topic Re: Score Only Increases When Balances Increase! in Understanding FICO® Scoring

Score Only Increases When Balances Increase!

adamseve — Sat, 03 Oct 2009 17:53:58 GMT

I've noticed that my scores never increase unless my balances increase. I always PIF before the statement closes on all cards except 2-3 cards. However, that never increased my score. It would remain level.

I also noticed that my scores stayed the same even with the addition of more available credit that decreased my utilization. I'd always lose 5-7 points from the inquiry & new account, but even after a few months my score would remain the same.

I understand about buckets, etc., but none of this makes sense from my personal understanding of the best ways to increase one's score.

Any ideas on why this is happening?

Message Edited by adamseve on 10-03-2009 10:53 AM

Re: Score Only Increases When Balances Increase!

Anonymous — Sat, 03 Oct 2009 16:33:59 GMT

Utilization management is the easiest and fastest way for a consumer to exert a positive influence on their FICO scores (all other things remaining equal). If you decrease your UTIL % and all other things remain equal your FICO score must either stay the same or increase. If you increase your UTIL % and all other things remain equal your FICO score must either stay the same or decrease. If you observe different behavior then all other things have not remained equal. The answer lies in your CBR's. For valid comparison the scores must be FICO's derived from the same CRB's credit report.

Re: Score Only Increases When Balances Increase!

adamseve — Sat, 03 Oct 2009 18:05:16 GMT

So, if I understand you, this is what I got from your comment:

1. Since the only thing that changed on my reports is either the amount of available credit, decreased utilization, or increased utilization my scores are going to stay the same. Correct?

My only baddie is a BK7 filed in '04 and discharged in '06. No other baddies. I've played with my utilizatiion to see if anything changes even if I let it get close to 30% and as low as 5%...Little to no change. What can I do to increase my score other than AGE?

I've seen other people's scores be sometimes 25-75 points higher than mine who have way more baddies and similar AAofA, available credit, & utilization. How can this be? It's very depressing to work so darn hard after a BK and see that I'm still no where near where others are who's credit is much more marred than my own.

I also noticed that my score was much lower than my Caucasian counterparts whose reports were riddled with recent lates, collections, repos, dismissed BKs, lots of IIB with balances, etc. Again...I tried to compare apples to apples when I looked at their reports. How can this be? I've heard of the theory that certain races receive lower scores than others even when comparing apples to apples. I may have proved this theory with my research.

Has anyone else noticed a correlation in race and score when comparing apples to apples?

Re: Score Only Increases When Balances Increase!

Anonymous — Sat, 03 Oct 2009 19:55:52 GMT

May I ask where you get your scores and what are those scores? No one has been able to pull their own Experian score since mid-February. Creditors can pull Experian and also there is a CU in Pennsylvania that supplies that information to it's members only. You can only buy true FICO scores at a few places. One place is here at myfico. I suggest you do an internet search for "myfico discount codes" to save a little money. You can also purchase your Equifax score at www.equifax.com and your Transunion score at www.transunioncs.com.

I suspect that you already know all this because of your many posts and I apologize if I'm being redundant.

I'll let others with much more experience dissect your concerns.

(myfico)
7/09 TU-742 EQ- 779
8/09 TU-765 EQ- 783
9/09 EX pulled by lender 802

CC interest free as of 8/09
Time can heal all wounds and a low FICO.
"Hello my name is Sandy and I'm a recovering crediholic".

Re: Score Only Increases When Balances Increase!

Anonymous — Sat, 03 Oct 2009 20:07:28 GMT

@adamseve wrote:
So, if I understand you, this is what I got from your comment:

1. Since the only thing that changed on my reports is either the amount of available credit, decreased utilization, or increased utilization my scores are going to stay the same. Correct?

My only baddie is a BK7 filed in '04 and discharged in '06. No other baddies. I've played with my utilizatiion to see if anything changes even if I let it get close to 30% and as low as 5%...Little to no change. What can I do to increase my score other than AGE?

I've seen other people's scores be sometimes 25-75 points higher than mine who have way more baddies and similar AAofA, available credit, & utilization. How can this be? It's very depressing to work so darn hard after a BK and see that I'm still no where near where others are who's credit is much more marred than my own.

I also noticed that my score was much lower than my Caucasian counterparts whose reports were riddled with recent lates, collections, repos, dismissed BKs, lots of IIB with balances, etc. Again...I tried to compare apples to apples when I looked at their reports. How can this be? I've heard of the theory that certain races receive lower scores than others even when comparing apples to apples. I may have proved this theory with my research.

Has anyone else noticed a correlation in race and score when comparing apples to apples?

This is not what I said. Rather than repeating myself please go back to my original post and reread it.

You might what to refer to the link below when considering this. Race is not a factor.

http://www.myfico.com/CreditEducation/WhatsNotInYourScore.aspx

Re: Score Only Increases When Balances Increase!

smallfry — Sat, 03 Oct 2009 20:15:37 GMT

OP since you have that BK present don't expect "normal" score changes. I have an older one myself and from what I have observed over the past 2 1/2 years it just doesn't work the same as for those with clean reports. Just keep your balances down and pay on time.

Re: Score Only Increases When Balances Increase!

Anonymous — Sat, 03 Oct 2009 20:43:10 GMT

I am in a dirty scoring bucket for EQ and EX FICO scoring (120-day late on one account, 60-day on another, 13 lates overall) and find my scoring still very responsive to UTIL changes. I do think that FICO score changes due to UTIL variation are more muted if you are in a negative scoring bucket, but they do change in the correct direction.

Re: Score Only Increases When Balances Increase!

smallfry — Sun, 04 Oct 2009 01:20:53 GMT

@Anonymous wrote:
I am in a dirty scoring bucket for EQ and EX FICO scoring (120-day late on one account, 60-day on another, 13 lates overall) and find my scoring still very responsive to UTIL changes. I do think that FICO score changes due to UTIL variation are more muted if you are in a negative scoring bucket, but they do change in the correct direction.

I wouldn't know my utilization hasn't changed in over 2 1/2 years.

Re: Score Only Increases When Balances Increase!

adamseve — Sun, 04 Oct 2009 03:34:16 GMT

creditwherecreditisdue,

The reason why I replied the way I did was to make sure I understood what you were saying. If you're not willing toclarify what you said why did you respond in the first place? I'm simply trying to understand what you submitted. As simple as it may seem to you it may not be that way for someone else.

And as much as you like to believe race is not a factor no one can truly attest to that because no one would admit to it anyway. How do you explain the difference in scores when comparing apples to apples? I even had an finance manager take a look at them for me because we were all floored as to WHY the difference. He couldn't explain it, but he did say that he'd seen it before.

And yes, I read that link as well as other online reports. Unfortunately, race is a factor in EVERYTHING in the US even if it's not supposed to be, i.e., FICO scores. Please note that this is MY OPINION, and just elbows & kneecaps we all have one!

Re: Score Only Increases When Balances Increase!

adamseve — Sun, 04 Oct 2009 03:37:59 GMT

@Anonymous wrote:
May I ask where you get your scores and what are those scores? No one has been able to pull their own Experian score since mid-February. Creditors can pull Experian and also there is a CU in Pennsylvania that supplies that information to it's members only. You can only buy true FICO scores at a few places. One place is here at myfico. I suggest you do an internet search for "myfico discount codes" to save a little money. You can also purchase your Equifax score at www.equifax.com and your Transunion score at www.transunioncs.com.

I suspect that you already know all this because of your many posts and I apologize if I'm being redundant.

I'll let others with much more experience dissect your concerns.

(myfico)
7/09 TU-742 EQ- 779
8/09 TU-765 EQ- 783
9/09 EX pulled by lender 802

CC interest free as of 8/09
Time can heal all wounds and a low FICO.
"Hello my name is Sandy and I'm a recovering crediholic".

I only pull my scores from myfico.com so I'm sure of my scores and that of those whose reports and scores we pulled to compare. Thanks for trying to help.

Re: Score Only Increases When Balances Increase!

Lel — Sun, 04 Oct 2009 04:33:47 GMT

adamseve wrote:

creditwherecreditisdue,

The reason why I replied the way I did was to make sure I understood what you were saying. If you're not willing toclarify what you said why did you respond in the first place? I'm simply trying to understand what you submitted. As simple as it may seem to you it may not be that way for someone else.

And as much as you like to believe race is not a factor no one can truly attest to that because no one would admit to it anyway. How do you explain the difference in scores when comparing apples to apples? I even had an finance manager take a look at them for me because we were all floored as to WHY the difference. He couldn't explain it, but he did say that he'd seen it before.

And yes, I read that link as well as other online reports. Unfortunately, race is a factor in EVERYTHING in the US even if it's not supposed to be, i.e., FICO scores. Please note that this is MY OPINION, and just elbows & kneecaps we all have one!

I'm sorry that you're having trouble getting a clear answer. Sometimes when people post here, it seems clear to the person making the comments, but it doesn't mean that is necessarily understandable to everyone else. Like I mentioned on another thread, at some point in our lives we all were relative neophytes in our understanding of the credit world.

I'll try and take the time to offer my interpretation of what CWCID posted. If anything I write here is not what CWCID intended, it is not because I am intentionally trying to distort his words. I am making an earnest attempt at expanding on what was written.

In your situation, you are trying to make sense of your score fluctuations based solely on utilization of available credit. However, based on what you have written, you cannot do this, because you are periodically adding new credit accounts. Having new credit accounts (and their associated inquiries) adds a confounding factor in trying to interpret how your utilization is affecting your score.

Instead, let's consider a hypothetical situation, in which the balance reported across all revolving accounts never changes. For example, say that you allow a balance of $1000 to report every month without variation. Let's also say that your original combined CL is $8000. Your utilization is 12.5%. This leads to a certain FICO score.

Then, one month you request and receive a credit line increase from one of your credit card companies. Your balance reporting is still $1000, but your credit limit is now $12,000. Your utilization is now 8.3%. No new credit accounts were opened to achieve this higher CL.

Assuming (as CWCID stressed) that absolutely nothing else changes on your credit report - no new accounts, no derogs appearing or falling off, no paid installment accounts falling off, for example - then this decreased utilization will lead to one of two outcomes: (1) your score may increase or (2) your score may stay the same.

Again, this is what will occur if nothing else has changed in your credit report. If your score went down despite a lower utilization, then something must be different in your credit report that is exerting negative pressure on your score. Keep in mind that with each month that passes, your credit profile does change: your oldest account, length of credit history, and average account age (assuming no new accounts) all increase by one month. But these all tend to be positive factors, unless, of course, you got rebucketed.

Consider the converse situation, in which you suffer a decrease in your credit limits resulting in an increased utilization. Assuming that absolutely nothing else changes on your credit report, then your increased utilization will result in one of two outcomes (1) your score may decrease or (2) your score may stay the same.

So, utilization does matter, but it can be hard to isolate the specific effect of changes in utilization. In your case, it may not be possible because of the new accounts added to your credit profile.

And race is definitely not factored in the FICO score. Your analogy of comparing "apples to apples" is not valid, because no two persons are going to have the exact same credit profile. If they're apples, then one would be Granny Smith and another might be Braeburn, and thus not directly comparable. Beyond that I cannot comment, because discussions of race are not permitted on the FICO fourms.

5 things we don't talk about

Re: Score Only Increases When Balances Increase!

haulingthescoreup — Sun, 04 Oct 2009 21:36:39 GMT

And I will just add that race is not reported on credit reports, so there is no way that it can be factored into a FICO score. FICO scores are generated solely from the data on each credit bureau's reports.

This is not to say that lending decisions might not be tainted by racial attitudes. If this happens, it is a violation of the ECOA (Equal Credit Opportunity Act,) which is a whole different issue.

Re: Score Only Increases When Balances Increase!

marty56 — Tue, 06 Oct 2009 02:02:53 GMT

For my profile, EQ likes to see a balance report and gives me 3 points if I do. TU doesnt want any CC to report so if you are trying to maximize your score, know which report they are going to pull and if it is both TU and EQ, do whats will give you the highest score among both.

IMHO 0% util always looks good on MR despite what FICO does.

Re: Score Only Increases When Balances Increase!

adamseve — Tue, 06 Oct 2009 05:11:18 GMT

Lel,

Thanks for the clarification. It helped a great deal.

It's so sad that people are still afraid to talk about the 5 things link. It's so easy for people to not talk about them even in the most sincere requests for open dialogue.

Hauling,

You're so right about lending practices. However, even with all the laws that are supposed to prevent these type things from happening because they're not supposed to be a factor it still happens. Also, it's so hard to prove because like most things that are discriminatory they aren't always clear except to the person it's happening too.

Anyway...wish I'd never asked the question, but it showed me quite a lot about a number of things and they weren't all good.

Re: Score Only Increases When Balances Increase!

Lel — Tue, 06 Oct 2009 05:51:33 GMT

It's not that people are afraid to talk about those subjects - on the contrary, many are quite willing to voice their opinion. However, on anonymous forums such as this, some people also see fit to deliberately insult and disparage others when discussions regarding these subjects arise. Thus, the "5 things" restrictions were instituted to try to keep these forums civil.

Clearly, there are going to be cases in which discussions about credit and lending necessarily need to have a reference to politics - e.g. the recent credit card legislation, the Making Home Affordable plan. And as HTSU noted, lending practices based on race can be an issue.

The issue in this thread, however, is not whether race plays a role in lending practices, but whether race is considered in the calculation of FICO score. The answer, again, is that it is most definitely not.