topic Re: Score impact of going from 89% util to <10% in Understanding FICO® Scoring

Score impact of going from 89% util to <10%

llecs — Mon, 09 Aug 2010 06:06:32 GMT

OK, nerd alert: I'm very curious as to what causes what and was able to obtain a consolidated loan for the purposes of paying off revolving debt. I'm posting here to track those score changes. I'll update this first post as changes occur.

ETA....I expect TU to increase to 760 and EQ to 750. I guess I'll know by the end of the first week in Aug.; that's when my last CC w/ a balance reports. One will report a small balance to offset any loss from all $0s.

TU:

7/1 – 667 FICO – 89% util, 11 of 20 TLs reporting balances, revolving balances @ $18,626

7/8 – 682 FICO – 86% util, 9 of 20 reporting balances, revolving balances @ $17,621

7/15 – received consolidation loan for $14,325 after lender’s costs.

7/20 – 680 FICO – 79% util, 8 of 20 reporting balances, revolving balances @ $16,232 (still don’t know why FICO dropped)

7/24 - 682 FICO - 74% util, 7 of 20 reporting balances, revolving balances @ $15,191 (BofA updated on TU to $0)

7/28 - 690 FICO - 47% util, 6 of 20 reporting balances, revolving balances @ $9,865 (Discover & WF updated)

7/29 - 723 FICO - 27% util, 5 of 20 reporting balances, revolving balances @ $5,906

7/30 - 732 FICO - 14% util, 5 of 20 reporting balances, revolving balances @ $3,359 (Amex finally updated the balance to July 15's statement amount)

8/7 - 735 FICO - 10% util, 4 of 20 reporting balances, revolving balances @ $2,537 (one update to go)

8/8 - 758 FICO - 3% util, 3 of 20 reporting balances, revolving balances @ $1,133

DONE with TU! While Amex (Green) doesn't factor into util for EQ one bit, it does for this version of TU (TU98). So, that why you see 3% vs. 1%. Macys doesn't factor at all because of their non-reporting of CLs, and the only other balance is the Discover at $25.

EQ:

7/1 – 652 FICO – 86% util, 11 of 21 reporting balances, revolving balances @ $18,626

7/7 – 656 FICO – 83% util, 10 of 21 reporting balances, revolving balances @ $18,103

7/15 – received consolidation loan for $14,325 after lender’s costs.

7/15 – 659 FICO – 82% util, 9 of 21 reporting balances, revolving balances @ $16,232

7/22 – 668 FICO – 82% util, 8 of 21 reporting balances, revolving balances @ $13,681 (the balance decrease was Amex, hence the no-change in util, but the increase could have been as a result of 1-yr anniversary of 3 TLs? IDK. I did see large unexplained gains in May.

7/23 - 673 FICO - 75% util, 7 of 21 reporting balances, revolving balances @ $12,644

7/25 - 695 FICO - 59% util, 7 of 21 reporting balances (Discover updated, but w/ $25 in interest instead of $0), revolving balances @ $10,201

7/27 - 719 FICO - 40% util, 6 of 21 reporting balances, revolving balances @ $7,318

7/28 - 763 FICO - 14% util, 5 of 21 reporting balances, revolving balances @ $3,359

8/6 - 774 FICO - 9% util, 4 of 21 reporting balances, revolving balances @ $2,537

8/7 - 777 FICO - 1% util, 3 of 21 reporting balances, revolving balances @ $1,133

DONE! The $1,133 represents Amex Green and Macys store, both of which aren't factored into util. The only balance that is factored that is reporting is $25 on Discover for left over interest charges after the paydown.

FAKO Comparison (like I care…for entertainment purposes only):

TU:

7/6 – 637 FAKO TU PLUS; 632 TU TransRisk via CK

7/15 - 637 FAKO TU PLUS; 658 TU TransRisk via CK

7/23 – 646 FAKO TU PLUS; 684 TU TransRisk via CK

7/24 - 646 FAKO TU PLUS; 684 TU TransRisk via CK

7/27 - 668 FAKO TU PLUS; 695 TU TransRisk via CK; 498 TU CC-enhanced TransRisk via Juniper

7/29 - 693 FAKO TU PLUS; 726 TU TransRisk via CK; 587 TU CC-enhanced TransRisk via Juniper

7/30 - 693 FAKO TU PLUS; 730 TU TransRisk via CK; 638 TU CC-enhanced TransRisk via Juniper

8/7 - 698 FAKO TU PLUS; 743 TU TransRisk via CK

8/8 - 705 FAKO TU PLUS; 751 TU TransRisk via CK; 690 TU CC-enhanced TransRisk via Juniper

EQ:

7/6 – 651 FAKO EQ PLUS

7/15 – 651 FAKO EQ PLUS

7/23 – 651 FAKO EQ PLUS

7/25 - 667 FAKO EQ PLUS

7/27 - 673 FAKO EQ PLUS

7/28 - 698 FAKO EQ PLUS

8/6 - 698 FAKO EQ PLUS

8/7 - 710 FAKO EQ PLUS

Re: Score impact of going from 89% util to <10%

vanillabean — Sat, 24 Jul 2010 01:54:47 GMT

I don't know what a consolidated loan is, but it looks like you have a well focused plan!

I assume you got a better interest rate and perhaps even didn't have to close any cards?

Re: Score impact of going from 89% util to <10%

fused — Sat, 24 Jul 2010 02:50:08 GMT

Ilecs, I want to play along with you. Can you refresh our memories on your baddies, credit mix, length of credit and AAoA? After we know this stuff, we can start wagering. LOL!

Re: Score impact of going from 89% util to <10%

llecs — Sat, 24 Jul 2010 03:11:47 GMT

Fair enough...

TU:

3 yr AAoA

oldest TL is 9.3 yrs ago

20 TLs reporting: 15 are active and open CCs (Amex charge, store charge, Visas, MCs, etc.). No reported loans. The closed are PIF loans or CCs.

1 inquiry from last November.

The only baddie is a redeemed repo that is factored in as a baddie. It lists "1" with a red flag for "Accounts with negative indicators.

EQ:

3 yr AAoA

oldest TL is 13.5 yrs old

21 TLs reporting: 15 are active and open CCs (Amex charge, store charge, Visas, MCs, etc.). No reported loans. The closed are PIF loans or CCs.

6 inquiries in past year w/ the last being last December and 4 of the 6 being in last July.

The only baddie is a redeemed repo w/ the last late at 5.5 yrs old, but FICO isn't scoring this. "Great" is my payment history and there's no red flag and says "0" for "Accounts with negative indicators".

I'm pretty certain as to my score, but here's a tip. Last year my util had hit a long-while low of 18%. TU hit 740 and EQ hit 720. Added TLs, higher util, and DSNB accounts (lost $7k in CLs) didn't help.

Re: Score impact of going from 89% util to <10%

llecs — Sat, 24 Jul 2010 12:20:30 GMT

BTW, I'll pull CCT daily and as I see a change in balances, as they report the new statement balance, then I'll come back here and pull a new report and post the results in my org. post.

As an FYI, BofA is set to update on TU any moment. Wells Fargo and Discover will start to update probably tomorrow. PNC will start to update by Monday. My CapOne will update around the first. Macys by the 5th. Juniper by the 7th. Amex hasn't updated for TU in over a month. Amex doesn't really factor into EQ's util and isn't scheduled to update until Aug. 15. Once CapOne updates, my util on paper would be 9.8% assuming I don't pay Junny or Macys (which I will when due).

ETA....7/24: Discover and WF's statements cut. Discover ended up reporting a small balance due to the interest in the tune of $25 and already reported to EX.

Re: Score impact of going from 89% util to <10%

fused — Sat, 24 Jul 2010 17:33:33 GMT

I'm wondering how many points you'll lose for the new account (loan) reporting. I'm sure it will impact your AAoA, but how much. Other than that, I think scores around 750 is likely.

Re: Score impact of going from 89% util to <10%

llecs — Sat, 24 Jul 2010 17:48:32 GMT

@fused wrote:

I'm wondering how many points you'll lose for the new account (loan) reporting. I'm sure it will impact your AAoA, but how much. Other than that, I think scores around 750 is likely.

I'm guessing, if it reports, a 20-25 pt loss. However, to date, Lending Club still has yet to report and they didn't hit me up with an inquiry (but did a soft the day I applied). Time will tell. The first due date is at the end of August. If it does report, then my 750/760 guesstimate would be off by that much.

If they do report, then my AAoA drops from 3.1 yrs to 2.9 yrs on both EX and TU (not bad place to be considering). If the open date is set at 7/1, then my AAoA reverts to 3 years in September. If 8/1, then I'd have to wait until October. For EQ, it goes from 3.5 to 3.4, so no impact.

Discover updated on EX this morning, but left a $25 balance from the interest. I guess I'll have to force a payment to the remaining if I want all but one to report a balance. Plus there's the issue of Amex too. It won't update until mid-August.

Re: Score impact of going from 89% util to <10%

fused — Sat, 24 Jul 2010 18:06:21 GMT

Up to 25 points?? Yikes!!!! I was thinking 12-18, but you're smarter than me when it comes to this stuff. I still think you will hit 750 with TU and EQ.

Re: Score impact of going from 89% util to <10%

llecs — Sat, 24 Jul 2010 18:09:40 GMT

Well, with 15 new TLs added within the past 3 yrs, I'd had some time to think about it. LOL. Hopefully the new TL reporting won't coincide with a balance update.

Re: Score impact of going from 89% util to <10%

llecs — Sun, 01 Aug 2010 14:51:59 GMT

UPDATE...

I'm in the home stretch now with 3 TLs (well, really 2, because one is Macys with no CL listed) left to update. For the past many days I have updated the first post showing the changes to util in relation to changes to score. The three remaining cards are CapOne 822/1000 and that should update starting on Tuesday, 1460/1500 for Juniper and that should update starting the 4th. Finally Macys has a $600 balance and that should update on the 5th, but isn't factored into util. As of today, my util is less than 1% once everything reports with balances only on Amex and $25 on Discover.

As you can see, the scores went up by a fair amount. Despite TU dropping 75% to date, the increase was a lot less than I thought it would at 65 points. Now I'm not complaining any, but I thought the change would be more. Conversely, EQ went above and beyond. 111 points for 72% less in util is a lot more than I thought it would be.

I'll post a final update later this week.

Re: Score impact of going from 89% util to <10%

Lel — Sun, 01 Aug 2010 15:30:22 GMT

That's a great jump in EQ! Not too shabby with TU; perhaps that will edge up a bit in coming weeks.

Re: Score impact of going from 89% util to <10%

fused — Sun, 01 Aug 2010 17:07:48 GMT

Ilecs, I still think your TU score will reach 750 or more when all is said and done. Why? Your Cap1 is at 82% and your Juny is maxed out at 97%.

Re: Score impact of going from 89% util to <10%

Anonymous — Sun, 01 Aug 2010 17:50:23 GMT

AMEX is the only Credit Card I have that will report payments anytime I want. I just call them up and they report it. For some reason my limit shows with them too. $4,700.

Congrats on the huge score increase!!!

Re: Score impact of going from 89% util to <10%

fused — Sun, 01 Aug 2010 17:55:04 GMT

@Anonymous wrote:

AMEX is the only Credit Card I have that will report payments anytime I want. I just call them up and they report it.

Wow, really???

Re: Score impact of going from 89% util to <10%

vanillabean — Sun, 01 Aug 2010 18:15:16 GMT

@fused wrote:

@Anonymous wrote:

AMEX is the only Credit Card I have that will report payments anytime I want. I just call them up and they report it.
Wow, really???

Me too. UtahTiger, how soon after the statement cutoff does your monthly balance show up on your EQ and TU credit reports?

Re: Score impact of going from 89% util to <10%

Anonymous — Mon, 02 Aug 2010 15:50:22 GMT

I don't know when my monthy cutoff dates are? I don't even know what this is but I think it is when the send me a statement?

Re: Score impact of going from 89% util to <10%

Anonymous — Mon, 02 Aug 2010 16:12:55 GMT

I can't thank you enough for posting this information.

Now...do you know why the World Master Card accounts refuse to report a credit limit? The change to a Chase World Master Card significantly reduced my score.

Re: Score impact of going from 89% util to <10%

llecs — Mon, 02 Aug 2010 17:07:40 GMT

@Anonymous wrote:

I can't thank you enough for posting this information.

Now...do you know why the World Master Card accounts refuse to report a credit limit? The change to a Chase World Master Card significantly reduced my score.

I don't know why they do that. Sounds like they "upgraded" you. Woohoo.

I was hit with the same when my Macys and Bloomingdales updated in May with no CLs. I instantly lost over $7000 in available credit and it hurt my score when util jumped by 20% or so. Back in the day, CapOne didn't report either. The only logical reason behind it would be for profit. If CLs don't report, and if the saavy consumer knows that it won't factor into util, then maybe their logic is that I can run up my balances without any scoring consequence and therefore fork more interest to them over time as my balances remain high. That's my only thought. I'm keeping my DSNB cards on ice permanently. If they get closed, they get closed.

Re: Score impact of going from 89% util to <10%

jello77 — Tue, 03 Aug 2010 08:57:37 GMT

--------------------------------------------------------------------------------------
keepingscore101 wrote:
do you know why the World Master Card accounts refuse to report a credit limit?
The change to a Chase World Master Card significantly reduced my score.
--------------------------------------------------------------------------------------

The reason your World Master Card doesn't report the credit limit might be because it's one of those notorious "no pre-set spending limit' cards that do not report the credit limit to the agencies. This type of card may appear on your credit report as Type = Open (for TU and EQ) or Type = Flex Spending (for EX) instead of Type = Revolving.

From what I have read, if a card is listed as Type = Open or Type = Flex Spending, the account should not be included when figuring the utilization rate. If a card is listed as Type = Revolving and no credit limit is reported, the agency will use the "largest reported balance" in place of the credit limit when scoring your utilization rate.

This issue is confusing and how a card with no reported credit limit affects your score seems to depends on which agency and which version of the FICO scoring model is being used.

I recently got a notice from Citicards that my Premium Select card with a 13,000 credit limit would be upgraded to a World Master Card with no pre-set spending limit. I called and said I did NOT want to be upgraded, and they said I could keep my current card.

You might want to call and ask if you can be changed back to your previous card. Some people have said card companies will report the credit limit if you call and ask them to.

Re: Score impact of going from 89% util to <10%

vanillabean — Tue, 03 Aug 2010 17:08:58 GMT

@jello77 wrote:

From what I have read, if a card is listed as Type = Open or Type = Flex Spending, the account should not be included when figuring the utilization rate. If a card is listed as Type = Revolving and no credit limit is reported, the agency will use the "largest reported balance" in place of the credit limit when scoring your utilization rate.

I have not taken the step of calling our Visa's CCC to insist that the former status (Open) be changed to the latter (Revolving and no credit limit reporting, but the high balance reporting). I suspect it can't be done without suffering regrettable side effects, and this card is this one that goes farther back than the others. I just have no interest in rocking the boat when I'm not on solid ground.

You can well imagine then that for those years we had that one card after the open status kicked in and we happily paid in full by the due date, the dollar amount of our available balance would be minus that of the monthly balance. The credit report would list seemingly conflicting factors such as High revolving balances (because the available balance was on the minus side) and No credit card activity (because no credit limit or high balance was reported).

As it happened, we got a card reporting a healthy credit limit somewhere at the time of the much talked about "760 is the new 720." So we have always stayed above the cutoff. But not because we had any clue about what was going on. We were most certainly blissfully ignorant.

Are your familiar with the Blissful Ignorance Effect? It "suggests that individuals have a tendency to expect more favorable outcomes with vague information after taking an action than prior to taking the action." That would explain why people calling in to activate a new card have no reservations about asking for a CLI at the time. The approach works for some and with no downside, but I figure the automatic CLIs will to come to you soon enough if your finances are in order overall.

And due to such automatic CLIs, the credit limit for the Visa card that I mentioned has long been so high that it exceeded even the cutoff for the card to be included in the util calculation. Sure, it would be nice if the high balance reported, but the other cards provide an ample total of credit limits, and with a reported total of monthly balances of near $0, the util is 1%, so we're ok.