topic Re: CLI vs New in Understanding FICO® Scoring

CLI vs New

Anonymous — Thu, 26 Oct 2017 00:22:02 GMT

Dear Abbey, (HA!)

I only have one open card, USAA with a $0 balance and a $2k limit

I just paid off a BofA card with a $1000 limit that is now closed (by them)

I am paying off a Navy Federal Credit Card $5400 out of $10,000. (also closed by them)

I got on my parents Master Card as an Authorized user and they have $2700 out of a $28k limit mever having mised a payment since 1996.

So, my revolving utilization is $8,100 / $28,000 which is 29%

When I paid the Navy federal down to 5400 from 9201 my FICO 8 score jumped 40 points.

I want to increase my Mortgage scores (FICO 5, 4, 2) which are at 548, 611, 575

Here is my question...

To increase my Mortgage scores primarily, would I be best advised to pay down the $5401 N Fed or get a new credit card with a $5k limit (FICO 8 at 625)or apply for a CLI on USAA

I do have 2 collections. (2 and 4 years old) Both paid off and closed and totalling only $997 (peanuts, but killing my score)

If there are other options please advise.

Thank you,

Brew

Re: CLI vs New

Anonymous — Thu, 26 Oct 2017 01:38:19 GMT

Paying off your existing debt is always the way to go and in this case it will help your scores quite a bit as well, as doing so should allow you to cross the 9% aggregate utilization mark... depending of course how consistent that AU account is.

Re: CLI vs New

Anonymous — Thu, 26 Oct 2017 08:10:35 GMT

The AU is very consistent. Thank you

can you explain the 9%? I heard 30% was the magic number?

what is significant about 9?

Re: CLI vs New

Anonymous — Thu, 26 Oct 2017 12:45:12 GMT

Thresholds are believed to exist at 9%, 29%, 49%, 69% and 89%. Crossing the 9% threshold yields the greatest point gain from paying down utilization. The next best threshold, being between 9%-29% is said to be "good" but certainly not ideal. Being in this range isn't a bad thing, so that's probably why you've heard that it's good to be there, but you won't be maximizing your FICO scores in this range. That comes with being below 9%.

Re: CLI vs New

Kree — Thu, 26 Oct 2017 13:06:28 GMT

There are multiple thresholds. 9% 30% 80% and some say another one around 50-60%

Going below each one gives points. 30% is the youre doing good threshold. 9% is the youre doing great threshold.

EDIT: Go with BBS's numbers, they are probably much more accurate.

Re: CLI vs New

DollyLama — Thu, 26 Oct 2017 13:39:07 GMT

Do as BBS suggested, or even PIF the Navy Fed if feasible, as since they have closed the account. Overall utilization is first in thresholds, then individual. So Navy is at 100% whether you have 5K or 5 dollars.

I noticed in your siggy

3-30days, 3-60 days, 50% paid as agreed.
1 month since most recent last late payment.

Is the 1 month since most recent the Navy reporting, as the collections should no longer being reported monthly late since they are paid off.

How soon are you wanting to buy a house? If within the next 6mos to a year, don't be apping any new CL.

Once the Navy is PIF, only use your USAA for letting a balance under 8.9% hit at statement cuts.

Try in rebuilding forums to GW to death the late payments for removal, same for the paid collections. If the lates are very recent, if might be a bit harder than ones that are a few years old.

Re: CLI vs New

Anonymous — Thu, 26 Oct 2017 13:59:23 GMT

BBS, KREE, Thank You! That helps to understand

Dolly,

My navy fed was being reported 5409 out of 10,000. Im not sure what to make of that since you said fit should be at 100%.

the recent late was on Navy Fed

I am buying soon as I am having one built. already preapproved through VA

Re: CLI vs New

Kree — Thu, 26 Oct 2017 14:15:42 GMT

I believe that a closed account counts as 100% utilization, because your credit limit is now 0. Again, others better answers.

Re: CLI vs New

Anonymous — Thu, 26 Oct 2017 14:19:46 GMT

Agreed, but it's not. lol 54%. Ill wait until the Nov 1 pull and see

Re: CLI vs New

SouthJamaica — Thu, 26 Oct 2017 14:39:59 GMT

@Anonymous wrote:
Dear Abbey, (HA!)

I only have one open card, USAA with a $0 balance and a $2k limit
I just paid off a BofA card with a $1000 limit that is now closed (by them)
I am paying off a Navy Federal Credit Card $5400 out of $10,000. (also closed by them)
I got on my parents Master Card as an Authorized user and they have $2700 out of a $28k limit mever having mised a payment since 1996.

So, my revolving utilization is $8,100 / $28,000 which is 29%

When I paid the Navy federal down to 5400 from 9201 my FICO 8 score jumped 40 points.

I want to increase my Mortgage scores (FICO 5, 4, 2) which are at 548, 611, 575

Here is my question...
To increase my Mortgage scores primarily, would I be best advised to pay down the $5401 N Fed or get a new credit card with a $5k limit (FICO 8 at 625)or apply for a CLI on USAA

I do have 2 collections. (2 and 4 years old) Both paid off and closed and totalling only $997 (peanuts, but killing my score)

If there are other options please advise.

Thank you,

Brew

Getting new accounts will hurt your mortgage scores, so forget that.

Re: CLI vs New

Anonymous — Thu, 26 Oct 2017 14:57:39 GMT

@Anonymous wrote:
Agreed, but it's not. lol 54%. Ill wait until the Nov 1 pull and see

In your original post you said that this account was "closed by them." If an account is closed, it has no credit limit, so if there's a positive balance the account is viewed as at 100% utilization until it is paid off.

Re: CLI vs New

Anonymous — Thu, 26 Oct 2017 15:00:53 GMT

I totally understand that. But, it is not reporting that way. I dont know, Im new at this

Re: CLI vs New

Anonymous — Thu, 26 Oct 2017 15:07:25 GMT

What do you mean it's not reporting that way? Do you mean it was recently closed by them, but the account hasn't yet reported as closed? If that is indeed the case and the account is still being shown as open on your CR, you can expect a score drop once it reports as closed, as that TL will be going from 54% utilization to 100% utilization.

The best thing you can do is pay that debt down/off ASAP.

Re: CLI vs New

Anonymous — Thu, 26 Oct 2017 15:08:47 GMT

Also...

I have 2 collections (2013 and 2015) only $562 and $435. These accounts are closed and paid off but on my CR as collections. Everytime I search for removing them I end up at "Pay for Delete" which is writing a letter to the collection agency. They tell me that I have to call the bureaus becasue they dont own it any more becasue it is closed. Is this true? is there a way to convince the 3 CBs to remove it?

Thanks,

Brew

...Yes, I brew my own beer. Mostly Lagers and Stouts. Cheers!

Re: CLI vs New

Anonymous — Thu, 26 Oct 2017 15:16:52 GMT

This is what Navy Federal Says on Experian...

Recent Balance $6851

Credit LImit or Origonal Amount $10,000

Monthly Payment $138

Date Opened 02/2012

First Reported03/2012

Date of Status 11/2016

Comment: Account Closed at credit grantor's request

Revolving Utilization 71%

Total Balance on Revolving Credit $9201 (combination of 3 accounts - $9201 out of $13,000) (10k, 1k, 2k)

These arent my numbers or my Math

The status of being closed is a year old.

Re: CLI vs New

DollyLama — Thu, 26 Oct 2017 16:21:25 GMT

It is closed and 100% utilization, what once was a 10k credit limit, is now a zero credit limit, with a balance. Can't charge on it, no available credit. The 71% utilization was probably the status in November 2016 at the time was closed by the creditor. As the balance on your report is $6800 and you state you owe $5400 currently. They have not updated since last year, is what I'm seeing. Difference of $1400 and each month declining, yet not reporting as such.

Re: CLI vs New

Thomas_Thumb — Thu, 26 Oct 2017 16:37:06 GMT

^ Correct - a closed card with a balance is viewed as a max out of available credit as far as Fico is concerned. Typically credit limit on a closed account is equal to balance so utilization would, for scoring purposes be 100% on that card.

Third party presentation summary reports may use their own calculations for reporting an aggregate utilization summary. However, that does not mean Fico uses the 3rd party calculation in their algorithm.Unfortunately, some summary reports don't follow Fico (or VantageScore) protocol and this can be a bit misleading.

P.S. With respect to aggregate utilization Fico looks at total balance divided by total of credit limits. My question is: for a closed account is the balance considered the credit limit? If so, I believe the Brewmeister's aggregate utilization would come to 93% [$9201/$9851]

Re: CLI vs New

DollyLama — Thu, 26 Oct 2017 16:39:53 GMT

And if you are wondering where the 40 point jump came from, it most likely you being added as an AU on a higher CL CC with great payment history and lower utilization.