topic Re: Score Not Increasing Much... in Understanding FICO® Scoring

Score Not Increasing Much...

KeithW — Thu, 20 Aug 2020 05:41:32 GMT

Six months ago I had 4 of the below cards over 90% utilization and 4 more over 80%. My total CC debt was very close to $44,000 dollars. I have been working on paying down my debt and as you can see below, it is in much better shape. I hope to have zero debt after the first of the year. I have no late payments since 2017, when I had a 30 day late on my auto loan. The only derogatory was a 2018 medical collection of my spouse, which was immediately paid.

Six months ago my FICO scores were 648, 631 and 614. They are currently 670, 660 and 639. My Vantage Score is 740, but I don't know what it was to begin with. So I saw a 20-30 point jump. Considering the number of cards that dropped below multiple thresholds and the overal utilization dropping so much, shouldn't I have seen a bigger jump? Additionally, the FICO score simulator says that even paying down all my CC debt would only get me a score in the low 700s. Is the single 30 day late and the collection holding me down? The collection is only reported on my Equifax, which is the highest score (670).

Re: Score Not Increasing Much...

Brian_Earl_Spilner — Thu, 20 Aug 2020 07:12:32 GMT

As long as you have any derogatory your score will be held down.

Re: Score Not Increasing Much...

SouthJamaica — Thu, 20 Aug 2020 12:37:42 GMT

@KeithW wrote:
Six months ago I had 4 of the below cards over 90% utilization and 4 more over 80%. My total CC debt was very close to $44,000 dollars. I have been working on paying down my debt and as you can see below, it is in much better shape. I hope to have zero debt after the first of the year. I have no late payments since 2017, when I had a 30 day late on my auto loan. The only derogatory was a 2018 medical collection of my spouse, which was immediately paid.

Six months ago my FICO scores were 648, 631 and 614. They are currently 670, 660 and 639. My Vantage Score is 740, but I don't know what it was to begin with. So I saw a 20-30 point jump. Considering the number of cards that dropped below multiple thresholds and the overal utilization dropping so much, shouldn't I have seen a bigger jump? Additionally, the FICO score simulator says that even paying down all my CC debt would only get me a score in the low 700s. Is the single 30 day late and the collection holding me down? The collection is only reported on my Equifax, which is the highest score (670).

Congratulations. You're making good progress. Keep up the good work.

If you're primarily interested in getting the scores to rise more quickly, I would focus on trying to get each account down to 28%. Then, when you've accomplished that, start zeroing them out. But if your primary goal is to get out of debt then what you're doing is perfect.

You might also want to try attacking the negatives by sending verification letters to the bureaus; that sometimes precipitates their falling off.

Re: Score Not Increasing Much...

FlaDude — Thu, 20 Aug 2020 14:19:58 GMT

@Brian_Earl_Spilner wrote:
As long as you have any derogatory your score will be held down.

The good news is that even though the 30 day late won't drop off for 7 years, it will have less effect as it ages. I had FICO 8 scores above 780 before my last 30 day late dropped off. Of course, waiting for derogs to age is like watching paint dry.

Re: Score Not Increasing Much...

Credit4Growth — Thu, 20 Aug 2020 16:15:13 GMT

He is doubly right ^^^👍👍

Re: Score Not Increasing Much...

KeithW — Thu, 20 Aug 2020 17:02:33 GMT

The 30 day was with Ford Credit and while they have since given us another 0% loan, they won't remove that 30 day.

Re: Score Not Increasing Much...

Anonymous — Fri, 21 Aug 2020 05:32:29 GMT

@KeithW wrote:
Six months ago I had 4 of the below cards over 90% utilization and 4 more over 80%. My total CC debt was very close to $44,000 dollars. I have been working on paying down my debt and as you can see below, it is in much better shape. I hope to have zero debt after the first of the year. I have no late payments since 2017, when I had a 30 day late on my auto loan. The only derogatory was a 2018 medical collection of my spouse, which was immediately paid.

Six months ago my FICO scores were 648, 631 and 614. They are currently 670, 660 and 639. My Vantage Score is 740, but I don't know what it was to begin with. So I saw a 20-30 point jump. Considering the number of cards that dropped below multiple thresholds and the overal utilization dropping so much, shouldn't I have seen a bigger jump? Additionally, the FICO score simulator says that even paying down all my CC debt would only get me a score in the low 700s. Is the single 30 day late and the collection holding me down? The collection is only reported on my Equifax, which is the highest score (670).

The late and collection are suppressing your scores. These are the obvious ones. Your aggregate utilization is only "fair" at 36.86%. In addition, individual util on 2-3 cards are theoretically near a "maxed out" threshold. When you cross a threshold fair -> good -> excellent, you gain points back. Go the other way, you lose points.

The individual cards with 60% + util are considered "poor" from a utilization standpoint. You have to get those paid down more.. Your BofA card at 79.29% is considered to be "very poor" from a utilization standpoint. It's near or is basically maxed out. Herein lies the risk; your credit limit can get reduced - a lot of banks are doing this - or the card can be shut down with a demand for the full balance.

You have at least 3-4 cards reporting $0 balances. FICO doesn't like $0 balances. So, while the low balances have a positive effect on aggregate util, my understanding is that FICO algorithms punishes for $0 balances. Not as counterintuitive as one might think. So, you may be getting penalized. Someone else can chime in more on this.

If the collection gets reported to Ex and TU, your scores will take a hit. That would suck, and would also be accurate reporting. In case you haven't, remember to go for pay-for-delete (PFD) for all collections if possible.

However, a paid collection is better than an unpaid one.

Get the balances down, fast. Get an installment tradeline to gain points for credit mix. Pay down Bofa card.

Re: Score Not Increasing Much...

FlaDude — Fri, 21 Aug 2020 11:16:52 GMT

@Anonymous wrote:

Herein lies the risk; your credit limit can get reduced - a lot of banks are doing this - or the card can be shut down with a demand for the full balance.

You have at least 3-4 cards reporting $0 balances. FICO doesn't like $0 balances. So, while the low balances have a positive effect on aggregate util, my understanding is that FICO algorithms punishes for $0 balances. Not as counterintuitive as one might think. So, you may be getting penalized. Someone else can chime in more on this.

I was under the impression that when accounts are closed by issuer that you could continue to pay monthly, you just can't add new charges. I hadn't read here about lenders requiring full payment immediately upon closing.

To clarify, FICO doesn't like all cards to have a zero balance, for optimum score you need to leave a small balance on one card (AZEO). Other than that FICO does like to see all cards with zero balances.

Re: Score Not Increasing Much...

Brian_Earl_Spilner — Fri, 21 Aug 2020 11:54:32 GMT

@FlaDude wrote:
@Anonymous wrote:

Herein lies the risk; your credit limit can get reduced - a lot of banks are doing this - or the card can be shut down with a demand for the full balance.

You have at least 3-4 cards reporting $0 balances. FICO doesn't like $0 balances. So, while the low balances have a positive effect on aggregate util, my understanding is that FICO algorithms punishes for $0 balances. Not as counterintuitive as one might think. So, you may be getting penalized. Someone else can chime in more on this.
I was under the impression that when accounts are closed by issuer that you could continue to pay monthly, you just can't add new charges. I hadn't read here about lenders requiring full payment immediately upon closing.

To clarify, FICO doesn't like all cards to have a zero balance, for optimum score you need to leave a small balance on one card (AZEO). Other than that FICO does like to see all cards with zero balances.

They can request payment in full at any time. Closing the account is usually the way they do that. It actually wasn't that uncommon back in the day, you would have to set up a payment arrangement. Some lenders figured that once they closed the account people wouldn't make them a priority to pay back so balance would be demanded in full upon closure. Cap1 did that to me long ago, so did US Bank.

Re: Score Not Increasing Much...

dragontears — Fri, 21 Aug 2020 12:36:11 GMT

@Brian_Earl_Spilner wrote:
@FlaDude wrote:
@Anonymous wrote:

Herein lies the risk; your credit limit can get reduced - a lot of banks are doing this - or the card can be shut down with a demand for the full balance.

You have at least 3-4 cards reporting $0 balances. FICO doesn't like $0 balances. So, while the low balances have a positive effect on aggregate util, my understanding is that FICO algorithms punishes for $0 balances. Not as counterintuitive as one might think. So, you may be getting penalized. Someone else can chime in more on this.
I was under the impression that when accounts are closed by issuer that you could continue to pay monthly, you just can't add new charges. I hadn't read here about lenders requiring full payment immediately upon closing.

To clarify, FICO doesn't like all cards to have a zero balance, for optimum score you need to leave a small balance on one card (AZEO). Other than that FICO does like to see all cards with zero balances.
They can request payment in full at any time. Closing the account is usually the way they do that. It actually wasn't that uncommon back in the day, you would have to set up a payment arrangement. Some lenders figured that once they closed the account people wouldn't make them a priority to pay back so balance would be demanded in full upon closure. Cap1 did that to me long ago, so did US Bank.

I am pretty sure the laws changed and credit card lenders can NOT demand full payment on a closed account, you are required to make the minimum payment on closed accounts.

Re: Score Not Increasing Much...

dragontears — Fri, 21 Aug 2020 12:42:42 GMT

@Anonymous wrote:

@KeithW wrote:
Six months ago I had 4 of the below cards over 90% utilization and 4 more over 80%. My total CC debt was very close to $44,000 dollars. I have been working on paying down my debt and as you can see below, it is in much better shape. I hope to have zero debt after the first of the year. I have no late payments since 2017, when I had a 30 day late on my auto loan. The only derogatory was a 2018 medical collection of my spouse, which was immediately paid.

Six months ago my FICO scores were 648, 631 and 614. They are currently 670, 660 and 639. My Vantage Score is 740, but I don't know what it was to begin with. So I saw a 20-30 point jump. Considering the number of cards that dropped below multiple thresholds and the overal utilization dropping so much, shouldn't I have seen a bigger jump? Additionally, the FICO score simulator says that even paying down all my CC debt would only get me a score in the low 700s. Is the single 30 day late and the collection holding me down? The collection is only reported on my Equifax, which is the highest score (670).

You have at least 3-4 cards reporting $0 balances. FICO doesn't like $0 balances. So, while the low balances have a positive effect on aggregate util, my understanding is that FICO algorithms punishes for $0 balances. Not as counterintuitive as one might think. So, you may be getting penalized. Someone else can chime in more on this.

This is wrong

As long as there is at least 1 card with a balance you will not get the scoring penalty. There is nothing wrong with having some cards reporting $0 and absolutely no reason to report a balance on every card from a scoring perspective.

Re: Score Not Increasing Much...

expatCanuck — Fri, 21 Aug 2020 14:21:05 GMT

Indeed. All other things being equal, you want 2 cards out of 3 reporting a zero balance. Actually, 2 *accounts* out of 3, I think.

@KeithW - some years back, my scores were in the mid-600's. I had one 30-day late (BoA), and that limited my scores to the low/mid 700's. It wasn't until that late dropped off my record that I was able to get my scores into the high 700's. (They've stayed north of 800 for 2+ years now.)

So, as others have said, for scoring, focus on getting & keeping single-card utilization below 79 / 49 / 28 percent, and the aggregate will take care of itself.

Re: Score Not Increasing Much...

tammyjk — Fri, 21 Aug 2020 15:55:44 GMT

Half of my cards have 0 balances and never penalized for it. However, the rest have under 5% utilization. When things with the economy got a bit shaky, I decided to pay off my cards. I did notice that just one card with a high utilization can sting. While I concentrated on the smaller accounts first my score barely moved. It wasn't until I got the two with the high use down that my score jumped 33 points.

Re: Score Not Increasing Much...

SouthJamaica — Fri, 21 Aug 2020 19:11:13 GMT

@Anonymous wrote:

......

You have at least 3-4 cards reporting $0 balances. FICO doesn't like $0 balances. So, while the low balances have a positive effect on aggregate util, my understanding is that FICO algorithms punishes for $0 balances.

That is absolutely untrue. The more zero balances the better. It rewards zero balances, and does not punish them.

The only thing it punishes in that regard is having ONLY zero balances.

If you have one account reporting a small balance, you're golden.

Re: Score Not Increasing Much...

SouthJamaica — Fri, 21 Aug 2020 19:13:04 GMT

@FlaDude wrote:
......

I was under the impression that when accounts are closed by issuer that you could continue to pay monthly, you just can't add new charges. .........

That's correct.

Re: Score Not Increasing Much...

SouthJamaica — Fri, 21 Aug 2020 19:14:18 GMT

.....They can request payment in full at any time.....

I'm pretty sure that's false.

Re: Score Not Increasing Much...

FlaDude — Fri, 21 Aug 2020 19:38:02 GMT

@SouthJamaica wrote:

.....They can request payment in full at any time.....

I'm pretty sure that's false.

I checked a couple of my cardmember agreements and don't see any verbiage that would require paying the full balance on account closure. BOA's does say full payment can be required in the case of default.

Re: Score Not Increasing Much...

RSX — Fri, 21 Aug 2020 19:45:50 GMT

hopefully none of his accounts get closed down, but whether they force you to pay in full, or you decide you have to, is a factor

i had a sync with a balance closed down - i didnt want it to report as 100% utilization (due to there being a balance with no CL to calc % on )

so i paid it off that month - so i feel like i was 'forced' to

to the OP -

1. you have been doing a great job paying down - congrats!

2. create a 29% plan

by this i mean do minimum payments + $10 on all accounts below 29% - then put all your extra funds towards the ones over 69%

once everything is below 69%, put all extra funds towards the accounts over 49% - rinse and repeat until ALL accounts are below 29%

then pay them off based on the highest interest accounts

good luck to you

Re: Score Not Increasing Much...

SouthJamaica — Sun, 23 Aug 2020 16:56:29 GMT

@RSX wrote:
hopefully none of his accounts get closed down, but whether they force you to pay in full, or you decide you have to, is a factor
i had a sync with a balance closed down - i didnt want it to report as 100% utilization (due to there being a balance with no CL to calc % on )
so i paid it off that month - so i feel like i was 'forced' to

to the OP -
1. you have been doing a great job paying down - congrats!
2. create a 29% plan
by this i mean do minimum payments + $10 on all accounts below 29% - then put all your extra funds towards the ones over 69%
once everything is below 69%, put all extra funds towards the accounts over 49% - rinse and repeat until ALL accounts are below 29%
then pay them off based on the highest interest accounts

good luck to you

That rarely happens. Usually, while it is true that for the purposes of computing aggregate utilization the limit is not counted but the balance is counted, on an individual account basis it is usually reported with the actual credit limit.

Re: Score Not Increasing Much...

KeithW — Sat, 29 Aug 2020 23:00:05 GMT

I am feeling a little better. Even though I haven't had any credit alerts showing big balance changes for a few weeks, this morning two of my scores jumped up about 15-20 points. I am hoping to get into the 700s when all my cards are below 30% util.