topic Re: It’s True in Understanding FICO® Scoring

It’s True

joeyv1985 — Fri, 29 Jan 2021 18:27:13 GMT

My Fico 8 scores dropped anywhere between 9-14 points because all of my CC's showed a $0 balance. One went from $262 to $0, while another went from $8(yes $8) to $0. The latter I paid 1 day after the statement arrived and for some reason it reported it to the CB's as a $0 balance. Only balance that doesn't report is my Amex Plat that showed a balance of about $1200. 2 of the CC's haven't had a balance report for a couple of months. Frustrating.

Re: It’s True

Mr_Mojo_Risin — Fri, 29 Jan 2021 19:03:29 GMT

Yep very true! Most of the DP's I've read say a $10-20 balance is usually pretty solid for AZEO. If that's what you were trying to do with the $8.

Was the $8 balance with Chase by chance? They're good for updating whenever a balance is paid to 0.

Re: It’s True

joeyv1985 — Fri, 29 Jan 2021 19:30:06 GMT

@Mr_Mojo_Risin wrote:
Yep very true! Most of the DP's I've read say a $10-20 balance is usually pretty solid for AZEO. If that's what you were trying to do with the $8.
Was the $8 balance with Chase by chance? They're good for updating whenever a balance is paid to 0.

Hello Bowiefan,

Yes it was a Chase Sapphire Card. You live and you learn I guess. What gets me is when the balance for the Chase went from $0 to $19, and Equifax dinged my score by about 5 points. Can't win.

Re: It’s True

Mr_Mojo_Risin — Fri, 29 Jan 2021 19:45:07 GMT

@joeyv1985 wrote:
@Mr_Mojo_Risin wrote:
Yep very true! Most of the DP's I've read say a $10-20 balance is usually pretty solid for AZEO. If that's what you were trying to do with the $8.
Was the $8 balance with Chase by chance? They're good for updating whenever a balance is paid to 0.
Hello Bowiefan,

Yes it was a Chase Sapphire Card. You live and you learn I guess. What gets me is when the balance for the Chase went from $0 to $19, and Equifax dinged my score by about 5 points. Can't win.

I know what you mean.

It's like walking a tight rope sometimes! Lol

Re: It’s True

Anonymous — Mon, 01 Feb 2021 01:54:48 GMT

@joeyv1985 wrote:
My Fico 8 scores dropped anywhere between 9-14 points because all of my CC's showed a $0 balance.

All it will take is for one of your cards to report a [non-zero] balance and those 9-14 points will immediately return. Utilization is only a single point in time metric, so no need to sweat an all-zero penality as you can "fix" it very quickly if you desire.

Re: It’s True

joeyv1985 — Mon, 01 Feb 2021 04:43:22 GMT

@Anonymous wrote:
@joeyv1985 wrote:
My Fico 8 scores dropped anywhere between 9-14 points because all of my CC's showed a $0 balance.
All it will take is for one of your cards to report a [non-zero] balance and those 9-14 points will immediately return. Utilization is only a single point in time metric, so no need to sweat an all-zero penality as you can "fix" it very quickly if you desire.

Agree @Anonymous. But it seems so "petty" on their part to punish you for keeping your finances in check. I realized it's a charge card, but the Amex Plat showed $1200 reporting. It's not like I didn't use any of my plastic.

Re: It’s True

Anonymous — Mon, 01 Feb 2021 12:31:46 GMT

That's just how the mechanism works. Since charge cards don't have a publicized limit, they can't be worked into the utilization percentage. FICO sees zero balances and zero utilization on revolvers and basically can't assess your ability to manage debt because you show no debt, so it lowers your score (remember, scoring was invented for the benefit of lenders, not consumers). Show it $10 on one card and you'll gain the lost points back as BBS was saying. Newer versions such as FICO 10T utilize trended data so they may be able to account for usage when showing zero balances, since they use a "look back" of around 24 months. If 10T is adopted there's a chance that the all-zero penalty goes away because of that (guesswork on my part - I have no knowledge of its workings and no one I know of uses it).

Re: It’s True

joeyv1985 — Mon, 01 Feb 2021 21:49:54 GMT

@Anonymous wrote:
That's just how the mechanism works. Since charge cards don't have a publicized limit, they can't be worked into the utilization percentage. FICO sees zero balances and zero utilization on revolvers and basically can't assess your ability to manage debt because you show no debt, so it lowers your score (remember, scoring was invented for the benefit of lenders, not consumers). Show it $10 on one card and you'll gain the lost points back as BBS was saying. Newer versions such as FICO 10T utilize trended data so they may be able to account for usage when showing zero balances, since they use a "look back" of around 24 months. If 10T is adopted there's a chance that the all-zero penalty goes away because of that (guesswork on my part - I have no knowledge of its workings and no one I know of uses it).

Copy that. I'm going to the grocery store in the next hour or so and buy some potatoes and a loofah on my Citi DC that reports towards the end of the week.

Re: It’s True

Thomas_Thumb — Tue, 02 Feb 2021 03:05:28 GMT

@joeyv1985 wrote:
My Fico 8 scores dropped anywhere between 9-14 points because all of my CC's showed a $0 balance. Frustrating.

The truth will set you free .

Re: It’s True

joeyv1985 — Mon, 08 Feb 2021 16:29:03 GMT

@Anonymous wrote:
@joeyv1985 wrote:
My Fico 8 scores dropped anywhere between 9-14 points because all of my CC's showed a $0 balance.
All it will take is for one of your cards to report a [non-zero] balance and those 9-14 points will immediately return. Utilization is only a single point in time metric, so no need to sweat an all-zero penality as you can "fix" it very quickly if you desire.

One of my CC's reported a $22 balance, and Equifax bumped up my score by 21 points. Whew!

Re: It’s True

Anonymous — Mon, 08 Feb 2021 18:26:12 GMT

Yup, the points come back just as easily as they go away for an AZ penalty. Glad to hear that.

I don't really look at it as being punished though. The algorithm has to see utilization to have data to go off of. Think of someone that's extremely financially responsible and only deals in cash, never using credit. No data to go off of, so no score... where in terms of risk they're an 850.

Re: It’s True

joeyv1985 — Mon, 08 Feb 2021 18:30:43 GMT

@Anonymous wrote:
Yup, the points come back just as easily as they go away for an AZ penalty. Glad to hear that.

I don't really look at it as being punished though. The algorithm has to see utilization to have data to go off of. Think of someone that's extremely financially responsible and only deals in cash, never using credit. No data to go off of, so no score... where in terms of risk they're an 850.

10-4. Too bad my Amex Plat doesn't factor more into the scoring model.

Re: It’s True

joeyv1985 — Mon, 08 Feb 2021 19:38:03 GMT

@Anonymous wrote:
Yup, the points come back just as easily as they go away for an AZ penalty. Glad to hear that.

I don't really look at it as being punished though. The algorithm has to see utilization to have data to go off of. Think of someone that's extremely financially responsible and only deals in cash, never using credit. No data to go off of, so no score... where in terms of risk they're an 850.

Got another one BBS. Transunion is up 11 pts to 797. Highest Fico 8 yet.

Re: It’s True

Anonymous — Mon, 08 Feb 2021 21:36:44 GMT

@joeyv1985 wrote:
10-4. Too bad my Amex Plat doesn't factor more into the scoring model.

Yeah, charge cards are different animals. From what I've read of them there are little to no benefits of having them when it comes to Fico scoring. When I was rebuilding I was considering one because I thought it could help my credit mix or some slice of the Fico pie, but ultimately I decided against it.

Re: It’s True

Anonymous — Mon, 08 Feb 2021 21:37:57 GMT

@joeyv1985 wrote:
Got another one BBS. Transunion is up 11 pts to 797. Highest Fico 8 yet.

Sweet, nice gain and congrats! Was the change that caused the 11 point increase the reporting of a balance / eliminating the AZ penalty?

Re: It’s True

joeyv1985 — Mon, 08 Feb 2021 21:45:36 GMT

@Anonymous wrote:
@joeyv1985 wrote:
Got another one BBS. Transunion is up 11 pts to 797. Highest Fico 8 yet.
Sweet, nice gain and congrats! Was the change that caused the 11 point increase the reporting of a balance / eliminating the AZ penalty?

Thanks. Correct. I now show 1 CC out of 4(Sans the Amex Plat) reporting a balance. The $23 reporting is only .0713% of my total balance across all cards.

Re: It’s True

joeyv1985 — Wed, 10 Feb 2021 17:00:02 GMT

@joeyv1985 wrote:
@Anonymous wrote:
@joeyv1985 wrote:
Got another one BBS. Transunion is up 11 pts to 797. Highest Fico 8 yet.
Sweet, nice gain and congrats! Was the change that caused the 11 point increase the reporting of a balance / eliminating the AZ penalty?
Thanks. Correct. I now show 1 CC out of 4(Sans the Amex Plat) reporting a balance. The $23 reporting is only .0713% of my total balance across all cards.

Experian just reported a 22 pt increase of my Fico 8 to 788. I feel whole again:-) Thanks for the info BBS.

Re: It’s True

Anonymous — Wed, 10 Feb 2021 18:35:28 GMT

Sweet and congratulations!

Re: It’s True

joeyv1985 — Fri, 12 Feb 2021 23:12:53 GMT

@Anonymous wrote:
Sweet and congratulations!

Thank you. This is the highest my Fico 8's have been(777-797). I have several CC's that will age past 12 months once Q1 is over. Hopefully, this will push my 8's over 800. However, I have a car loan that I PIF in December that's probably going to report next month so it's going to be interesting how much that will affect my scores. We will see.

Re: It’s True

Anonymous — Sat, 13 Feb 2021 07:31:15 GMT

Was that car loan your only open loan, or do you have another?