topic Experian FICO 2 dropped in Understanding FICO® Scoring

Experian FICO 2 dropped

KizzieB — Thu, 09 May 2024 02:47:54 GMT

I experienced a 19 point drop from 779 to 760 when I paid down a card (util from 51 to 42%) and my limit increased by $3K all in one cycle. Is there something I can do to get it back up? Applying for a mortgage at the end of May so I only have one billing cycle to correct course. Side note... my Equifax increased from 747 to 755 with the same activity reported. Any info is helpful. TIA.

Re: Experian FICO 2 dropped

TheKid2 — Thu, 09 May 2024 03:03:20 GMT

Welcome to the boards.

There are so many factors, you'd have to share a lot more details in order to get some specific guidance. Assuming you don't have any derogs, the older score models hate utilization. Go for AZEO to maximize your mortgage scores, one small balance on a bank card and pay off the rest of your revolvers. If you can't do that then there are util breakpoints along the way to get more points.

Re: Experian FICO 2 dropped

KizzieB — Thu, 09 May 2024 03:19:47 GMT

Thanks for responding. I do have one late payment on auto loan from 2019 that I was paid in full in 2021. It's my only neg activity. Otherwise from a CC perspective I have about 15 open card. 2 have balances. First card in question has limit of $16,900 with $7110 balance. Second card has limit of $7900 with balance $2501. In May I'll pay down the balance on the second card to around $2000 so I can decrease util to under 28%.

Long term goal is to have one card with util under 5%. New to watching my score so closely but learning something new each month as I work toward the goal of purchasing a new home. Love the comments/feedback across the boards. thx!

@TheKid2 wrote:
Welcome to the boards.

There are so many factors, you'd have to share a lot more details in order to get some specific guidance. Assuming you don't have any derogs, the older score models hate utilization. Go for AZEO to maximize your mortgage scores, one small balance on a bank card and pay off the rest of your revolvers. If you can't do that then there are util breakpoints along the way to get more points.

Re: Experian FICO 2 dropped

Thomas_Thumb — Thu, 09 May 2024 03:57:57 GMT

Reducing utilization does not drop score. Fico is crystal clear on that. At this point, with the limited info provided, there is no way of knowing what dropped that specific CRA's score.

As mentioned above there are utilization breakpoints. Getting your highest card utilization under 49% helps score. Getting highest card utilization under 29% helps further.

Fico mortgage scores are rather sensitive to number of accounts reporting balances. We don't know how many cards you have or what type they are (store cards, charge cards and bank cards).

Having zero revolving credit cards reporting a balance hurts score a lot - often 15-25 points. Having 1 report a balance is ideal. Having 2 report is much better than 0. Score drop for 2 reporting is usually 0-5 points depending on the file details. Given all your cards, AZE1 to AZE3 would likely score the same if utilizations were low on all of them.

It would boost your score significantly if you can pay down both cards to just under 29%. Highest balance card to $4900 and the other card to $2280.

Re: Experian FICO 2 dropped

KizzieB — Thu, 09 May 2024 03:30:44 GMT

Thanks for the response. Just curious.. what's impact of store vs charge vs bank card?

Re: Experian FICO 2 dropped

SouthJamaica — Thu, 09 May 2024 03:39:44 GMT

@KizzieB wrote:
I experienced a 19 point drop from 779 to 760 when I paid down a card (util from 51 to 42%) and my limit increased by $3K all in one cycle. Is there something I can do to get it back up? Applying for a mortgage at the end of May so I only have one billing cycle to correct course. Side note... my Equifax increased from 747 to 755 with the same activity reported. Any info is helpful. TIA.

Neither the paying down of the card from 51% to 42%, nor the credit limit increase, caused any score drop in your EX FICO 2. You need to investigate further if you want to know why the score dropped 19 points.

Re: Experian FICO 2 dropped

SouthJamaica — Thu, 09 May 2024 03:42:25 GMT

@KizzieB wrote:
Thanks for the response. Just curious.. what's impact of store vs charge vs bank card?

No difference in store vs bank card in utilization percentages.

Charge cards are totally ignored in utilization calculation.

Re: Experian FICO 2 dropped

Thomas_Thumb — Thu, 09 May 2024 04:05:14 GMT

@KizzieB wrote:
Thanks for the response. Just curious.. what's impact of store vs charge vs bank card?

Fico has a penalty for "no recent revolving account activity". If a card reports zero balance it is considered not recently active. If none of your revolving accounts show activity then the penalty is assessed.

Charge cards like AMEX green/gold/platinum and many store that are not cobranded Visa/Mastercard are NOT counted toward revolving activity. Thus, when practicing AZE1 the card reporting a balance should be a bank card which also includes Discover card and AMEX blue cash everyday and preferred.

Store card balances and credit limits DO count as part of the aggregate utilization calculation. Charge cards do not count.

Re: Experian FICO 2 dropped

SouthJamaica — Thu, 09 May 2024 17:59:20 GMT

@Thomas_Thumb wrote:
@KizzieB wrote:
Thanks for the response. Just curious.. what's impact of store vs charge vs bank card?
Fico has a penalty for "no recent revolving account activity". If a card reports zero balance it is considered not recently active. If none of your revolving accounts show activity then the penalty is assessed.

Charge cards like AMEX green/gold/platinum and many store that are not cobranded Visa/Mastercard are NOT counted toward revolving activity. Thus, when practicing AZE1 the card reporting a balance should be a bank card which also includes Discover card and AMEX blue cash everyday and preferred.

Store card balances and credit limits DO count as part of the aggregate utilization calculation. Charge cards do not count.

It just occurred to me @Thomas_Thumb , is EX 2 the one that is an exception to the rule that charge cards don't count?

Re: Experian FICO 2 dropped

Thomas_Thumb — Fri, 10 May 2024 00:36:42 GMT

EX score 2 does calculate a psuedo utilization for no preset spending limit (npsl) AMEX charge card. Utilization is calculated based on current balance/high balance. I saw a couple score drops on EX score 2 when CB/HB was 100% - no associated change on EX score 3, TU score 4 or EQ score 5.

I suspect AMEX is not in the aggregate calc because the card is classified as an open account with 1 month terms. My other cards are classified as revolving accounts.

I need to re-visit some old 3B reports specific to EX score 2 and aggregate UT. Unfortunately, the front end 3B data summaries appear to be based on Fico 8 so I can't use that to tease out AMEX contribution (or lack of) for EX score 2.

Charges on my AMEX card are relatively low. So, whether or not it is counted in aggregate wouldn't impact AG UT enough to shift reason codes.

I did get a "no recent revolving activity penalty" when only my AU and AMEX cards reported balances. The penalty dropped my F8 and F9 scores. No reason code or impact on any of the older Ficos. The AU card is included on all the older Ficos. So, I can't isolate the AMEX.

Best case would be for someone with clean file, an AMEX charge card and no AU cards to test. Allow the AMEX to report a balance with all others at $0. If all Fico versions list the "no recent activity penalty" AMEX does not count as a revolver and would not be included in aggregate utilization. If the penalty does not show on EX score 2 but shows on all others, then Fico 98 is counting it as a revolver.

Side note: An AMEX charge card is a credit card with 1 month terms. Thus, there can be an individual credit card utilization impact even if it is excluded in aggregate revolving account utilization.

Re: Experian FICO 2 dropped

SouthJamaica — Fri, 10 May 2024 04:22:42 GMT

@Thomas_Thumb wrote:
EX score 2 does calculate a psuedo utilization for no preset spending limit (npsl) AMEX charge card. Utilization is calculated based on current balance/high balance. I saw a couple score drops on EX score 2 when CB/HB was 100% - no associated change on EX score 3, TU score 4 or EQ score 5.

I suspect AMEX is not in the aggregate calc because the card is classified as an open account with 1 month terms. My other cards are classified as revolving accounts.

I need to re-visit some old 3B reports specific to EX score 2 and aggregate UT. Unfortunately, the front end 3B data summaries appear to be based on Fico 8 so I can't use that to tease out AMEX contribution (or lack of) for EX score 2.

Charges on my AMEX card are relatively low. So, whether or not it is counted in aggregate wouldn't impact AG UT enough to shift reason codes.

I did get a "no recent revolving activity penalty" when only my AU and AMEX cards reported balances. The penalty dropped my F8 and F9 scores. No reason code or impact on any of the older Ficos. The AU card is included on all the older Ficos. So, I can't isolate the AMEX.

Best case would be for someone with clean file, an AMEX charge card and no AU cards to test. Allow the AMEX to report a balance with all others at $0. If all Fico versions list the "no recent activity penalty" AMEX does not count as a revolver and would not be included in aggregate utilization. If the penalty does not show on EX score 2 but shows on all others, then Fico 98 is counting it as a revolver.

Side note: An AMEX charge card is a credit card with 1 month terms. Thus, there can be an individual credit card utilization impact even if it is excluded in aggregate revolving account utilization.

You can get the EX FICO 2 negative reason codes from old 3B MyFICO reports.

Open report > Scores > Mortgages > View Analysis (Under EX FICO 2), Scroll down to Factors.

If you want to compare EX to EQ and TU click "Compare"

Re: Experian FICO 2 dropped

Thomas_Thumb — Fri, 10 May 2024 14:58:10 GMT

I think you need an active paid service to do that. I don't have one. I saved my reports as PDFs on a hard drive. The reports list reason codes.

Last payment I made to Fico for a product was 2020. Thus, no Fico 10/10T scores for me.

Below is a link to an old thread describing my "no recent revolving accounts" penalty on Fico 8, Fico 9 although I had a BoA AU card and AMEX charge with balances. The 3B report shows Auto EX score 2 listing "no recent balances on your revolving credit accounts" reason code although I had a $1997 balance on my AMEX. Furthermore it lists "you've made heavy use of your available revolving credit".

https://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/AG-UT-at-0-0-with-2-Cards-Reporting-Fico-Score-Implications/td-p/4706983#

The explanation for the apparent contradictory statements is:

1. The AMEX charge card was looked at on an individual card basis. The charge of $1997 was not all that high but it represented 100% card psuedo utilization due to current balance being the high balance up to that point. So 100% UT => Heavy use.

2. The AMEX charge card is not considered a revolving ACCOUNT. Furthermore, the BoA AU card $576 balance was not included as a revolving account. The revolving accounts considered by Fico all had $0 balances => no recent balances on revolving accounts.

The 0% aggregate utilization in the summary clearly indicates Fico 8 is not including the AU balance or AMEX balance in its calculation. We know NPSL charge cards are ignored in the aggregate UT calculation for EQ Fico score 5 and TU Fico score 4. I believe that's true for EX score 3 and EX Fico score 2 as well because, the account is classified as open NOT revolving.

The main question left unanswered is whether or not AU revolving accounts are included in aggregate UT calculations on the older Fico models. Data from other reports/posts indicates Fico 04 models include them but Fico 98 may not.

Re: Experian FICO 2 dropped

KizzieB — Fri, 10 May 2024 11:39:05 GMT

@Thomas_Thumb @SouthJamaica Very astute. When I looked into my EX 2 score analysis data from my current 3B (760 score), it lists "Short Revolving History". This is a new factor listed for me from my previous 3B (779 score). My EX AAoA is 8 yrs 8 mos so in my mind, the history isn't a factor but learning that logic doesn't always play out in the FICO algorithms. Still don't quite understand what this all means but I def agree with your previous feedback that outside of the payment and credit line increase, something else played a factor in dropping my score. Fascinating stuff. Thanks to you both for the different perspectives. I'll continue to monitor and dig deeper.

Re: Experian FICO 2 dropped

SouthJamaica — Fri, 10 May 2024 13:58:59 GMT

@KizzieB wrote:
@Thomas_Thumb @SouthJamaica Very astute. When I looked into my EX 2 score analysis data from my current 3B (760 score), it lists "Short Revolving History". This is a new factor listed for me from my previous 3B (779 score). My EX AAoA is 8 yrs 8 mos so in my mind, the history isn't a factor but learning that logic doesn't always play out in the FICO algorithms. Still don't quite understand what this all means but I def agree with your previous feedback that outside of the payment and credit line increase, something else played a factor in dropping my score. Fascinating stuff. Thanks to you both for the different perspectives. I'll continue to monitor and dig deeper.

The fact that something suddenly appears in your list of negative reason codes doesn't necessarily mean that it's a new issue. It is more likely that it has just moved up in the hierarchy of reason codes, due to the demotion of the code that was removed. The list which is shown in the graphic interface isn't the whole list, it's just the tip of the iceberg.