topic Re: CC utilization "steps" in Understanding FICO® Scoring

CC utilization "steps"

GregB — Sun, 07 Feb 2021 17:42:58 GMT

I'm finally digging out from the Covid disaster's effect on my finances. Covid really caused some problems with one business down 82% from the year before.

I remember that most FICO algorithms have steps in CC utilization on score. I seem to recall that anything over 80% is the same as 100%. I can't recall how many steps there are from maxxed out to zero utilization but recall it was a fairly low number, at least with the FICO versions that were commonly used 7-8 years ago when I was digging out from a divorce.

So are the steps?:

1-5%

5--50%

51-79%

80-100%

I'm mostly interested in the middle range as that 51% number sticks in my head from years ago when I was really on top of this. Second priority is if the 80% still counts as maxxed. I finally have the money from the second round of PPP and want to max my score to get to the point where I can refi my house at a reasonable interest rate as it is still the 5.875% when we purchased while I was still married to psychobitch.

Re: CC utilization "steps"

AllZero — Sun, 07 Feb 2021 17:47:41 GMT

Remember these aggregate utilization thresholds: 9%, 29%, 49%, 69%, 89%

Remember these individual utilization thresholds: 29%, 49%, 69%, 89%

I would recommend reading the below from ABCD2199
The Truth about Credit Card Utilization
My 11 Rules to Credit Rebuilding
FICO Score: What to pay down first?

From Birdman7
General Scoring Primer and Version 8 Master Thread rev.5.17.20

Re: CC utilization "steps"

AllZero — Sun, 07 Feb 2021 17:52:29 GMT

In addition, to optimize your EX2, TU4, EQ5 scores, you'll also want to reduce your number of revolving accounts reporting a balance to cross a scoring threshold.

Re: CC utilization "steps"

GregB — Mon, 08 Feb 2021 01:18:03 GMT

Thanks so much for the help. If these are as fixed at those amounts, it sure is an improvment over where we were 7-8 years ago. I'm going to drop one from 49.6% to 48% and see what happens. Another one closes a few days later and it will drop from 72% to 48%. A few days later on will drop from 12% to 0. I'll post the score changes. I'm at 719 EX FICO8 with $134k CC debt against $202k limit so it will take a couple others later in the month to drop me below 49% total utilization. All negatives are Utilization and too many accounts with balances.

Re: CC utilization "steps"

SouthJamaica — Mon, 08 Feb 2021 03:39:20 GMT

@GregB wrote:
I'm finally digging out from the Covid disaster's effect on my finances. Covid really caused some problems with one business down 82% from the year before.
I remember that most FICO algorithms have steps in CC utilization on score. I seem to recall that anything over 80% is the same as 100%. I can't recall how many steps there are from maxxed out to zero utilization but recall it was a fairly low number, at least with the FICO versions that were commonly used 7-8 years ago when I was digging out from a divorce.
So are the steps?:
0%
1-5%
5--50%
51-79%
80-100%
I'm mostly interested in the middle range as that 51% number sticks in my head from years ago when I was really on top of this. Second priority is if the 80% still counts as maxxed. I finally have the money from the second round of PPP and want to max my score to get to the point where I can refi my house at a reasonable interest rate as it is still the 5.875% when we purchased while I was still married to psychobitch.

No one really knows exactly.

I can't actually tell if you're talking about individual account utilization or aggregate revolving utilization.

If you're talking aggregate, I'm not convinced anyone knows where any of the "steps" are.

As to individual account utilization IMHO

-90% or more is considered maxed

-50% is big, getting under 50% gets you points and

-30% is big, getting under 30% gets you points

Re: CC utilization "steps"

Anonymous — Mon, 08 Feb 2021 04:28:31 GMT

@GregB don't expect gains necessarily for each card you bring under a threshold. For individual Revolvers it appears to simply deduct points for whichever is the highest individually utilized card or whichever card is in the highest interval, I should say. So expect points potentially whenever your highest individually utilized Revolver goes under a threshold.

5% 10% 30% 50% 70% 90% 100% are commonly believed, with standard rounding. The first threshold only seems to appear on some profiles when aggregate and all individuals are under 5%, I believe. The 10% threshold is only for aggregate, it's commonly believed. The rest are believed to be both.

Re: CC utilization "steps"

GregB — Sat, 13 Feb 2021 15:44:05 GMT

So here will be the first changes for a test. The first column is the Current Utilization on today's report and the second is the New Utilization after closing for the month. The total Utilization is the last line. The first five lines are CC that close today or tomorrow so should all affect reports on Monday-Tuesday by EX and a few days later by the others. The sizth line is a zero interest CC that closes 18th so will drop from 90% to 89% so may show if there is some change at 89% individual utilization. The next group all report 5-8 days after that so I might see that one by itself.

210215-1.png

Re: CC utilization "steps"

Anonymous — Sat, 13 Feb 2021 18:55:48 GMT

@GregB wrote:
So here will be the first changes for a test. The first column is the Current Utilization on today's report and the second is the New Utilization after closing for the month. The total Utilization is the last line. The first five lines are CC that close today or tomorrow so should all affect reports on Monday-Tuesday by EX and a few days later by the others. The sizth line is a zero interest CC that closes 18th so will drop from 90% to 89% so may show if there is some change at 89% individual utilization. The next group all report 5-8 days after that so I might see that one by itself.
210215-1.png

@GregB you may see gains when the first 5 report because you have 2 accounts less with a balance as they report $0.

unfortunately 89.4% is rounded to 89%, so it's already under the 90% threshold. Really wouldn't matter anyway because you already have a more highly utilized individual revolver that's at 99% that will go to 98% and therefore will not cross a threshold either.

So unless you have something else going on, I wouldn't expect any further increases because the most highly utilized revolver is not crossing any thresholds. Now, if you didn't have that revolver at 99% then the highest one would be the one you have at 89%, but it still would not offer any gains because it's going from 89% to 88% when the threshold is at 90%.

Remember standard rounding is used. So 89.5% or higher puts you in the 90% interval. You have to be under 89.5% to go to the next lower interval.

so your first increase should come when you bring the one that's at 99% under 90%. At least as far as utilization goes from an individual standpoint. I've not looked at aggregate yet.

Re: CC utilization "steps"

Anonymous — Sat, 13 Feb 2021 18:58:28 GMT

@GregB OK looking at aggregate you're going from what 61% to 52%, so that doesn't appear across any threshold either. You may see gains from bringing the two cards to $0 though.

Re: CC utilization "steps"

GregB — Sat, 13 Feb 2021 19:46:02 GMT

Definitely been at 760-770 FICO 8 with more than 50% utilization before but I also had 3-4 more accounts and 3-4 more with zero balance. Several accounts closed with stores that went out of business like The Great Indoors, etc. I hope it moves a bit as that one 98% util card is 5.24% interest and more than a third of the total balance of all accounts. The last account will probably report zero in a month or two.

Re: CC utilization "steps"

Anonymous — Sat, 13 Feb 2021 20:14:02 GMT

@GregB wrote:
Definitely been at 760-770 FICO 8 with more than 50% utilization before but I also had 3-4 more accounts and 3-4 more with zero balance. Several accounts closed with stores that went out of business like The Great Indoors, etc. I hope it moves a bit as that one 98% util card is 5.24% interest and more than a third of the total balance of all accounts. The last account will probably report zero in a month or two.

@GregB well I feel your pain, but finances over ficos is what I always say. Just start knocking down the high interest ones and when you get to that one, you get to that one. When you do, you'll get the points for that.

Meanwhile you'll still be earning points as your aggregate utilization crosses thresholds and as you cross balance thresholds. I mean unless you need the score for a reason, I can't blame you for leaving the balance on the low interest card, although I would still recommend bringing it under 90% because that may cause AA from other lenders.

never good to have a TL over 90%, 70% is pushing it.

Re: CC utilization "steps"

GregB — Sun, 14 Feb 2021 14:49:29 GMT

Well, it appears dropping those first two Utilizations below 50% might have been worth something. They both reported the new balances this morning to EX and my EX FICO 8 score went up 1 point to 720. The only other thing that reported was #4 also reported $0 again but it has been $0 for a year. They also did a CLD from $5001 to $2501 due to lack of use. Not going to Home Depot during the pandemic, sorry.

So, #3 and #5 close today, so perhaps they will update together tomorrow, which should show me what happens when the number of accounts with zero balance goes from 1 to 3.210215-1.png

Re: CC utilization "steps"

Anonymous — Sun, 14 Feb 2021 16:23:38 GMT

@GregB wrote:
Well, it appears dropping those first two Utilizations below 50% might have been worth something. They both reported the new balances this morning to EX and my EX FICO 8 score went up 1 point to 720. The only other thing that reported was #4 also reported $0 again but it has been $0 for a year. They also did a CLD from $5001 to $2501 due to lack of use. Not going to Home Depot during the pandemic, sorry.

So, #3 and #5 close today, so perhaps they will update together tomorrow, which should show me what happens when the number of accounts with zero balance goes from 1 to 3.210215-1.png

@GregB it's more likely you crossed a balance threshold for that point than a utilization threshold. You may get some points by adding two zeros, but it may not be enough, we will look forward to finding out. Good luck!

Re: CC utilization "steps"

GregB — Wed, 17 Feb 2021 14:45:21 GMT

#3 & #5 dropped to zero.

Gained 3 points to 723 (EX FICO 9).

#8 should drop from 83% to 44% and #9 should drop from 66% to 45% on same day next week.

Followed by #10 from 41% to 39% and #11 from 85% to 61%.

If these noticeably help the score with #7 only changing from 98% to 97%, that should help to determine the importance of each utilization or the highest utilization.

Re: CC utilization "steps"

Anonymous — Wed, 17 Feb 2021 17:20:16 GMT

@GregB wrote:
#3 & #5 dropped to zero.
Gained 3 points to 723 (EX FICO 9).

#8 should drop from 83% to 44% and #9 should drop from 66% to 45% on same day next week.
Followed by #10 from 41% to 39% and #11 from 85% to 61%.
If these noticeably help the score with #7 only changing from 98% to 97%, that should help to determine the importance of each utilization or the highest utilization.

@GregB unfortunately not because it does not rule out balance thresholds or total amount owed Thresholds. Now if you could control for crossing specific thresholds and realized score changes then and were able to reverse it and get the same numbers, that would be pretty explicit.

Re: CC utilization "steps"

GregB — Wed, 17 Feb 2021 17:50:42 GMT

That is why I said HELP to determine.

Can you explain "balance thresholds" and "total amount owed thresholds"?
These changes represent a fairly small amount of total revolving debt. The first two changes, which represent the first 6 accounts on that list only represented total balance on my report going from $134k to $128k. The next two groups of changes represent triple the dollar changes and have already been paid.

Re: CC utilization "steps"

Anonymous — Wed, 17 Feb 2021 18:43:47 GMT

@GregB wrote:
That is why I said HELP to determine.
Can you explain "balance thresholds" and "total amount owed thresholds"?
These changes represent a fairly small amount of total revolving debt. The first two changes, which represent the first 6 accounts on that list only represented total balance on my report going from $134k to $128k. The next two groups of changes represent triple the dollar changes and have already been paid.

@GregB OK you have revolving balance thresholds. That means once the actual revolving dollar amount crosses those thresholds, there are point deductions and the reverse is true.

The thresholds are not well known and we're just beginning to try to track those. It seems on version 8 at TransUnion, the first one may be between $4500 and $5500 roughly. So it's possible they could exist roughly every $5000, but then again that's all conjecture on my part until we confirm it. It would seem reasonable the thresholds would be the same across bureaus, but that may not be true. The mortgage scores definitely have lower thresholds, like between $100 and $200, For the first one I believe.

The algorithm also takes into account the total amount owed on everything meaning Revolvers a Loans and openended Accounts Accounts. We know nothing about those thresholds yet.

so if anything you may have crossed one balance threshold possibly on that first round of changes, then and how many points that's worth is going to be scorecard dependent, but for instance on mine it appeared to be 6 points on TU8, which coincidentally happened to be the same magnitude for a number of accounts with a balance threshold there.