had a balance) and my utilization went back to Zero. **bleep**?!?

Re: Decreasing your utilization yields NO increase in scores?

Bankrupt2019 — Sat, 13 Feb 2016 19:34:00 GMT

@CH-7-Mission-Accomplished wrote:
@JmmyBrdn wrote:
Based off what I have learned about this you will need to give them an additional 30-60 days to see any increase in your score. The reason is because they want to make sure you did not borrow money from somewhere to pay down your credit cards or open an installment loan with someone to pay off your credit cards. . I believe several members have talked about this in the past.
I'm sorry, but this is just not correct.

Utilization changes are immediately factored into FICO scores.

Re: Decreasing your utilization yields NO increase in scores?

bdhu2001 — Sat, 13 Feb 2016 19:49:21 GMT

@buffy615 wrote:
I have the opposite experience and would LOVE to know why. I used to pay all cards in full every month. But having a zero utilization didn't raise my score. So I followed some of the suggestions on this site and kept a little bit on a card or two so that my utilization would be around 1%. That significantly raised my score! Today, my score dropped 9 points (!!!) from a 776 to a 767 because I paid my Discover bill (the one that had a balance) and my utilization went back to Zero. **bleep**?!?

You've already researched and know that you should have a balance report on at least one card. Your FICO score is based on use of credit, not just availability of credit. Once you had zero utilization, FICO doesn't figure in how responsible you'll be with credit. Since FICO utilization has no memory, it doesn't calculate that you'll probably use credit again and be responsible with the bill.

Re: Decreasing your utilization yields NO increase in scores?

buffy615 — Sat, 13 Feb 2016 22:27:12 GMT

bdhu2001: thank you for this very-easy-to-understand explanation. I guess I had paid the bill just too soon, so I ended up with the zero utilization. So, FICO doesn't know or care how much I put on a card each month. It only cares how much is on a card at the end of a billing period? So I could charge $1,000 today, but if I pay it off before the end of the billing period, it will register as a zero with FICO?

Re: Decreasing your utilization yields NO increase in scores?

SouthJamaica — Sat, 13 Feb 2016 22:33:05 GMT

@buffy615 wrote:
bdhu2001: thank you for this very-easy-to-understand explanation. I guess I had paid the bill just too soon, so I ended up with the zero utilization. So, FICO doesn't know or care how much I put on a card each month. It only cares how much is on a card at the end of a billing period? So I could charge $1,000 today, but if I pay it off before the end of the billing period, it will register as a zero with FICO?

Correct.

Re: Decreasing your utilization yields NO increase in scores?

NRB525 — Tue, 16 Feb 2016 02:08:16 GMT

@Anonymous wrote:
Okay so I did the little $1 trial at Transunion, and the score is 50 points lower than here at myFICO, which is 1 point off of what CK is showing as well, which are always lower than myFICO and I think CK also uses that Vantage Score model. Why is Transunion using that if they are supposed to be what myFICO is showing?

If you are checking scores directly from TU, EQ, CK, and not myFICO, then you are talking a language that is different than what most people are used to here. The common "FICO Score" here is only from myFICO, or Discover (TU), or Slate (EX), or a few other cards.

What are your myFICO scores, from the report you paid $29 for? That should include monitoring.

Which cards do you have, what is the CL on each, and what reported, on the last statement that you have, on each of the cards?

One other factor to clarify, and you may have already included this in your comments, but it's critical. You may pay a credit card on a certain day, but usually you have to wait a few days after the statement prints, before you see any alert on myFICO.