topic Re: AZEO with 2 cc? in General Credit Topics

AZEO with 2 cc?

Anonymous — Mon, 05 Aug 2019 01:57:00 GMT

I heard a lot about AZEO with 3 and more cards. But does that make sense with only 2?

Re: AZEO with 2 cc?

kdm31091 — Mon, 05 Aug 2019 02:03:37 GMT

If you want to eke out every single point of FICO I believe you would have to do AZEO with 3 cards. With 2 cards, you will either have half of your accounts with a balance or none, both of which are penalized by the algorithim (IMO this is not a major factor and unlikely to prevent you from qualifying for anything you'd otherwise qualify for, so I wouldn't stress over it).

Re: AZEO with 2 cc?

Anonymous — Mon, 05 Aug 2019 02:04:35 GMT

There is a score penalty for 50% of cards having a balance so yes, AZEO makes sense for two cards. It’s one of the only times I would recommend AZEO when it comes to FICO 8 and 9.

Re: AZEO with 2 cc?

Anonymous — Mon, 05 Aug 2019 02:15:09 GMT

@Saeren

"penalty for 50% of cards having a balance" this is what I get with AZEO, right (1 card show balance and other one don't)? So how that makes sense? Or I misunderstood something.

Now I am using both cads showing ~2% utilization on both and combined. Will I benifit of showing one of them 0 or I'll be penalized for that?

Thanks for all answers

Re: AZEO with 2 cc?

Anonymous — Mon, 05 Aug 2019 02:26:30 GMT

@Anonymous wrote:
@Saeren
"penalty for 50% of cards having a balance" this is what I get with AZEO, right (1 card show balance and other one don't)? So how that makes sense? Or I misunderstood something.
Now I am using both cads showing ~2% utilization on both and combined. Will I benifit of showing one of them 0 or I'll be penalized for that?

Thanks for all answers

You’ll minimize the damage if you just keep a low balance on one of the cards. When you have just two cards, it’s very easy to get above the 8.9% aggregate threshold and take an additional hit on your score.

Ideally you would add a third card but if you’re running with two for awhile, have one always report $0.

Re: AZEO with 2 cc?

Anonymous — Mon, 05 Aug 2019 02:32:35 GMT

Ok then. I'll show 0 on one of my cards. Question is - should I show 0 on the same card each time or I can rotate them?

I've got my 2nd just recently (June) so I would like to wait 4-5 months before applying for the 3rd one.

Re: AZEO with 2 cc?

HeavenOhio — Mon, 05 Aug 2019 02:54:48 GMT

By definition, you can't do AZEO (all zero except one) with two positive balances AZEO entails leaving a tiny balance on one card (at least $5, but not much more) with the rest reporting zero.

That said, it's very common for one to achieve the same score as one's AZEO score with two or more cards reporting positive balances. That varies from score to score and profile to profile.

For scoring purposes, there's no need to rotate how your cards report. Do what's convenient for you.

With two cards, one should report a positive balance and the other should report zero. All cards at zero will result in a fairly substantial penalty. It's important to realize, however, that the penalty is temporary. There's no need to panic unless an important application for credit is in the immediate future.

Re: AZEO with 2 cc?

Anonymous — Mon, 05 Aug 2019 03:03:33 GMT

With exactly 2 revolvers, having one report $0 and the other report a small balance will maximize Fico scores for that profile. This is of course 50% of revolvers with a balance. It's arguable as to whether or not moving to 100% of cards with a balance (letting the $0 balance card report a non-zero balance along with the other) would create a greater ding, or reporting 0% of cards with a balance (no revolving credit use) would. It's probably around the same penalty on most profiles, but one would have to test it on theirs to see which is "better." Without question though in terms of Fico scoring, this individual would want to have a small reported balance on just one of the two cards.

Re: AZEO with 2 cc?

wasCB14 — Mon, 05 Aug 2019 03:05:13 GMT

@HeavenOhio wrote:
By definition, you can't do AZEO (all zero except one) with two positive balances AZEO entails leaving a tiny balance on one card (at least $5, but not much more) with the rest reporting zero.

That said, it's very common for one to achieve the same score as one's AZEO score with two or more cards reporting positive balances. That varies from score to score and profile to profile.

For scoring purposes, there's no need to rotate how your cards report. Do what's convenient for you.

With two cards, one should report a positive balance and the other should report zero. All cards at zero will result in a fairly substantial penalty. It's important to realize, however, that the penalty is temporary. There's no need to panic unless an important application for credit is in the immediate future.

I heard a while back that if a card has had 0 balances for 6-12 months or whatever, scores could suffer if it was treated as "inactive"...even if the account was remaining open.

Not that I'm an expert on scoring. I'm an "All Zero Except Eight" practitioner (no denials since I first got a FICO score 5 years ago, though) and treat an 800 FICO as an indication I should get another bonus.

Re: AZEO with 2 cc?

SouthJamaica — Mon, 05 Aug 2019 14:14:29 GMT

@Anonymous wrote:
I heard a lot about AZEO with 3 and more cards. But does that make sense with only 2?

Yes it does.

Re: AZEO with 2 cc?

SouthJamaica — Mon, 05 Aug 2019 14:16:55 GMT

@Anonymous wrote:
Ok then. I'll show 0 on one of my cards. Question is - should I show 0 on the same card each time or I can rotate them?
I've got my 2nd just recently (June) so I would like to wait 4-5 months before applying for the 3rd one.

1. Yes you can rotate them.

2. If you don't need a third card, please don't apply for one. The difference between your scores with 1/3 cards reporting a balance and 1/2 cards reporting a balance is going to be zero in some scoring models, and insignificant in others. So it isn't worth it.

Re: AZEO with 2 cc?

SouthJamaica — Mon, 05 Aug 2019 14:19:45 GMT

@wasCB14 wrote:
@HeavenOhio wrote:
By definition, you can't do AZEO (all zero except one) with two positive balances AZEO entails leaving a tiny balance on one card (at least $5, but not much more) with the rest reporting zero.

That said, it's very common for one to achieve the same score as one's AZEO score with two or more cards reporting positive balances. That varies from score to score and profile to profile.

For scoring purposes, there's no need to rotate how your cards report. Do what's convenient for you.

With two cards, one should report a positive balance and the other should report zero. All cards at zero will result in a fairly substantial penalty. It's important to realize, however, that the penalty is temporary. There's no need to panic unless an important application for credit is in the immediate future.
I heard a while back that if a card has had 0 balances for 6-12 months or whatever, scores could suffer if it was treated as "inactive"...even if the account was remaining open.

Not that I'm an expert on scoring. I'm an "All Zero Except Eight" practitioner (no denials since I first got a FICO score 5 years ago, though) and treat an 800 FICO as an indication I should get another bonus.

Not true. I have cards which have reported zero balances for as many as 4 1/2 years, and none of them has ever been treated as inactive. It can be discerned from the credit report that an account is active even though the reported balance is zero.

Re: AZEO with 2 cc?

Anonymous — Tue, 06 Aug 2019 01:09:35 GMT

@SouthJamaica wrote:
2. If you don't need a third card, please don't apply for one. The difference between your scores with 1/3 cards reporting a balance and 1/2 cards reporting a balance is going to be zero in some scoring models, and insignificant in others. So it isn't worth it.

Great advice above. The whole "you need at least 3 cards for maximum Fico scoring benefit" argument that you hear on this forum all the time would have one thinking that scoring benefit of 3+ verses 2 is actually significant, when it's anything but if you actually dig around and quantify it with data. The gains realized, if any, are insignificant like SJ stated.

Re: AZEO with 2 cc?

Anonymous — Tue, 06 Aug 2019 03:35:34 GMT

@Anonymous wrote:
@SouthJamaica wrote:
2. If you don't need a third card, please don't apply for one. The difference between your scores with 1/3 cards reporting a balance and 1/2 cards reporting a balance is going to be zero in some scoring models, and insignificant in others. So it isn't worth it.
Great advice above. The whole "you need at least 3 cards for maximum Fico scoring benefit" argument that you hear on this forum all the time would have one thinking that scoring benefit of 3+ verses 2 is actually significant, when it's anything but if you actually dig around and quantify it with data. The gains realized, if any, are insignificant like SJ stated.

So... you need three to do AZEO but adding that third card won’t make a difference... sounds like AZEO is a load of crap for anything except mortgage and auto after all. 🤷‍♂️

Re: AZEO with 2 cc?

Anonymous — Tue, 06 Aug 2019 04:06:16 GMT

@Anonymous wrote:
So... you need three to do AZEO but adding that third card won’t make a difference... sounds like AZEO is a load of crap for anything except mortgage and auto after all. 🤷‍♂️

No one said you need 3 cards to do AZEO (you don't).
No one said adding a third card won't make a difference, simply that the difference is overstated on this forum.

Have you ever tested the difference in your Fico scores in going from (say) 25% of your cards with a balance to 50% of them with a balance? If so, what was it? If not, I suggest you try. The difference on my Fico 8 scores is 0 points EX, 4 points TU and 6 points EQ. In my book, insignificant differences.

Re: AZEO with 2 cc?

Anonymous — Tue, 06 Aug 2019 05:02:19 GMT

@Anonymous wrote:
@Anonymous wrote:
So... you need three to do AZEO but adding that third card won’t make a difference... sounds like AZEO is a load of crap for anything except mortgage and auto after all. 🤷‍♂️
No one said you need 3 cards to do AZEO (you don't).
No one said adding a third card won't make a difference, simply that the difference is overstated on this forum.
Have you ever tested the difference in your Fico scores in going from (say) 25% of your cards with a balance to 50% of them with a balance? If so, what was it? If not, I suggest you try. The difference on my Fico 8 scores is 0 points EX, 4 points TU and 6 points EQ. In my book, insignificant differences.

I don’t get any difference whatsoever going to AZEO on my FICO 8s and I lose 4-8 points depending on the bureau for crossing 1/2 with a balance, with Equifax dinging me when I cross 1/3 with a balance. What I can say is that when I added my third card, my score rapidly went up from the 630-650 range on all three bureaus to 650-680 when I checked three months after adding that third account and I didn’t cross any utilization thresholds either (it was a $1K card, my other two were $2K and $6250 with about $300 reporting a month on the $6250 card and PIF) so for my profile? It made a huge difference.

Re: AZEO with 2 cc?

Anonymous — Tue, 06 Aug 2019 05:13:11 GMT

What sectors of the Fico pie (scoring ingredients) do you attribute those score gains to? I mean, it's not like there's a known over/under of 2.5 CCs that when crossed always results in gains. What I mean is that "number of revolvers" is not a Fico scoring factor. Can number of revolvers impact other sectors of the Fico pie? Absolutely... number of cards/accounts with a balance, utilization, etc. IMO however, the scores gains that your referenced being a "huge difference" didn't necessarily (and likely didn't) come from the addition of a 3rd card. You referenced a period of 3 months, where a lot can happen over that time period. For example, your AoOA could have crossed a threshold just to provide one example. I'm just curious how exactly you believe that adding a third card increased your Fico scores some 20-30 points in terms of score ingredients.

Re: AZEO with 2 cc?

Anonymous — Tue, 06 Aug 2019 05:51:22 GMT

@Anonymous wrote:
What sectors of the Fico pie (scoring ingredients) do you attribute those score gains to? I mean, it's not like there's a known over/under of 2.5 CCs that when crossed always results in gains. What I mean is that "number of revolvers" is not a Fico scoring factor. Can number of revolvers impact other sectors of the Fico pie? Absolutely... number of cards/accounts with a balance, utilization, etc. IMO however, the scores gains that your referenced being a "huge difference" didn't necessarily (and likely didn't) come from the addition of a 3rd card. You referenced a period of 3 months, where a lot can happen over that time period. For example, your AoOA could have crossed a threshold just to provide one example. I'm just curious how exactly you believe that adding a third card increased your Fico scores some 20-30 points in terms of score ingredients.

I can’t quantify it because back then, I wasn’t tracking like I do now. What I can say though is that a significant change occurred in that time period while I literally have none from AZEO. My point is that none of these actions have guaranteed point gains or losses unlike something like adding an installment loan if you don’t have one which is universal because of credit mix. There really isn’t a right answer when it comes to adding a third account because it’s another factor that depends on the profile. Lots of us have found benefit so it seems hard to believe it’s a myth.

Re: AZEO with 2 cc?

Anonymous — Tue, 06 Aug 2019 05:56:02 GMT

@Anonymous wrote:
I heard a lot about AZEO with 3 and more cards. But does that make sense with only 2?

I just tested this last month. It absolutely can have a significant effect. TU 8 +14, EQ 8 +19, and TU AUTO 9 +27, among many others.

myFICO provides access to 28 FICO scores and 22 of them went up anywhere from +2 to +27 points.

Here is a table that shows changes to all of those scores, with the score factor reasons listed before and after on every single score.

The 'too many accounts with balances' reason still shows up, but it moves down in the list on many of the scores.

Re: AZEO with 2 cc?

Anonymous — Tue, 06 Aug 2019 10:18:49 GMT

“(at least $5, but not much more)”

Where the does the idea that the one card needs to report a small balance come from? ( emphasis on small) The upper limit could theoretically be hundreds or thousands of dollars as long as it’s below the thresholds it makes no difference how much it is. The only requirement is that it is large enough to not get rounded to zero. That’s where the $5 comes from. But the “not much more” is as overstated as AZEO’s impact.