topic All Zero Penalty to AZEO in Understanding FICO® Scoring

All Zero Penalty to AZEO

Anonymous — Fri, 21 Feb 2020 22:41:32 GMT

Many of you here already know the impact on scores when utilization reports 0% to CB’s. This thread shares my recent experience and the penalty for letting my CR’s reflect “zero usage.”

For awhile now I’ve been using the AZEO (all zero except one) method, meaning I let only one of my CC’s report a balance less than 28.9% of the card limit (individual) and less then 8.9% of my overall limit (aggregate) when statement cuts and have the rest of my accounts report zero. Whether or not you use the AZEO strategy, keep in mind those individual and aggregate utilization thresholds aforementioned as it may help improve your scores if below them.

I’ve noticed that this AZEO method works for me, but generally is not needed unless you are in the works of seeking new credit, a mortgage or loan.

Recently, my CR’s reflected 0% utilization due to the account being rotated with utilization was last to report among all my cards. Thus, dropping my scores for a short period of time until the account that reflected a balance finally reported.

Prior to this change, the card I was letting report reflected a 3% individual utilization and less than 1% aggregate making a 3% individual dip and minute aggregate decrease.

I was penalized by all 3 Bureau’s, EQ, TU, EX dropping my scores -20, -16, -14 respectively. When my account with a balance (a 3% individual utilization too) finally reported, my scores increased EQ (+23), TU (+16), EX (+16)

Note that points may differ depending on profile type. I have a clean, but thin profile with only a couple years of history.

Using AZEO does not mean you are only using one card per statement period. You can use as many cards you like as long as you pay them down to zero before statement cut, except for one. Hence why I put zero usage in quotation at the end of the first paragraph.

TLDR: As a result of letting util report 0%, my scores declined -20, -16, -14 for EQ, TU, EX respectively. Then scores inclined EQ (+23), TU (+16), EX (+16) when a 3% utilization (individual) and less than 1% aggregate. The exact utilization’s for which was reflected prior to the 0% report.

Re: All Zero Penalty to AZEO

Anonymous — Sat, 22 Feb 2020 00:44:03 GMT

Nice post, @angelwingz!

Now I'm curious about the difference in before/after EQ/EX 8 scores - +3 and +2.

Specifically because the aging values between reports would have all been the same.

Re: All Zero Penalty to AZEO

Anonymous — Sat, 22 Feb 2020 01:16:52 GMT

I'm not too sure. Everything on my CR's are the same. I found that interesting as well. Could it be possible that its because 2 of my accounts aged to 2yrs, 6mo?

Re: All Zero Penalty to AZEO

Anonymous — Sat, 22 Feb 2020 01:26:04 GMT

@Anonymous wrote:
I'm not too sure. Everything on my CR's are the same. I found that interesting as well. Could it be possible that its because 2 of my accounts aged to 2yrs, 6mo?

Did you see all those changes via your myFICO subscription alerts this month? (I have had FICO Premier for over a year now.)

The aging would have happened on 02/01, and be reflected in the first drops. I have seen a few TU alerts due to aging alone, but not with EQ/EX.

Re: All Zero Penalty to AZEO

Anonymous — Sat, 22 Feb 2020 01:53:25 GMT

Yes, I have MyFico 3B subscription.

And your right, I totally forgot ages count on the first day of a new month.

Re: All Zero Penalty to AZEO

AllZero — Sat, 22 Feb 2020 01:58:55 GMT

When you reached 2 years AAoA, did you notice any change on your credit report?

Re: All Zero Penalty to AZEO

Anonymous — Sat, 22 Feb 2020 02:04:08 GMT

Yes, I believe I did receive a point increase. Couldn't tell you exactly what that number off the top of my head, but I want to say 5 points or so.

Re: All Zero Penalty to AZEO

Traveler101 — Sat, 22 Feb 2020 02:40:24 GMT

@Anonymous wrote:
Many of you here already know the impact on scores when utilization reports 0% to CB’s. This thread shares my recent experience and the penalty for letting my CR’s reflect “zero usage.”

For awhile now I’ve been using the AZEO (all zero except one) method, meaning I let only one of my CC’s report a balance less than 28.9% of the card limit (individual) and less then 8.9% of my overall limit (aggregate) when statement cuts and have the rest of my accounts report zero. Whether or not you use the AZEO strategy, keep in mind those individual and aggregate utilization thresholds aforementioned as it may help improve your scores if below them.

I’ve noticed that this AZEO method works for me, but generally is not needed unless you are in the works of seeking new credit, a mortgage or loan.

Recently, my CR’s reflected 0% utilization due to the account being rotated with utilization was last to report among all my cards. Thus, dropping my scores for a short period of time until the account that reflected a balance finally reported.

Prior to this change, the card I was letting report reflected a 3% individual utilization and less than 1% aggregate making a 3% individual dip and minute aggregate decrease.

I was penalized by all 3 Bureau’s, EQ, TU, EX dropping my scores -20, -16, -14 respectively. When my account with a balance (a 3% individual utilization too) finally reported, my scores increased EQ (+23), TU (+16), EX (+16)

Note that points may differ depending on profile type. I have a clean, but thin profile with only a couple years of history.

Using AZEO does not mean you are only using one card per statement period. You can use as many cards you like as long as you pay them down to zero before statement cut, except for one. Hence why I put zero usage in quotation at the end of the first paragraph.

TLDR: As a result of letting util report 0%, my scores declined -20, -16, -14 for EQ, TU, EX respectively. Then scores inclined EQ (+23), TU (+16), EX (+16) when a 3% utilization (individual) and less than 1% aggregate. The exact utilization’s for which was reflected prior to the 0% report.

For me, fico9 took a 9 point drop I think it was, in the last navy update. Simply because of a 2 card reporting a bal. Normally, I see a reason code for my score, the length of time accounts have been established. That was replaced by, Too many accounts with balances. Anxiously awaiting here to see all accounts report next month. Ive paid the 2nd card off. Plus, decreased overall uti to under 2%.

Re: All Zero Penalty to AZEO

AllZero — Sat, 22 Feb 2020 03:23:02 GMT

@Anonymous wrote:
Nice post, @angelwingz!

Agreed. It's a quality post. Those are significant points loss for going All Zero. AZEO is a definate score boost.

Re: All Zero Penalty to AZEO

AllZero — Sat, 22 Feb 2020 03:37:30 GMT

@Anonymous wrote:
Yes, I believe I did receive a point increase. Couldn't tell you exactly what that number off the top of my head, but I want to say 5 points or so.

I recall reading Thomas_Thumb mentioned AAoA is a scoring attribute. IIRC 24 months should be a AAoA threshold.

https://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Question-about-AAoA-and-AUs/m-p/5565366/highlight/true#M153536

Re: All Zero Penalty to AZEO

Anonymous — Sat, 22 Feb 2020 04:22:30 GMT

@Anonymous wrote:

TLDR: As a result of letting util report 0%, my scores declined -20, -16, -14 for EQ, TU, EX respectively. Then scores inclined EQ (+23), TU (+16), EX (+16) when a 3% utilization (individual) and less than 1% aggregate. The exact utilization’s for which was reflected prior to the 0% report.

I completely forgot that your first alerts are based off the previous scores - either alerted or from a 1B or 3B report.

Aging was already added in with your first alert - EQ +3 and EX +2, so you saw the net loss: -23 became -20 and -16 became -14.

The next alert would compare to that first alert: +23 and +16.

I think it's highly likely that you gained those extra points from AoOA 2yrs 6mos, since that's a multiple of 3 and AAoA/AoYA are not.

I've seen TU +7 increases at AAoA 9mo and AAoA 1yr 6mos, both multiples of 3 when the others were not. It can happen.

Re: All Zero Penalty to AZEO

Egaffne2 — Sat, 22 Feb 2020 07:07:10 GMT

I just want to chime in here on $0 scoring penalty when it comes to my AU account. Regardless of balances reported on my regular accounts, like clockwork everytime that AU account reports $0 I am penalized exactly 14 points. Then when money is added to it again it goes up another 14. This has been happening on and off forever now. I'll log in and be down 14 points and go well they must of paid it off again and sure enough I check my report and it's at $0. First time it happened I was baffled until I figured out this was the culprit. Just recently for the first time after being at $0 and reporting a balance it went up 15 instead of 14. That one point is probably another small change in my report at the same time. Just thought this was worth adding and might help someone. If your AU account or accounts are at $0 try telling the person to put a couple bucks on one and see what happens. For me it's a sure increase

Re: All Zero Penalty to AZEO

AllZero — Sat, 22 Feb 2020 07:21:15 GMT

@Egaffne2 Here's a good read pertaining to AU accounts. Update: FICO2 experiment (is it worth it?)

Re: All Zero Penalty to AZEO

Anonymous — Sat, 22 Feb 2020 13:50:57 GMT

@Anonymous wrote:
@Anonymous wrote:

TLDR: As a result of letting util report 0%, my scores declined -20, -16, -14 for EQ, TU, EX respectively. Then scores inclined EQ (+23), TU (+16), EX (+16) when a 3% utilization (individual) and less than 1% aggregate. The exact utilization’s for which was reflected prior to the 0% report.
I completely forgot that your first alerts are based off the previous scores - either alerted or from a 1B or 3B report.

Aging was already added in with your first alert - EQ +3 and EX +2, so you saw the net loss: -23 became -20 and -16 became -14.

The next alert would compare to that first alert: +23 and +16.

I think it's highly likely that you gained those extra points from AoOA 2yrs 6mos, since that's a multiple of 3 and AAoA/AoYA are not.

I've seen TU +7 increases at AAoA 9mo and AAoA 1yr 6mos, both multiples of 3 when the others were not. It can happen.

Thank you, Cassie! That's what I thought. I appreciate your responses.

Re: All Zero Penalty to AZEO

M_Smart007 — Sat, 22 Feb 2020 22:03:26 GMT

I definitely see a EX F8 score change when I cross 2.6 AAoA have crossed both ways several times LAST year.

EQ's AAoA is off by a couple of months, so they are not calculating something right.

But I am not going to mess with them, as it would probably turn into a nightmare.

They are reporting 3 open Citi cards even though I closed one and moved the CL over to one of My DC cards.

TU does not report (2) of My HSBC cards. So The AAoA has been staying above 2.6 years.

My score's across the big 3.. will probably never be even the rest of My life ..LOL

Edited for minor error.

Re: All Zero Penalty to AZEO

Traveler101 — Sat, 22 Feb 2020 22:07:10 GMT

@M_Smart007 wrote:
I definitely see a EX F8 score change when I cross 2.6 AAoA have crossed both ways several times LAST year.

EQ's AAoA is off by a couple of months, so they are not calculating something right.
But I am not going to mess with them, as it would probably turn into a nightmare.
They are reporting 3 open Citi cards even though I closed one and moved the CL over to one of My DC cards.

TU does not report (2) of My HSBC cards. So The AAoA has been staying above 2.6 years.

My score's across the big 3.. will probably never be even the rest of My life ..LOL

Edited for minor error.

Are you referring to avg age open accts = AAoA? And do you know, is there any kind of extra bump in score when open cc reaches 5 year history, simular to like the 1 year mark?

Re: All Zero Penalty to AZEO

M_Smart007 — Sat, 22 Feb 2020 22:17:05 GMT

@Traveler101 wrote:
@M_Smart007 wrote:
I definitely see a EX F8 score change when I cross 2.6 AAoA have crossed both ways several times LAST year.

EQ's AAoA is off by a couple of months, so they are not calculating something right.
But I am not going to mess with them, as it would probably turn into a nightmare.
They are reporting 3 open Citi cards even though I closed one and moved the CL over to one of My DC cards.

TU does not report (2) of My HSBC cards. So The AAoA has been staying above 2.6 years.

My score's across the big 3.. will probably never be even the rest of My life ..LOL

Edited for minor error.
Are you referring to avg age open accts = AAoA? And do you know, is there any kind of extra bump in score when open cc reaches 5 year history, simular to like the 1 year mark?

Yes talking AAoA .. (Average age of All?) FICO 8 Classic score ..

believe you gain points at 5 or 6 years, I can't remember. I think it is possible at 2.0, 2.6 and 3.0

(I could be wrong on this and be corrected by the PRO's)

I used to be 8-10 years AAoA at one time. but I used to really never check that much.

Pretty sure you gain when your AoYA (youngest account crosses 1 year.)

I lost only 2 months AAoA for opening 3 accounts in one Month, Due to the way my portfolio is weighted with accounts.

and no points loss for inquiries because I am way beyond scoreable inq. hits.

ETA: I opened 20 or 21 accounts last year.

Re: All Zero Penalty to AZEO

Traveler101 — Sat, 22 Feb 2020 22:19:02 GMT

Thanks. It gives me something to look forward to. My fico8 are gradually climbing, except tu. It moves at a snails pace.

Re: All Zero Penalty to AZEO

M_Smart007 — Sat, 22 Feb 2020 22:22:16 GMT

@Traveler101 wrote:
Thanks. It gives me something to look forward to. My fico8 are gradually climbing, except tu. It moves at a snails pace.

You are welcome, I make a great crash dummy

here are the last 2 accounts I opened at the end of 2019

https://ficoforums.myfico.com/t5/Credit-Card-Approvals/Chase-Marriott-Approval-LOL-24/m-p/5811610#M638611

https://ficoforums.myfico.com/t5/Credit-Card-Approvals/NFCU-Platinum-Approval-15-000-00/m-p/5835660#M643551

I have just added 3 more in the last 4 weeks.

I DO NOT RECOMMEND DOING THIS!!

Re: All Zero Penalty to AZEO

Traveler101 — Sat, 22 Feb 2020 22:29:57 GMT

Thats one thing thats always baffled me. Looking at stats, and how banks/c unions determine lines and rates. My tu 8 is 668. I know navy uses 9 tu new accts. I was approved at best rate, 25k sl vs you. Its a very strong indicator on how institutions do not rely soley on score alone. And I have a bk7 that will be 7 years old in july 2020. One would think your approval would be much better and better rate. I scratch my head over the determinations lenders make.