topic Re: AU Penalty if no balance on 2 AU accts? in Understanding FICO® Scoring

AU Penalty if no balance on 2 AU accts?

W261w261 — Wed, 10 Mar 2021 04:56:20 GMT

I have been practicing AZEO ok, but in reading thru this mega-interesting section (like a college course) I remember seeing something along the lines of an "AU penalty." i am an AU on my wife's Bloomies and Nordstrom cards. One is 40 years old, the other 30, so it's really helping in the AAoA area. But, if I understand correctly, I should keep a small balance in {here's the question - one or both of the AU accounts}? If in both, that would make me AZe3, too many? Could I get away with a balance in just one of the two? Do I need to do this at all? Thanks

Re: AU Penalty if no balance on 2 AU accts?

Anonymous — Wed, 10 Mar 2021 06:31:08 GMT

@W261w261 wrote:
I have been practicing AZEO ok, but in reading thru this mega-interesting section (like a college course) I remember seeing something along the lines of an "AU penalty." i am an AU on my wife's Bloomies and Nordstrom cards. One is 40 years old, the other 30, so it's really helping in the AAoA area. But, if I understand correctly, I should keep a small balance in {here's the question - one or both of the AU accounts}? If in both, that would make me AZe3, too many? Could I get away with a balance in just one of the two? Do I need to do this at all? Thanks

I believe you need a balance on one of those AU accounts.

@Anonymous will be able to detail this better

Re: AU Penalty if no balance on 2 AU accts?

CH-7-Mission-Accomplished — Wed, 10 Mar 2021 13:49:04 GMT

@W261w261 wrote:
I have been practicing AZEO ok, but in reading thru this mega-interesting section (like a college course) I remember seeing something along the lines of an "AU penalty." i am an AU on my wife's Bloomies and Nordstrom cards. One is 40 years old, the other 30, so it's really helping in the AAoA area. But, if I understand correctly, I should keep a small balance in {here's the question - one or both of the AU accounts}? If in both, that would make me AZe3, too many? Could I get away with a balance in just one of the two? Do I need to do this at all? Thanks

The penalty talked about is that one of your own accounts must report a slight balance. If only an AU (1 or more) reports a balance, and none of your own revolvers do, you will take that (usually) 20-point hit until one of your own revolvers reports something.

Re: AU Penalty if no balance on 2 AU accts?

Remedios — Wed, 10 Mar 2021 15:46:54 GMT

There is a penalty on EX and TU, but not on EQ if all AU accounts report $0.00

That's applicable to Fico 8 and 9.

Older scoring models do not impose such penalty.

Re: AU Penalty if no balance on 2 AU accts?

W261w261 — Wed, 10 Mar 2021 17:17:07 GMT

So it seems best to have one revolver and one AU carry that small balance. Thank you. I love this place

Re: AU Penalty if no balance on 2 AU accts?

Anonymous — Sat, 13 Mar 2021 05:57:08 GMT

@W261w261 wrote:
So it seems best to have one revolver and one AU carry that small balance. Thank you. I love this place

@W261w261 it actually depends on which score you're trying to maximize. It's also complicated by the fact that you're authorized user accounts for retail cards.

for best results you only want one primary bankcard reporting a balance for the mortgage Scores.

For 8/9 if you have counting authorized user accounts, you want one primary bankcard with a small balance and 1AU bankcard with a small balance.

The fact that you're authorized user accounts are limited to retail cards presents a complication. You would have to test both scenarios to see which is better and it would be great if you could report back the data points.