topic Utilization ratio increase, score increased why? in Understanding FICO® Scoring

Utilization ratio increase, score increased why?

Anonymous — Fri, 02 Nov 2018 02:27:22 GMT

So I just received my score and it went up 6 points. 732 to 738 but I am confused on how because my last month utilization ratio was 3% and this month it went up to 7% and my score increased. I have 3 credit cards I left a $395 balance on one but the rest at 0. Last month my ratio was 3% but my score went down because it went from 1% to 3% (still leaving a balance only on one card). I am super confused does your score go up if you lower your ratio or make it higher?

Re: Utilization ratio increase, score increased why?

thornback — Fri, 02 Nov 2018 02:50:22 GMT

Well... it is the first of the month, so aging may be a factor (aging occurs on the 1st of the month for all accounts; inquiries age on their exact recorded date). Have any of your accounts passed any major age milestone as of today? Or has your AAoA aged another year or perhaps hit a 6 month mark? Also check negative accounts -- for instance, prior late payments hitting a certain age will also result in a score increase. The bump from aging may have offset the utilization ding.

Re: Utilization ratio increase, score increased why?

FireMedic1 — Fri, 02 Nov 2018 08:05:01 GMT

Like the poster above said. So many variables. Who knows. I get a 4 point alert with no explanation on TU last month. I just roll with it. Long as its an increase. I'll take it. I gave up trying to figure out the non explanation alerts from MyFICO in between monthly pulls. I'll check Nov soon and see whats up.

Re: Utilization ratio increase, score increased why?

HeavenOhio — Fri, 02 Nov 2018 13:00:26 GMT

@Anonymous, alerts aren't necessarily tied to score changes. The balance change triggered the alert, but it certainly didn't trigger the change in score.

The increase likely occurred because something aged. An inquiry may have become unscorable, or you may have crossed an AoYA (age of youngest account) or AAoA (average age of accounts) threshold.

@FireMedic1 offers a great example. A handful of alerts come with no "reason" at all. I also see them occasionally, all from TU.

Re: Utilization ratio increase, score increased why?

FireMedic1 — Fri, 02 Nov 2018 13:07:45 GMT

@HeavenOhio wrote:
@Anonymous, alerts aren't necessarily tied to score changes. The balance change triggered the alert, but it certainly didn't trigger the change in score.

The increase likely occurred because something aged. An inquiry may have become unscorable, or you may have crossed an AoYA (age of youngest account) or AAoA (average age of accounts) threshold.

@FireMedic1 offers a great example. A handful of alerts come with no "reason" at all. I also see them occasionally, all from TU.

Dang I'm moving up! Heaven agreed with me. LOL!!!!!! Its always TU!

Re: Utilization ratio increase, score increased why?

Anonymous — Fri, 02 Nov 2018 16:07:31 GMT

OP, your score changes are not related to your utilization changes. If you're talking movement below 8.9% utilization (1% to 5% to 3% to 7% etc) none of that will have any bearing on your FICO scores. Those balance changes however do generate alerts informing you that something changed on your credit report, but as HO mentioned above the alerts do not have to be at all tied to the score change(s) you're provided with. In your case, they have absolutely nothing to do with your score changes.

Re: Utilization ratio increase, score increased why?

Anonymous — Sat, 03 Nov 2018 01:33:33 GMT

@BrutalBodyShots
So my utilization ratio does not increase or decrease my score? I thought having an good ratio increases your score? What actually increases your score then?

Re: Utilization ratio increase, score increased why?

HeavenOhio — Sat, 03 Nov 2018 04:44:12 GMT

Higher utilization does decrease scores, but thresholds need to be crossed. Known thresholds are 8.9%, 28.9%, 48.9%, 68.9%, and 88.9%. Some have reported score decreases at a point below 8.9%, but that isn't common.

In your case, it's possible that your increased utilization could cause a score decrease, but it's not likely. But because something other than utilization caused your score to increase, this wouldn't be the right month to try to discern that.

Re: Utilization ratio increase, score increased why?

Anonymous — Sat, 03 Nov 2018 09:15:42 GMT

@BrutalBodyShots
So my utilization ratio does not increase or decrease my score?

Not when your before/after utilization are within the same threshold range. You referenced 1%, 3% and 7% utilization. All of those points land in the 1%-8.9% range; Your utilization would have to be 0% or >9% under most circumstances to see a change in score related to that utilization change. Since that wasn't the case based on the percentages you provided, you wouldn't expect to see a score change.