topic Re: 48.9%, 28.9%, 8.9% UTIL in Understanding FICO® Scoring

48.9%, 28.9%, 8.9% UTIL

W261w261 — Thu, 20 Jan 2022 16:44:59 GMT

I assume these numbers were developed empirically, not taken from something published by FICO. My question is: when UTIL slides past one of these benchmarks, I infer that there is a disproportionate effect on, what, score?, or on some other metric? An extreme example would be a 2% drop in UTIL. If it occurred between 34%>32%, I doubt it would be notable, but what if it was from 9.9%>7.9%? In other words, I'm curious about these benchmarks and how important they really are. Thx

Re: 48.9%, 28.9%, 8.9% UTIL

chiefone4u — Thu, 20 Jan 2022 17:04:37 GMT

@W261w261 wrote:
I assume these numbers were developed empirically, not taken from something published by FICO. My question is: when UTIL slides past one of these benchmarks, I infer that there is a disproportionate effect on, what, score?, or on some other metric? An extreme example would be a 2% drop in UTIL. If it occurred between 34%>32%, I doubt it would be notable, but what if it was from 9.9%>7.9%? In other words, I'm curious about these benchmarks and how important they really are. Thx

In my personal experience, a 2% drop from 34% to 32% resulted in zero score change.

While a change from 9.1% to 8.8% resulted in a 15 point score increase on FICO 8; 10 points on Fico9 and 5 points on Fico 2 (the only scores I had access to on the same day with same information).

Re: 48.9%, 28.9%, 8.9% UTIL

W261w261 — Thu, 20 Jan 2022 18:59:32 GMT

Interesting, thx

Re: 48.9%, 28.9%, 8.9% UTIL

SouthJamaica — Fri, 21 Jan 2022 01:05:00 GMT

@W261w261 wrote:
I assume these numbers were developed empirically, not taken from something published by FICO. My question is: when UTIL slides past one of these benchmarks, I infer that there is a disproportionate effect on, what, score?, or on some other metric? An extreme example would be a 2% drop in UTIL. If it occurred between 34%>32%, I doubt it would be notable, but what if it was from 9.9%>7.9%? In other words, I'm curious about these benchmarks and how important they really are. Thx

1. IMHO there are 2 highly verifiable benchmarks in individual revolving account utilization based on my personal experience: 50% and 30%. The numbers 48.9% and 28.9% come about because it is imperative to be below, rather than at, the benchmark percentage, so these safely avoid being rounded up.

2. IMHO there are no other highly verifiable benchmarks in individual utilization, and there are no benchmarks at all in aggregate utilization.

There are many here who will disagree with me on the above, but this is my opinion. You will see a lot of claims of "collective wisdom" listing a large number of different percentage thresholds, and it would be comforting to think that there are such clearly demarcated stepping stones, but in my view they do not exist.

Re: 48.9%, 28.9%, 8.9% UTIL

NYC_Fella — Sun, 23 Jan 2022 00:34:17 GMT

@SouthJamaica wrote:

2. IMHO there are no other highly verifiable benchmarks in individual utilization, and there are no benchmarks at all in aggregate utilization.

There are many here who will disagree with me on the above, but this is my opinion. You will see a lot of claims of "collective wisdom" listing a large number of different percentage thresholds, and it would be comforting to think that there are such clearly demarcated stepping stones, but in my view they do not exist.

I will disagree with you somewhat based on my own recent experience. I usually keep my overall utilization at about 3%-4% and I don't pay much attention to individual account utilization. Twice, when my overall utilization went to 6%-7% temporarily, my EX 08 dropped 3 points and came back up to normal when I got back below 5%. Just my personal DP, and other factors may be at play.

Re: 48.9%, 28.9%, 8.9% UTIL

SouthJamaica — Sun, 23 Jan 2022 02:21:48 GMT

@NYC_Fella wrote:
@SouthJamaica wrote:

2. IMHO there are no other highly verifiable benchmarks in individual utilization, and there are no benchmarks at all in aggregate utilization.

There are many here who will disagree with me on the above, but this is my opinion. You will see a lot of claims of "collective wisdom" listing a large number of different percentage thresholds, and it would be comforting to think that there are such clearly demarcated stepping stones, but in my view they do not exist.
I will disagree with you somewhat based on my own recent experience. I usually keep my overall utilization at about 3%-4% and I don't pay much attention to individual account utilization. Twice, when my overall utilization went to 6%-7% temporarily, my EX 08 dropped 3 points and came back up to normal when I got back below 5%. Just my personal DP, and other factors may be at play.

I have no doubt that the higher one's aggregate utilization, the lower one's scores. My experience and your experience certainly bear that out. In my case I can say that between 3% and 33% there lie about 100 FICO 8 points for my profile.

But a "threshold" or "benchmark" means to me something other than gradual change. I.e. a serious bump or dip when hitting above or below a certain percentage. To me, gaining or losing 3 points is by my definition not a serious bump or dip. It's just gradual change.

Re: 48.9%, 28.9%, 8.9% UTIL

NYC_Fella — Sun, 23 Jan 2022 02:24:03 GMT

@SouthJamaica wrote:
But a "threshold" or "benchmark" means to me something other than gradual change. I.e. a serious bump or dip when hitting above or below a certain percentage. To me, gaining or losing 3 points is by my definition not a serious bump or dip. It's just gradual change.

Excellent point.

Re: 48.9%, 28.9%, 8.9% UTIL

mgood — Sun, 23 Jan 2022 17:47:14 GMT

@SouthJamaica wrote:
1. IMHO there are 2 highly verifiable benchmarks in individual revolving account utilization based on my personal experience: 50% and 30%. The numbers 48.9% and 28.9% come about because it is imperative to be below, rather than at, the benchmark percentage, so these safely avoid being rounded up.

2. IMHO there are no other highly verifiable benchmarks in individual utilization, and there are no benchmarks at all in aggregate utilization.

There are many here who will disagree with me on the above, but this is my opinion. You will see a lot of claims of "collective wisdom" listing a large number of different percentage thresholds, and it would be comforting to think that there are such clearly demarcated stepping stones, but in my view they do not exist.

I am so glad to see someone post that so succinctly. I've read a lot of theories and formed some of my own. I have not done the in-depth research to argue with some of the numbers crunchers around here, but what you posted most closely aligns with what I have suspected. I've thought (because I read somewhere) that there were benchmarks at 70, 50, 30, and 10. But I wasn't sure if that meant individual or aggregate or both. I have long believed that the 28.9 stuff that is frequently repeated here was not entirely accurate, that they round to whole percentage points and you want it below 10 or 30 or whatever. So if it's 29.4999999999999999 or less, theoretically that should round to 29%. But shooting for 28.9 just to give yourself a cushion is probably not a bad idea, so I never posted that argument. And my own anecdotal evidence from observing my own score changes in relation to my utilization seems to agree with what you say about there being a lot less benchmark points than many believe.

Re: 48.9%, 28.9%, 8.9% UTIL

Phana24 — Sun, 23 Jan 2022 22:23:30 GMT

@SouthJamaica wrote:
@W261w261 wrote:
I assume these numbers were developed empirically, not taken from something published by FICO. My question is: when UTIL slides past one of these benchmarks, I infer that there is a disproportionate effect on, what, score?, or on some other metric? An extreme example would be a 2% drop in UTIL. If it occurred between 34%>32%, I doubt it would be notable, but what if it was from 9.9%>7.9%? In other words, I'm curious about these benchmarks and how important they really are. Thx
1. IMHO there are 2 highly verifiable benchmarks in individual revolving account utilization based on my personal experience: 50% and 30%. The numbers 48.9% and 28.9% come about because it is imperative to be below, rather than at, the benchmark percentage, so these safely avoid being rounded up.

2. IMHO there are no other highly verifiable benchmarks in individual utilization, and there are no benchmarks at all in aggregate utilization.

There are many here who will disagree with me on the above, but this is my opinion. You will see a lot of claims of "collective wisdom" listing a large number of different percentage thresholds, and it would be comforting to think that there are such clearly demarcated stepping stones, but in my view they do not exist.

This has been my experience as well. Based on a more educated observation as I've taken my wife through the process is that the 28.8%(i.e.30%) mark on all cards is the biggest mover(s), but that's only one observation. As others have noted, there are "bonus" points for getting down in the 1-2% range with AZEO.

Re: 48.9%, 28.9%, 8.9% UTIL

W261w261 — Sun, 30 Jan 2022 02:33:41 GMT

If Synch can trouble itself to report my Lowe's payment (9 days since due date now) before the 1st, I'll have an opportunity to see the scoring effect of 10% dropping to 3%. If they don't get it in, then I have an unexpected reprieve from my AZE2 (includes balance on 1 AU Acct) mess-up, in which I didn't know that a charge card cannot be part of AZEO. If it comes to it, the Lowe's balance can substitute for the Amex there.

So, come the 1st, my score is either going beyond its present 732 because my UTIL will be 10->3%, or it will advance because of AZEO. I had hoped for both, maybe daresay approaching 750, but that is not to be.

There's always next month, but it'll be a bit more complicated by then, albeit in a positive way. I paid off a Cap1 CO on 2/21/21, so that will be 12 mos old, not sure if that's significant or not. And one inquiry will be 12 mos old then. I had hoped, in the absence of these other variables, to have a cleaner look at the scoring effect of one payment taking my score into AZEO land, with only the AZEO bonus and the UTIL drop to 3%, but alas, not to be.

Re: 48.9%, 28.9%, 8.9% UTIL

expatCanuck — Sun, 30 Jan 2022 16:34:05 GMT

Of course, for FICO 8, AZEO is really OIT, right?

AZEO really only matters for the mortgage scores.( OIT = One in Three)

AZEO really only matters for the mortgage scores.

And FWIW, I've found that over 9% and under 9% does make a difference -- but only 3 points or so on a clean scorecard. INQs and new accounts are more impactful.

Re: 48.9%, 28.9%, 8.9% UTIL

LawStudentCivilis — Sun, 30 Jan 2022 16:43:01 GMT

I wanted to chime in to say in regard to individual utilization the benchmarch is moreso below 49.4, 29.4, etc. There was a Q&A thread here from the FICO reps (forgive my ignorance as to their appropriate titles), and they heavily implied these are the thresholds to follow. Not the previously held belief of 48.9, 28.9, etc. I see it never really caught hold as we continue to state otherwise. From personal experience when I tackled my debt on a clean score card, I followed the 49.4, 29.4 and so on and this is where I had significant point gain.