topic Re: AZEO queston in Understanding FICO® Scoring

AZEO queston

Anonymous — Mon, 05 Mar 2018 18:10:18 GMT

So I am due to request a 61 day CLI w/ AMEX next week and wanted to try and maximize my score using the AZEO tactic (didn't know about it until recently.) I had planned to have QS at "$0" and ED report a balance of $200 or so (would make util roughly 5%) before statement cuts for AMEX on 3/9. Unfortunately, QS was linked (from forever ago) to craigslist job posting site so when my wife posted for a job at her business this past week, she was charged $7 and now QS is showing statement balnace of $7 b/c statement cuts on the second. My question is, should I just only let that "$7" report and pay the ED to "0$" or is the 7$ too insignificant to even show up as 1% util. Overall available credit across accounts is about just shy of 5,000. Thank you.

Re: AZEO queston

HeavenOhio — Mon, 05 Mar 2018 18:15:33 GMT

We don't know how many cards you have, but it's possible that you could be dinged for a second card reporting a positive balance. The ding — if it even happens — would be small. If it makes you feel better, you can cut a $0 balance on the AMEX card. Their thing is getting paid. They don't care when as long it's in full and on time.

Re: AZEO queston

Anonymous — Mon, 05 Mar 2018 18:50:46 GMT

$7 on the CapOne will be just fine.

Re: AZEO queston

Anonymous — Mon, 05 Mar 2018 19:14:44 GMT

I have 3 revolvers + 1 charge card. I'll just plan to have others to "0$" and see what happens with the QS reporting 7$. Thanks!

Re: AZEO queston

NRB525 — Tue, 06 Mar 2018 13:31:11 GMT

Spoiler alert: It will make Zero difference in your 3X CLI request.

AMEX uses whatever last SP they did, which is likely 60 days or so in the past. That is the main reason the shorthand 61 days is regurgitated as advice, because it gives AMEX a chance to take another SP after your application HP. They also do not use the HP, so if no SP was done recently, they might use a SP from before your app.

The other factor in your file is you have two AMEX, the charger and the revolver, correct? This means half of all your cards are AMEX and contribute to their internal scoring method. That should carry a lot of weight.

An AZEO method would only possibly have an influence on an AMEX 3X CLI request if it is your first ever AMEX, and you had already been diligent about maintaining AZEO every day for three months since you cannot predict the SP timing.

Or, you could just use the AMEX regularly and pay on time. That has a stronger influence on an AMEX CLI than any two point gain ( and low swipe value indication ) that comes from AZEO.

In case it is not clear, I think AZEO is a waste of time.

And I also oredict you won’t have any issues getting your first 3X CLI, since that is probably from $1k to $3k.

Re: AZEO queston

Anonymous — Tue, 06 Mar 2018 18:18:56 GMT

Nice response by NRB.

For any person who wants to implement AZEO, the card that shows the positive balance should be a plain Jane credit card. That is, it should be:

(1) A true credit card (not a charge card)

(2) A card in your name (not an AU card)

(3) A card with a balance of at least $5

(4) A card with a credit limit of < 29k

The more you deviate from that, the greater the risk that FICO will classify you as all revolving cards at $0, which involves a penalty.

I also note that you are concerned that your utilization needs to be a full 1% of your total credit limit. FICO rounds all such percents up. Thus, suppose Bob has four cards with a 10k limit each. One card has a $6 balance and the others are at $0. FICO will perceive Bob has having a 1% individual utilization (on the one card) and a 1% total utilization -- even though his precise util is < 0.1%.

Finally, as NRB observes, you need to be thinking about what credit outcome you are soliciting, and then choose the strategy that is best suited to it, rather than allowing the strategy (e.g. the almighty AZEO) to drive everything. You are trying to convince a CC company that your current credit limit is far too small for your needs. Having your cards regularly report mostly zeroes with one small balance may not be the best way to convince them that you need a bigger limit. Although it may help your FICO score, the CC company may have other internal metrics for deciding whether a person needs a bigger credit limit.

AZEO was first conceptualized as an easy strategy for people preparing to apply for an important loan, like a mortgage. It may have less value when applied to other things, such as CLIs.

Re: AZEO queston

SouthJamaica — Wed, 07 Mar 2018 02:44:38 GMT

@Anonymouswrote:
So I am due to request a 61 day CLI w/ AMEX next week and wanted to try and maximize my score using the AZEO tactic (didn't know about it until recently.) I had planned to have QS at "$0" and ED report a balance of $200 or so (would make util roughly 5%) before statement cuts for AMEX on 3/9. Unfortunately, QS was linked (from forever ago) to craigslist job posting site so when my wife posted for a job at her business this past week, she was charged $7 and now QS is showing statement balnace of $7 b/c statement cuts on the second. My question is, should I just only let that "$7" report and pay the ED to "0$" or is the 7$ too insignificant to even show up as 1% util. Overall available credit across accounts is about just shy of 5,000. Thank you.

$7 counts. It will show up as a balance.

Re: AZEO queston

Anonymous — Wed, 07 Mar 2018 03:03:31 GMT

Capital One will report a $1 or greater balance. Anything $0.99 or less will be reported as $0.

Re: AZEO queston

OmarR — Wed, 07 Mar 2018 20:31:56 GMT

@Anonymouswrote:

For any person who wants to implement AZEO, the card that shows the positive balance should be a plain Jane credit card. That is, it should be:

(1) A true credit card (not a charge card)
(2) A card in your name (not an AU card)
(3) A card with a balance of at least $5
(4) A card with a credit limit of < 29k

Why #4??

Re: AZEO queston

Anonymous — Wed, 07 Mar 2018 21:06:55 GMT

@OmarRWhy #4??

Under some scoring models, account with credit limits of $30k+ are ignored from calculating revolving utilization, so if you used one of those cards as your AZEO, it could be ignored and you'd have a scoring penalty for "no revolving credit use."

Re: AZEO queston

Thomas_Thumb — Wed, 07 Mar 2018 21:22:18 GMT

@NRB525wrote:

AMEX uses whatever last SP they did, which is likely 60 days or so in the past. That is the main reason the shorthand 61 days is regurgitated as advice, because it gives AMEX a chance to take another SP after your application HP. They also do not use the HP, so if no SP was done recently, they might use a SP from before your app.

The other factor in your file is you have two AMEX, the charger and the revolver, correct? This means half of all your cards are AMEX and contribute to their internal scoring method. That should carry a lot of weight.

An AZEO method would only possibly have an influence on an AMEX 3X CLI request if it is your first ever AMEX, and you had already been diligent about maintaining AZEO every day for three months since you cannot predict the SP timing. Or, you could just use the AMEX regularly and pay on time. That has a stronger influence on an AMEX CLI than any two point gain ( and low swipe value indication ) that comes from AZEO.

In case it is not clear, I think AZEO is a waste of time.

In general, I think AZEO is over sold as a strategy for good credit management. If a person uses cards as the situation dictates and then PIFs statement balances it's at least as good as AZEO in building positive credit history.

Sure, allowing a majority of cards to report "small" balances vs one card only may cost 10 points. However, unless you need those points to reach a score threshold, it's not worth the aggrevation.

Side note: AZEO is not all that critical for the older Fico mortgage scores either. However... EQ Fico 04 (score 5) does punsih the mortgage score if more than 50% of cards report balances (assuminjg you have at least 3 cards).

Re: AZEO queston

Anonymous — Wed, 07 Mar 2018 23:18:55 GMT

@Thomas_Thumbwrote:

If a person uses cards as the situation dictates and then PIFs statement balances it's at least as good as AZEO in building positive credit history.

I have myself tried to stay on message when the subject of AZEO comes up, which is to remind people that AZEO does not help a person build positive credit history at all (i.e. gradually improve over an extended period of time). It's primary value (such as it is) is in the 40 days before an important credit app, like a car or mortgage. All the points you get from AZEO can be gotten very quickly, after which a person can resume the simpler approach of allowing cards to report balances naturally as they are used.

Re: AZEO queston

OmarR — Thu, 08 Mar 2018 00:34:03 GMT

@Anonymouswrote:
@OmarRWhy #4??
Under some scoring models, account with credit limits of $30k+ are ignored from calculating revolving utilization, so if you used one of those cards as your AZEO, it could be ignored and you'd have a scoring penalty for "no revolving credit use."

Wow.

So what if someone has multiple cards ALL with $30K+?

Is AZEO futile for them(in those scoring models)?

Re: AZEO queston

Anonymous — Thu, 08 Mar 2018 01:02:14 GMT

If someone only had cards with limits so great that they were excluded by whatever algorithm doesn't count them, they would always be seen as having zero revolving debt and take the score ding of ~15-20 points that goes along with it, regardless of if 1 of them had a reported balance or all of them had a reported balance. If this person were to CLD one of their cards to $25k and allow a small balance to report on it, they'd be successfully implementing AZEO and would pick up those ~15-20 points.

Re: AZEO queston

Anonymous — Thu, 08 Mar 2018 01:13:58 GMT

BBS is right. And remember too that different models have different thresholds for when FICO removes a card from its Amounts Owed consideration.

Testing in the last year established that for FICO 8 the threshold is somewhere in the 51-69k range. (Specifically 50k was tested and it was safe, and someone else tested 70k and it was excluded.)

Other folks established that for one of the much earlier models the threshold was 35k or 30k.

Because almost everyone has at least one card with a limit of 29k or less, it makes sense as a practical strategy to advise people to choose a card with a limit under that. Then you don't have to worry which model the lender is using.

Re: AZEO queston

Thomas_Thumb — Sun, 11 Mar 2018 01:37:01 GMT

@Anonymouswrote:
BBS is right. And remember too that different models have different thresholds for when FICO removes a card from its Amounts Owed consideration.

Testing in the last year established that for FICO 8 the threshold is somewhere in the 51-69k range. (Specifically 50k was tested and it was safe, and someone else tested 70k and it was excluded.)

Other folks established that for one of the much earlier models the threshold was 35k or 30k.

Because almost everyone has at least one card with a limit of 29k or less, it makes sense as a practical strategy to advise people to choose a card with a limit under that. Then you don't have to worry which model the lender is using.

I have an AU card with a CL of $34.9K and it counts toward my aggregate CL on the older Fico 04 and Fico 98 models. The threshold might be $35k but it's not $30k based on my data.

Re: AZEO queston

Anonymous — Sun, 11 Mar 2018 03:31:13 GMT

Interesting that your limit is $34.9k on that trade line. Did you intentionally keep it below $35k for the reason being discussed here, or was that just a coincidence?

Re: AZEO queston

Thomas_Thumb — Sun, 11 Mar 2018 17:03:54 GMT

BBS,

That was the SL for the card when DW opened it back in the 90s. I thought we opened it as a joint card. However, when I misplaced my card and never replaced it I think my status was changed to AU (now over 10 years of non use for me).

DW has never asked for a CLI so it has stayed at $34.9k.

After joining the MyFico forums I saw posts suggesting $35k as a threshold for including cards in the older Fico mortgage models. Since then I decided to maintain CLs on my cards to under $35k as I have no need for higher CLs on my revolvers.

[Note - My Discover card has a $31k CL and it too counts on Fico 98 and Fico 04]

Re: AZEO queston

expatCanuck — Sun, 11 Mar 2018 17:55:14 GMT

@NRB525wrote:
Spoiler alert: It will make Zero difference in your 3X CLI request.

AMEX uses whatever last SP they did, which is likely 60 days or so in the past. That is the main reason the shorthand 61 days is regurgitated as advice, because it gives AMEX a chance to take another SP after your application HP. They also do not use the HP, so if no SP was done recently, they might use a SP from before your app.

The other factor in your file is you have two AMEX, the charger and the revolver, correct? This means half of all your cards are AMEX and contribute to their internal scoring method. That should carry a lot of weight.

An AZEO method would only possibly have an influence on an AMEX 3X CLI request if it is your first ever AMEX, and you had already been diligent about maintaining AZEO every day for three months since you cannot predict the SP timing.

Or, you could just use the AMEX regularly and pay on time. That has a stronger influence on an AMEX CLI than any two point gain ( and low swipe value indication ) that comes from AZEO.

In case it is not clear, I think AZEO is a waste of time.

And I also oredict you won’t have any issues getting your first 3X CLI, since that is probably from $1k to $3k.

^^^^^ This.

Here are some sample data points. For my first AX CLI this past week (after ~65 days), I went from 10K to 22K (all I requested) with a 717 EX score, 15 points lower than my score when Amex issued me the card. Usage of the card had been modest (a ~$700 peak in the first two months, paid in full by the time the statement cut).