topic Util ? in Understanding FICO® Scoring

Util ?

homerunstacy — Thu, 14 Oct 2010 12:45:12 GMT

Is equal weight given to overall combined util versus individual cc util?

Re: Util ?

homerunstacy — Thu, 14 Oct 2010 12:49:01 GMT

one more question.. is this the same formula used for FICO Auto Enhanced scores?

Re: Util ?

haulingthescoreup — Thu, 14 Oct 2010 14:39:52 GMT

They both count, but I don't know which counts more.

So you can have a low overall util with a couple of maxed-out cards, and you'll be hurt for them.

Whether util carries the same weight in auto-enhanced, I also don't know. (Not very helpful this morning, am I? ) All we really know about auto-enhanced is that any history of auto loans carries more weight. To me, that would imply that everything else has to be weighted a bit less to compensate, but whether the proportions change, dunno.

There's a good thread over on Auto Loans that discusses auto-enhanced scores.

Re: Util ?

RobertEG — Wed, 27 Oct 2010 00:14:46 GMT

FICO made a statement in one of their webinars a few years ago that revolving % util is scored at approx. half for overall % util, and the other half for combined util of individual cards.

This is my understanding of how this would break down in actual scoring.

Util of credit is approx 30% of overall FICO score. That is apprix 255 points max.

If half ot this is based on overally % util, that is approx 125 points weighted to overall util, and the other 125 or so assinged on a combined asessmenent of indiv card util.

For individ card util, there are two factors, The indiv % util on each card, and the number of cards, expressed as a % of total cards, that report any balance.

That is as specific as Fair Isaac breaks it down for us.

So make the assumption that you have four credit cards. That amounts to five sub-factors under indiv util. The indiv % util on each of the four cards, and the % of cards showing balances. Dividing 125 by 5, then a general estimate is that % util on each card weighs in at around 25 points apiece, and % of cards reporting a balance weighs in also at around 25 points. I iknow these are just broad assumptions, but I think it makes the general point of the importance of overall % util versus the efffect of indiv card utils. It may very well be true that FICO does not score each indiv card the same (such as in the assumption I made that all count equally at 1/5), and may weigh higher percentage util indiv cards more than lower % util cards, but they could never count as much as overall % util. Some assumptions are necessary, since Fair Isaac does offer details of actual scoring algorithms.

From all that Fair Isaac has disclosed, it would appear to me that overall % util counts approx 4-5 times more in scoring than the indiv util of a single card.

But there ARE non-FICO issues to consider. High % util on an individual card over a period of time could lead to creditor making a future reduction credtit limit on that card, or even closure of the account. So it is not all just about FICO scoring. So the importance of individ card util is not meant to be mnimized.

Re: Util ?

homerunstacy — Fri, 15 Oct 2010 11:48:52 GMT

Wow.. fantastic info. Thanks so much for sharing it!

Re: Util ?

Anonymous — Tue, 26 Oct 2010 15:33:21 GMT

Perfect! Was just looking for this info. Thanks for posting.