topic Re: High Balance? in Understanding FICO® Scoring

High Balance?

Anonymous — Sun, 19 Jul 2015 15:26:54 GMT

I am working on util.. I pulled all 3credit reports and noticed dates of High balances notated on accounts. My question is what % of balance is considered High?? and what effect on future scores does this have..

Re: High Balance?

jbsea — Sun, 19 Jul 2015 16:21:47 GMT

Well everywhere you read 30% utl is the high you want to be at. For scoring purpose you would want to be down under 9% (2% seems to be my sweet spot). That would minimize your score. Utl has no memory so as soon as you bring your balances down you will see your score go up reflecting that change.

Re: High Balance?

Anonymous — Sun, 19 Jul 2015 16:52:51 GMT

Ideally first you want your total or aggregate utilization for all your cc's to not be more than 30%, and no individual card more than 30%. Then after achieving the 30% goal for all accounts and each one individually, it's optimal to be within the 1-9% range again for all accounts. So if you have 5 accounts, keept the total balances on all those 5 accounts combined < 30%, and no 1 card above 30%. Pay off 4 of the 5 accounts to ZERO, and leave just 1 card between 1-9%.

There are always real world exceptions. If you have a clean record with no derogatories or late payments or collections, no public records, and a good age on those accounts, your utilization % can be higher than 30% and still have a high score. Then w/o any negatives, as you pay your % down, your score will go up.

Apart from paying your bills on time ALL the time, the other gretest thing you can do to positively impact and improve your score is to pay down your cc debt, cut back on unncessary spending, and add a new credit card to increase your total credit limit. Everybody has a different situation and story.

Re: High Balance?

Thomas_Thumb — Sun, 19 Jul 2015 19:50:01 GMT

Aggregate utilization has a much greater impact on score than does utilization on a per card basis. The general rule is to keep aggregate utilization under 10% for highest score potential.

An individual card (in my experience) can post at least 50% utilization without any negative impact on score if overall utilization is maintained under 10%. I generally recommend staying under 50% utilization (on specific cards) and to always pay each in full. If you are in credit building mode and don't need to maximize score in the short term, an aggregate utilization up to 20% should be fine. The key is to reduce/hold aggregate utilization to under 10% a couple months before applying for new credit.

Re: High Balance?

cashnocredit — Sun, 19 Jul 2015 19:04:01 GMT

@Anonymous wrote:
I am working on util.. I pulled all 3credit reports and noticed dates of High balances notated on accounts. My question is what % of balance is considered High?? and what effect on future scores does this have..

None. The current balance relative to the CL is what counts for FICO scores. Both for each card and for all cards together, In fact a very high high balance, as long as it was in an earlier billing period, is looked on favorably by underwriters and some specialized scores. It's a strong indicator you can pay if you run up another large balance in the future.

Re: High Balance?

NRB525 — Sun, 19 Jul 2015 22:17:55 GMT

@cashnocredit wrote:
@Anonymous wrote:
I am working on util.. I pulled all 3credit reports and noticed dates of High balances notated on accounts. My question is what % of balance is considered High?? and what effect on future scores does this have..
None. The current balance relative to the CL is what counts for FICO scores. Both for each card and for all cards together, In fact a very high high balance, as long as it was in an earlier billing period, is looked on favorably by underwriters and some specialized scores. It's a strong indicator you can pay if you run up another large balance in the future.

Finally someone answered the question

The question relates to high balance, which is a historical number. Current utilization is the other topic being discussed above.

Re: High Balance?

Anonymous — Sun, 19 Jul 2015 23:05:10 GMT

"Finally, someone answered the question" -- that is going to keep me cheerful for at least a month.

Re: High Balance?

elim — Sun, 19 Jul 2015 23:18:08 GMT

due to past CDL's and moving limits, some of us have "high balance" many times greater than our limits. all is well.

ps: (it looks real good to have a big HB on a charge card)

Re: High Balance?

Thomas_Thumb — Sun, 19 Jul 2015 23:56:25 GMT

@elim wrote:
due to past CDL's and moving limits, some of us have "high balance" many times greater than our limits. all is well.

ps: (it looks real good to have a big HB on a charge card)

Elim, this may be a bit off topic but thought you might know if there is a short term impact associated with increasing HB on a AMEX charge card 5 fold?

I currently have an AMEX with a $2000 HB and I am thinking of charging $10,000 on the card (car downpayment) and then PIF the charge when it posts on the statement. Would my score take a big hit (current score is 850)? I could just use a check for the downpayment but, I have always wanted to boost my AMEX HB when a good opportunity presented itself.

Re: High Balance?

elim — Mon, 20 Jul 2015 00:13:57 GMT

@Thomas_Thumb wrote:
@elim wrote:
due to past CDL's and moving limits, some of us have "high balance" many times greater than our limits. all is well.

ps: (it looks real good to have a big HB on a charge card)
Elim, this may be a bit off topic but thought you might know if there is a short term impact associated with increasing HB on a AMEX charge card 5 fold?

I currently have an AMEX with a $2000 HB and I am thinking of charging $10,000 on the card (car downpayment) and then PIF the charge when it posts on the statement. Would my score take a big hit (current score is 850)? I could just use a check for the downpayment but, I have always wanted to boost my AMEX HB when a good opportunity presented itself.

as long as amex doesnt get scared then the only outcome will be higher spend ability. smart thing would be to pre-warn them of the change in spend pattern and everything should go smooth.

way to collect those MR's

Re: High Balance?

cashnocredit — Mon, 20 Jul 2015 01:27:03 GMT

@Thomas_Thumb wrote:
@elim wrote:
due to past CDL's and moving limits, some of us have "high balance" many times greater than our limits. all is well.

ps: (it looks real good to have a big HB on a charge card)
Elim, this may be a bit off topic but thought you might know if there is a short term impact associated with increasing HB on a AMEX charge card 5 fold?

I currently have an AMEX with a $2000 HB and I am thinking of charging $10,000 on the card (car downpayment) and then PIF the charge when it posts on the statement. Would my score take a big hit (current score is 850)? I could just use a check for the downpayment but, I have always wanted to boost my AMEX HB when a good opportunity presented itself.

I can answer that since most large purchase card usage is done with my Amex plat. It has absolutely no impact on TU or EX scores but, oddly, EQ factors in Amex charge cards on FICO 8 (but not FiCO 4) scores and uses "high balance" as a proxy for the CL but it doesn't ding you like a regular CL when your balance=high balance.. Once your high balance exceeds some value between 40k and 60k EQ also ignores Amex card balances. I think this is also true for high CL credit cards. They are dropped from scoring once the CL is high enough.

Another fact about Amex high balance. It's not the highest balance ever. It's only the high balance for the preceding 18 months. Other issuers may vary.

Re: High Balance?

Revelate — Mon, 20 Jul 2015 17:31:18 GMT

@cashnocredit wrote:
@Thomas_Thumb wrote:
@elim wrote:
due to past CDL's and moving limits, some of us have "high balance" many times greater than our limits. all is well.

ps: (it looks real good to have a big HB on a charge card)
Elim, this may be a bit off topic but thought you might know if there is a short term impact associated with increasing HB on a AMEX charge card 5 fold?

I currently have an AMEX with a $2000 HB and I am thinking of charging $10,000 on the card (car downpayment) and then PIF the charge when it posts on the statement. Would my score take a big hit (current score is 850)? I could just use a check for the downpayment but, I have always wanted to boost my AMEX HB when a good opportunity presented itself.
I can answer that since most large purchase card usage is done with my Amex plat. It has absolutely no impact on TU or EX scores but, oddly, EQ factors in Amex charge cards on FICO 8 (but not FiCO 4) scores and uses "high balance" as a proxy for the CL but it doesn't ding you like a regular CL when your balance=high balance.. Once your high balance exceeds some value between 40k and 60k EQ also ignores Amex card balances. I think this is also true for high CL credit cards. They are dropped from scoring once the CL is high enough.

Another fact about Amex high balance. It's not the highest balance ever. It's only the high balance for the preceding 18 months. Other issuers may vary.

How firm is that 18 months? Both of my Amex tradelines are still reporting the historical ones:

1/14 date on the revolver high balance

11/13 date on the charge card high balance, >18 months.

This is on all 3 bureaus currently. Another poster here just yesterday suggested it was 36 months on that for Amex.

Re: High Balance?

cashnocredit — Mon, 20 Jul 2015 20:25:41 GMT

@Revelate wrote:
@cashnocredit wrote:
@Thomas_Thumb wrote:
@elim wrote:
due to past CDL's and moving limits, some of us have "high balance" many times greater than our limits. all is well.

ps: (it looks real good to have a big HB on a charge card)
Elim, this may be a bit off topic but thought you might know if there is a short term impact associated with increasing HB on a AMEX charge card 5 fold?

I currently have an AMEX with a $2000 HB and I am thinking of charging $10,000 on the card (car downpayment) and then PIF the charge when it posts on the statement. Would my score take a big hit (current score is 850)? I could just use a check for the downpayment but, I have always wanted to boost my AMEX HB when a good opportunity presented itself.
I can answer that since most large purchase card usage is done with my Amex plat. It has absolutely no impact on TU or EX scores but, oddly, EQ factors in Amex charge cards on FICO 8 (but not FiCO 4) scores and uses "high balance" as a proxy for the CL but it doesn't ding you like a regular CL when your balance=high balance.. Once your high balance exceeds some value between 40k and 60k EQ also ignores Amex card balances. I think this is also true for high CL credit cards. They are dropped from scoring once the CL is high enough.

Another fact about Amex high balance. It's not the highest balance ever. It's only the high balance for the preceding 18 months. Other issuers may vary.
How firm is that 18 months? Both of my Amex tradelines are still reporting the historical ones:

1/14 date on the revolver high balance

11/13 date on the charge card high balance, >18 months.

This is on all 3 bureaus currently. Another poster here just yesterday suggested it was 36 months on that for Amex.

I'm pretty sure about the 18 months. But, this is the high balance Amex reports each month, not the historical summary the CRAs also maintain. CRAs seem to have differing historical retention of high balance/cls.

Credit reports combine and track changes in "high balance/CL" for many years. However, the "high balance" field is reported every month when Amex updates the account. That field is the highest balance in the last 18 months on my charge card and is what EQ FICO 8 uses for util. The TU report actually shows what Amex reported each month in the "high balance" field for the last 30 months. EX does not, and just shows the history for what looks like 24 months. You can see here the EX summaries which show the drop in the high balance field. That 58k high balance was incurred 2/12 but EX truncates the summary data at 24 months.

Between Feb 2015 and Apr 2015, your credit limit/high balance was $57,334

Between Dec 2014 and Jan 2015, your credit limit/high balance was $38,096

Between Nov 2014 and Nov 2014, your credit limit/high balance was $21,760

Between Aug 2014 and Oct 2014, your credit limit/high balance was $23,102

Between Jun 2013 and Jul 2014, your credit limit/high balance was $58,392

This is what gave me the opportunity to notice that EQ's FICO 8 score was impacted by utilization when the 38k number hit that was also the actual balance that month and my EQ score dropped like a rock when the HB went to $38,096 then completely recovered when the high balance went up to $57,334. Apparently that was the point that EQ's FICO 8 decided to exclude Amex balances. Ever since then my EQ FICO 8 has not twitched with an Amex balance change.

Re: High Balance?

Revelate — Mon, 20 Jul 2015 22:41:37 GMT

@cashnocredit wrote:
@Revelate wrote:
@cashnocredit wrote:
@Thomas_Thumb wrote:
@elim wrote:
due to past CDL's and moving limits, some of us have "high balance" many times greater than our limits. all is well.

ps: (it looks real good to have a big HB on a charge card)
Elim, this may be a bit off topic but thought you might know if there is a short term impact associated with increasing HB on a AMEX charge card 5 fold?

I currently have an AMEX with a $2000 HB and I am thinking of charging $10,000 on the card (car downpayment) and then PIF the charge when it posts on the statement. Would my score take a big hit (current score is 850)? I could just use a check for the downpayment but, I have always wanted to boost my AMEX HB when a good opportunity presented itself.
I can answer that since most large purchase card usage is done with my Amex plat. It has absolutely no impact on TU or EX scores but, oddly, EQ factors in Amex charge cards on FICO 8 (but not FiCO 4) scores and uses "high balance" as a proxy for the CL but it doesn't ding you like a regular CL when your balance=high balance.. Once your high balance exceeds some value between 40k and 60k EQ also ignores Amex card balances. I think this is also true for high CL credit cards. They are dropped from scoring once the CL is high enough.

Another fact about Amex high balance. It's not the highest balance ever. It's only the high balance for the preceding 18 months. Other issuers may vary.
How firm is that 18 months? Both of my Amex tradelines are still reporting the historical ones:

1/14 date on the revolver high balance

11/13 date on the charge card high balance, >18 months.

This is on all 3 bureaus currently. Another poster here just yesterday suggested it was 36 months on that for Amex.

I'm pretty sure about the 18 months. But, this is the high balance Amex reports each month, not the historical summary the CRAs also maintain. CRAs seem to have differing historical retention of high balance/cls.

Credit reports combine and track changes in "high balance/CL" for many years. However, the "high balance" field is reported every month when Amex updates the account. That field is the highest balance in the last 18 months on my charge card and is what EQ FICO 8 uses for util. The TU report actually shows what Amex reported each month in the "high balance" field for the last 30 months. EX does not, and just shows the history for what looks like 24 months. You can see here the EX summaries which show the drop in the high balance field. That 58k high balance was incurred 2/12 but EX truncates the summary data at 24 months.

Between Feb 2015 and Apr 2015, your credit limit/high balance was $57,334
Between Dec 2014 and Jan 2015, your credit limit/high balance was $38,096
Between Nov 2014 and Nov 2014, your credit limit/high balance was $21,760
Between Aug 2014 and Oct 2014, your credit limit/high balance was $23,102
Between Jun 2013 and Jul 2014, your credit limit/high balance was $58,392

This is what gave me the opportunity to notice that EQ's FICO 8 score was impacted by utilization when the 38k number hit that was also the actual balance that month and my EQ score dropped like a rock when the HB went to $38,096 then completely recovered when the high balance went up to $57,334. Apparently that was the point that EQ's FICO 8 decided to exclude Amex balances. Ever since then my EQ FICO 8 has not twitched with an Amex balance change.

I actually wonder if your spend level does some interesting things with their reporting structure for the very reason it does flirt with the discount line on revolvers.

I'll have to look more closely but what's on the tradeline currently for EX is indeed the 11/13 balance on my still open Zync.

Last full report I got directly from EX was just under the 18 month line, but I have every reason to think that MF is pulling the high balance as reported by the CRA in this case in their parse rather than the historical information:

Between Nov 2013 and Apr 2015, your credit limit/high balance was $11,279

Between May 2013 and Oct 2013, your credit limit/high balance was $2,626

When I next get a full EX report post-mortgage I'll double-check this again. Do you have any historical reports to see what high balance was being reported at a point in time on the main tradeline which I would assume Amex would update directly at the times where EX has shown a change?

Re: High Balance?

cashnocredit — Tue, 21 Jul 2015 00:21:27 GMT

The recent TU report I pulled had historical balances as well as high balances reported. Earlier ones did not thoough they did note the dates that that the reported high balance changed.

Since I've had Amex there have only been two times where the high balance that Amex reports monthly changed downward and they were exactly 18 months from when the initlal high balance balance was posted. The historical summaries match the month by month detail.

As for my spending patterns, I'm not sure how unusual or not they are. My median spend is only about 3k but it sometimes spikes. The first month I had my Amex the balance was just over 8k and that remained the high balance for 5 months when it jumped to 22k. Amex seems pretty serious about their NPSL. Almost exactly a year before I did get the Amex I was turned down cold for a pre-screened gold. I expected at some point they would do an FR or at least call but they have proven very reliable. OTOH, I do pay them promptly on their suggested pay date.