topic Re: Credit utilization in Understanding FICO® Scoring

Credit utilization

Anonymous — Sat, 02 Jun 2018 01:42:02 GMT

Hello I need 16 points in order to be approved for my mortgage loan . My current utilization is at 5% does anyone know if I drop this to 1% if it will give me the boost I need ?

Re: Credit utilization

Appleman — Sat, 02 Jun 2018 01:58:57 GMT

Is your utilization across multiple cards or with one card?

The AZEO (All Zero Except One) method is said to give the max score related to credit cards. Some have seen improvements with 1% reporting some it just needs to be less than 9% (but on only one card).

I would be doubtful that that alone would grab you 16 points.

Re: Credit utilization

Anonymous — Sat, 02 Jun 2018 02:00:37 GMT

@Anonymous wrote:
Hello I need 16 points in order to be approved for my mortgage loan . My current utilization is at 5% does anyone know if I drop this to 1% if it will give me the boost I need ?

I am sure it will give a boost but we can't quantify it. also, try AZEO method if you have two or more credit cards for a temporary fix.

Re: Credit utilization

Anonymous — Sat, 02 Jun 2018 02:02:02 GMT

@Appleman wrote:
Is your utilization across multiple cards or with one card?
The AZEO (All Zero Except One) method is said to give the max score related to credit cards. Some have seen improvements with 1% reporting some it just needs to be less than 9% (but on only one card).

I would be doubtful that that alone would grab you 16 points.

it's funny how we replied in a minutes difference same thing. I like that help on this forum is proactive and quick

Re: Credit utilization

Anonymous — Sat, 02 Jun 2018 02:07:41 GMT

I have three credit cards with one of them being an authorized user account
(AU) BOA 5% utilization 18,000 credit limit
Credit one 2% 5.00 300 credit limit
Capital one 1 % 4.00 400 credit limit

Re: Credit utilization

Anonymous — Sat, 02 Jun 2018 02:10:51 GMT

And the last time I had a credit card report 0% it dropped my score 10 points 😞

Re: Credit utilization

Anonymous — Sat, 02 Jun 2018 02:17:48 GMT

@Anonymous wrote:
And the last time I had a credit card report 0% it dropped my score 10 points 😞

having 0% is bad according to Fico model so let one statement generate something 1<9% while other cards having zero (this method is AZEO) and see the magic.

Re: Credit utilization

Anonymous — Sat, 02 Jun 2018 02:20:35 GMT

PS fluctuation in 10 points is considered normal with scores however people in between categories are the ones most affected :/ but its not for long patience, discipline and time is all we need. I wish you luck.

Re: Credit utilization

SouthJamaica — Sat, 02 Jun 2018 03:29:14 GMT

@Anonymous wrote:
Hello I need 16 points in order to be approved for my mortgage loan . My current utilization is at 5% does anyone know if I drop this to 1% if it will give me the boost I need ?

No one can tell you if it will but I think you will do better focusing on the number of cards reporting a balance. With your mortgage scores, it appears that having all but one of the accounts reporting a zero balance can be helpful.

Re: Credit utilization

SouthJamaica — Sat, 02 Jun 2018 03:30:07 GMT

@Anonymous wrote:
I have three credit cards with one of them being an authorized user account
(AU) BOA 5% utilization 18,000 credit limit
Credit one 2% 5.00 300 credit limit
Capital one 1 % 4.00 400 credit limit

Let the 2 small ones report a zero balance.

Re: Credit utilization

Thomas_Thumb — Sat, 02 Jun 2018 14:25:31 GMT

AU cards are sometimes ignored by Fico 8 and Fico 9 (the one I have certainly is).

I would recommend allowing a small balamce to report one one of the two cards where Tiff88 is primary. Also, building up positive credit history on primary cards is more important than AU cards - which, by definition, are controlled by the primary holder regardless of who makes payment(s).

Re: Credit utilization

HeavenOhio — Sat, 02 Jun 2018 14:29:43 GMT

Welcome, @Anonymous.

AZEO (all cards reporting zero except one) works best when the positive balance is on a card where one is the primary user rather than an AU.

I'd report a tiny balance on the Credit One card. I'm choosing that because those cards tend to have fees and will probably have a balance anyway. Bring the AU and Capital One cards down to zero.

I'm not sure if that will give you 16 points. But the mortgage models like AZEO, and I think it's your best shot.

Re: Credit utilization

Anonymous — Sat, 02 Jun 2018 15:04:28 GMT

I actually tried that and my score dropped because the credit limit on the AU card is 18,000 and it pretty much controls my utilization

Re: Credit utilization

Anonymous — Sat, 02 Jun 2018 17:46:29 GMT

@Anonymous wrote:
I actually tried that and my score dropped because the credit limit on the AU card is 18,000 and it pretty much controls my utilization

Can you be very specific about what you tried? I.e....

What exactly were the balances on your three cards before the score drop?

What were the balances immediately after?

How much was the score drop?

When did the score drop happen? (Month/year or best of all M/D/Y)

What tool gave you the score that indicated the score drop? (A score that came with a credit card, myFICO Ultimate, Credit Check Total, Credit Karma, etc.).

Re: Credit utilization

Anonymous — Sat, 02 Jun 2018 18:18:34 GMT

My score dropped immediately following the reporting of 0% untilization of my BOA card with 18,000 credit limit and when my other two cards reported that 5 and 10.00 balances my score didn’t move and my aggregate utilization was still
At 0%.

Re: Credit utilization

Thomas_Thumb — Sat, 02 Jun 2018 19:52:07 GMT

I would recommend allowing a balance to report on the AU card and a small balance on one of the two cards where you are primary.I suspect you may have done that in the past. How does that result compare against a balance on the AU card only?

Side note: some other posters have reported a score drop when all AU cards report zero balance regardless of how large primary card CLs are in comparison to AU cards and the fact that primary card(s) were still reporting a balance. There is not a straight forward explanation for the score drop in that situation.

Re: Credit utilization

Anonymous — Sat, 02 Jun 2018 20:04:40 GMT

This is exactly what I will try letting all of my cards report 1%

Re: Credit utilization

Thomas_Thumb — Sun, 03 Jun 2018 00:00:00 GMT

@Anonymous wrote:
This is exactly what I will try letting all of my cards report 1%

Actually I think a better result will be realized reporting a small balance (say between $3 and $10) on one of your cards with your other card reporting a zero balance. Have the AU card report a small balance as well (say between $10 and $500).

Re: Credit utilization

Anonymous — Sun, 03 Jun 2018 01:11:52 GMT

Also bear in mind that I am pretty sure you are talking about some credit monitoring system (CMS) that gives you an alert when a balance changes on a credit card and then gives you a new credit score. If so, the scoring model is either FICO 8 or Vantage Score. Neither of those will be used by a mortgage lender -- it's the mortgage score that matters, and AUs are much more likely to be counted interchangeably with cards in your name for the older mortgage models.

I asked earlier if you could tell us where the scores you are seeing are coming from (Credit Check Total, Credit Karma, myFICO Ultimate, a score from a credit card, etc.). If you can tell us that this would also help.

Re: Credit utilization

DollyLama — Sun, 03 Jun 2018 02:23:11 GMT

+1 Are you actually seeing mortgage scores, and you need your "middle" mortgage score to rise 16pts? They are correct in carrying a balance across multiple cards are damaging to mortgage scores.

Tiff- do you have any derogs, ie late payments, charge offs, collections on open or closed accounts? If so how old are they? I honestly do not know, but with your primary CC, you might have a thin and young file with the low limits- exclusion of being an authorized user. Are any of the cards approaching a milestone of 1 yr or more in age, if so in 2 months that can bounce some scores up from FICO 8 perspective, don't remember how much it affected my mortgage scores.