topic Re: An Account Shows a Balance Increase? $12? in Understanding FICO® Scoring

An Account Shows a Balance Increase? $12?

Jazzzy — Mon, 07 Sep 2009 15:31:11 GMT

OK...still new to the FICO micromanagement game...so....this is my next question:

Husband and I both received ScoreWatch alerts. Both said "An account shows a balance increase." I got dinged 1 point. Husband got dinged 11 points.

Have a Sears Citi card we barely use. Finally started to use it periodically to show use. Always PIF before statement cuts. It hadn't shown a statement balance since May, and I read that you can get FICO penalized for letting an account sit dormant too long and then using it. Decided I'd better let it show a balance...$12.

Now we get dinged for showing a balance increase on an account. Is this the same ding as the one for using a dormant account? Is that what we just did in FICO's eyes?

OK...so...how often do we need to let a balance show in order to not get dinged. Does this happen every time the prior month's balance was zero?

Any advice appreciated...

Re: An Account Shows a Balance Increase? $12?

Anonymous — Mon, 07 Sep 2009 15:49:41 GMT

Hi Lynette,

If one uses their card and then PIF before the statement date such that the statement reports a zero balance this should be sufficient to be counted as usage to the FICO scoring model. I do exactly this every month with 7 CCs and have not had a score alert indicating a ding for "dormant"card activity. I do allow one card to show a small balance (always the same card) to avoid the other ScoreWatch ding for increased CC account balance.YMMV

ETA: I am by no means a FICO expert but this works for me.

Message Edited by plasticman on 09-07-2009 08:49 AM

Re: An Account Shows a Balance Increase? $12?

Jazzzy — Mon, 07 Sep 2009 16:05:20 GMT

@Anonymous wrote:
Hi Lynette,

If one uses their card and then PIF before the statement date such that the statement reports a zero balance this should be sufficient to be counted as usage to the FICO scoring model. I do exactly this every month with 7 CCs and have not had a score alert indicating a ding for "dormant"card activity. I do allow one card to show a small balance (always the same card) to avoid the other ScoreWatch ding for increased CC account balance.YMMV

ETA: I am by no means a FICO expert but this works for me.

Hi...with a name like plasticman...you must be the expert! Just kidding...

I had thought about the possibility of letting the same card show the small balance each month. I think that may be the answer.

The only reason we used the card at all is to show usage to the cc company. Don't want them taking it away because we don't use it. Our ding was for "account showing a balance increase." They didn't use the verbage "dormant account," but I wondered if this was in reality the same thing.

Thanks plasticman.

Re: An Account Shows a Balance Increase? $12?

Anonymous — Mon, 07 Sep 2009 16:34:04 GMT

Either alert would have applied to your Sears CC. ScoreWatch picked one.

Re: An Account Shows a Balance Increase? $12?

pattycake — Mon, 07 Sep 2009 17:00:14 GMT

Could it be you were rebucketed? I showed balance increases of $200 and my FICO only dropped 2 points, then it shot up 34. Go figure.

Re: An Account Shows a Balance Increase? $12?

Anonymous — Mon, 07 Sep 2009 17:10:33 GMT

@pattycake wrote:
Could it be you were rebucketed? I showed balance increases of $200 and my FICO only dropped 2 points, then it shot up 34. Go figure.

If one only knew exactly what the different 'buckets" are. The FICO gods can be fickle!

Re: An Account Shows a Balance Increase? $12?

Macroman — Wed, 09 Sep 2009 02:59:22 GMT

Are you certain that the balance increase is the only difference. I think it's unlikely that a $12 balance would re-bucket you but having a change in account age or an old account drop off will. Also a baddie drops off this could rebucket.

You have not told us about other accounts, do you have other accounts and other accounts with balances. One ding is for having over 50% of revolving accounts report balances. If this were your only revolving account or you have one other you would get that ding.

Re: An Account Shows a Balance Increase? $12?

Anonymous — Wed, 09 Sep 2009 19:41:05 GMT

LynetteM wrote:
plasticman wrote:
Hi Lynette,

If one uses their card and then PIF before the statement date such that the statement reports a zero balance this should be sufficient to be counted as usage to the FICO scoring model. I do exactly this every month with 7 CCs and have not had a score alert indicating a ding for "dormant"card activity. I do allow one card to show a small balance (always the same card) to avoid the other ScoreWatch ding for increased CC account balance.YMMV

ETA: I am by no means a FICO expert but this works for me.
Hi...with a name like plasticman...you must be the expert! Just kidding...

I had thought about the possibility of letting the same card show the small balance each month. I think that may be the answer.

The only reason we used the card at all is to show usage to the cc company. Don't want them taking it away because we don't use it. Our ding was for "account showing a balance increase." They didn't use the verbage "dormant account," but I wondered if this was in reality the same thing.

Thanks plasticman.

The term "dormant account" was not used because the account was not dormant. In order for an account to be considered dormant the TL must be unreported for at least six months. If you use the account once every three months to avoid AA by the issuer and the TL is reported you will never have a dormant account! Once an open TL becomes dormant it is removed from the scoring calculation. Therefore the CL on a dormant CC cannot help you with your UTIL.

You also were not "dinged" for the account showing a balance increase. The balance increase triggered a SW alert (due to your settings). Your score was recalculated as a result of the alert and then presented to you. If you look very carefully at the alert it states that the reason proffered is may not actually be the reason why your score changed. SW alerts and the reason suggested within them frequently do not relate.

Re: An Account Shows a Balance Increase? $12?

Anonymous — Wed, 09 Sep 2009 21:48:13 GMT

CWCID,

The ScoreWatch reasons and alerts can obviously be very confusing, or I am just very confused. Thank you for doing your best to clarify these alerts and what they are most likely referring to!

Message Edited by plasticman on 09-09-2009 02:48 PM

Re: An Account Shows a Balance Increase? $12?

Anonymous — Wed, 09 Sep 2009 22:26:13 GMT

plasticman wrote:
CWCID,

The ScoreWatch reasons and alerts can obviously be very confusing, or I am just very confused. Thank you for doing your best to clarify these alerts and what they are most likely referring to!

They are a conundrum wrapped in an enigma. I just try to set my options really tight so I get any alerts at all. I would much rather SW send me an alert and score once in a while with a potentially bogus reason than absolutely nothing at all! The reasons are frequently nonsense.

Re: An Account Shows a Balance Increase? $12?

Anonymous — Wed, 09 Sep 2009 22:37:51 GMT

@Anonymous wrote:
plasticman wrote:
CWCID,

The ScoreWatch reasons and alerts can obviously be very confusing, or I am just very confused. Thank you for doing your best to clarify these alerts and what they are most likely referring to!
They are a conundrum wrapped in an enigma. I just try to set my options really tight so I get any alerts at all. I would much rather SW send me an alert and score once in a while with a potentially bogus reason than absolutely nothing at all! The reasons are frequently nonsense.

LOL

Re: An Account Shows a Balance Increase? $12?

Jazzzy — Thu, 10 Sep 2009 14:51:23 GMT

@Anonymous wrote:

The term "dormant account" was not used because the account was not dormant. In order for an account to be considered dormant the TL must be unreported for at least six months. If you use the account once every three months to avoid AA by the issuer and the TL is reported you will never have a dormant account! Once an open TL becomes dormant it is removed from the scoring calculation. Therefore the CL on a dormant CC cannot help you with your UTIL.

You also were not "dinged" for the account showing a balance increase. The balance increase triggered a SW alert (due to your settings). Your score was recalculated as a result of the alert and then presented to you. If you look very carefully at the alert it states that the reason proffered is may not actually be the reason why your score changed. SW alerts and the reason suggested within them frequently do not relate.

I've often wondered about how accurate the "reasons" were for the alerts. One time my score went up about 15 points...and the alert said it may have been because I had an inquiry. Well...no. I should not have tried to read too much into this "account with an increased balance" thing...

That said...do you try to have the same cc show the small balance every month, or do you rotate which one shows the balance?

Re: An Account Shows a Balance Increase? $12?

Anonymous — Thu, 10 Sep 2009 15:15:29 GMT

@LynetteM wrote:
@Anonymous wrote:

The term "dormant account" was not used because the account was not dormant. In order for an account to be considered dormant the TL must be unreported for at least six months. If you use the account once every three months to avoid AA by the issuer and the TL is reported you will never have a dormant account! Once an open TL becomes dormant it is removed from the scoring calculation. Therefore the CL on a dormant CC cannot help you with your UTIL.

You also were not "dinged" for the account showing a balance increase. The balance increase triggered a SW alert (due to your settings). Your score was recalculated as a result of the alert and then presented to you. If you look very carefully at the alert it states that the reason proffered is may not actually be the reason why your score changed. SW alerts and the reason suggested within them frequently do not relate.
I've often wondered about how accurate the "reasons" were for the alerts. One time my score went up about 15 points...and the alert said it may have been because I had an inquiry. Well...no. I should not have tried to read too much into this "account with an increased balance" thing...

That said...do you try to have the same cc show the small balance every month, or do you rotate which one shows the balance?

I have nine CC's. Three report a balance every month (2 BT's (PenFed #2 and Citi) and one legacy balance on a closed card I slowly pay down to keep an old account vital (Chase #2)). The fourth, PenFed #1, is my main card and is always PIF. The rest (Discover, Chase #1, Direct Merchants Bank, Macy's store and Macy's Visa) are rotated and PIF to keep them warm. With all that my reporting UTIL is 8% or so.

Re: An Account Shows a Balance Increase? $12?

haulingthescoreup — Sat, 12 Sep 2009 00:38:02 GMT

I have gotten dinged for having an account report a balance after X number of months, even though the card was being used, but PIF'd before reporting. (I think it had gone for 4-5 months without reporting a balance.)

The using a card at least every six months is to keep the CCC happy. The balance reporting is a different animal.

Maddening, isn't it?

Re: An Account Shows a Balance Increase? $12?

Anonymous — Sat, 12 Sep 2009 00:41:06 GMT

Every credit card deserves a trip to Blockbuster once a quarter. It's the humane thing to do!

Re: An Account Shows a Balance Increase? $12?

marty56 — Sat, 12 Sep 2009 12:21:02 GMT

@Anonymous wrote:
Every credit card deserves a trip to Blockbuster once a quarter. It's the humane thing to do!

Or Best Buy or the Perth Mint.