topic AZEO Method in General Credit Topics

AZEO Method

Anonymous — Sat, 01 Feb 2020 23:22:16 GMT

Hello all,

I hope this is the appropriate forum to ask this. Im curious of the AZEO Method. I'm aware of what it is:

-Have all cards except one report $0 balance and then have that card report at or below 8.9%

My quesiton is, I've always heard that having cards reporting $0 is bad for your credit due to lack of use, am I incorrect?

Also, wont they eventually close out the account if youre not using it?

Thanks

Re: AZEO Method

Anonymous — Sat, 01 Feb 2020 23:25:40 GMT

Use each card once every couple months to keep activity and pay it off by the statement date. That keeps it open while allowing it to report zero for purposes of AZEO.

Re: AZEO Method

Anonymous — Sat, 01 Feb 2020 23:39:54 GMT

I have just started the AZEO method, started January 1st, from all the forums I’ve read here, as long as you pop a $10 charge on them here and there they will not close, so I have all my cards at zero except 1 card and it is sitting at 6%, my plan is to pay that card off next month and put 6% on another card and keep rotating cards to keep them open and something going through each one instead of just the same card reporting, so far though my scores have increased about 10 points over 2 week period for a total of 20 points from each bureau, my Equifax wasn’t reporting properly until I called them and it finally went up 7 points the first week and then 13 the second week, Transunion went up 18 points all at once, Experian went up 17 points the first week and 2 points the second week, I still have a card that will report february 12th that will show true 6% uti, right now with that card reporting I’m around 18 to 20%, hope this helps, it does work if you stick to it

Re: AZEO Method

Anonymous — Sat, 01 Feb 2020 23:49:38 GMT

Make sure that your card with a balance is a bank card, not a store card. There are reports that using a store card won’t give the same boost. Long as it’s carrying a major network logo like Amex, Visa, or MasterCard, you’re good. A Target RedCard wouldn’t be good, but the MasterCard version would work.

Re: AZEO Method

Anonymous — Sun, 02 Feb 2020 02:23:11 GMT

Using a card every month, pay in full before the closing date, and doing that for years doesn't mean you haven't used the card from the issuer's standpoint, because obviously they have record of use. It will show as 0 on your reports, which may translate into non use on credit reports.

Re: AZEO Method

KLEXH25 — Sun, 02 Feb 2020 06:12:14 GMT

@Anonymous wrote:
Hello all,

I hope this is the appropriate forum to ask this. Im curious of the AZEO Method. I'm aware of what it is:

-Have all cards except one report $0 balance and then have that card report at or below 8.9%

My quesiton is, I've always heard that having cards reporting $0 is bad for your credit due to lack of use, am I incorrect?

Also, wont they eventually close out the account if youre not using it?

Thanks

You can still use all your cards while doing AZEO. You just have to know when your lender reports your balance. USUALLY, it's the last day of your statement period (when your statement "cuts"), but not always. The trick is to make sure you pay off your cards before that date so when it reports, the balance is $0. Of course this can be tricky if charges are pending longer than usual (I'm looking at you Discover). Also, keep in mind that it's not practical to employ AZEO all the time. It should only be used if you're about to apply for something and want to squeeze every last FICO score points.

Re: AZEO Method

Anonymous — Sun, 02 Feb 2020 07:28:17 GMT

@KLEXH25

So its not practical to do it all the time? My application for a mortgage will probably be around June or July, depending on how effective this method will be. I was planning on implementing it from now until then for the best results. Is that something I should avoid doing, in your opinon?

Re: AZEO Method

Anonymous — Sun, 02 Feb 2020 07:29:29 GMT

@CardNut

Can you be more specific in your last statement?

"It will show as 0 on your reports, which may translate into non use on credit reports."

It sounds like the first part of your statement was a positive and the second part is a negative, am I correct?

Thanks

Re: AZEO Method

thornback — Sun, 02 Feb 2020 08:49:35 GMT

@Anonymous wrote:
@KLEXH25

So its not practical to do it all the time? My application for a mortgage will probably be around June or July, depending on how effective this method will be. I was planning on implementing it from now until then for the best results. Is that something I should avoid doing, in your opinon?

AZEO offers a one-time score boost. To keep the boost received from AZEO, you have to continue AZEO for each billing/reporting cycle; once you stop, any points gained from AZEO will be lost. AZEO points do not compound month after month - in other words, if you gain 5 points from the first month of implementation, you will not gain an additional 5 points for doing it a second month -- you will always only retain the first 5 points.

That is why it's not 'practical' or necessary to do AZEO continuously but rather on occassion, prior to applying for something, to squeeze out every available FICO point so you may receive the best possible rate/terms.

What you could do is implement AZEO now, just to see how it affects your scores since all profiles differ and, after testing, go back to letting your cards report as normal. Then, re-implement AZEO for the billing/reporting cycle prior to your mortgage app (give yourself enough time to make sure all accounts are fully updated and AZEO is reflected). Or - you can implement AZEO now and continue doing so until after your mortgage app so it's one less thing to think about between now and then. Do whatever works for you.

Re: AZEO Method

Anonymous — Sun, 02 Feb 2020 15:25:56 GMT

@Anonymous wrote:
@CardNut

Can you be more specific in your last statement?

"It will show as 0 on your reports, which may translate into non use on credit reports."

It sounds like the first part of your statement was a positive and the second part is a negative, am I correct?

Thanks

AZEO is a good short term way to boost scores. If you are applying for a mortgage in June or July, I would make sure all cards except one report 0 balances on the May statement and continue until the house closes. Mortgage lenders tend to SP during the purchase process up until closing to make sure nothing out of the ordinary shows up. 5 or 10 points might not make a difference if you abandoned AZEO after applying, but no reason to risk it.

Some scoring models, especially the newest ones may take into account recent use of cards, which they can measure by reporting balances. All zeros all the time could be interpreted as cards not being used and lower score in the long term.

This is what I would do just to safeguard scenarios in mortgage lender's score analysis we might not know about.

Re: AZEO Method

Anonymous — Sun, 02 Feb 2020 15:47:23 GMT

I’ve been letting my accounts report AZEO for some time now, but that doesn’t mean I’m not using my other cards. It just means I pay off my balance to $0 before statement cuts except for one. That way the lender themselves know I’m using their card based on internal systems.

Re: AZEO Method

SouthJamaica — Sun, 02 Feb 2020 16:19:10 GMT

@Anonymous wrote:
@KLEXH25

So its not practical to do it all the time? My application for a mortgage will probably be around June or July, depending on how effective this method will be. I was planning on implementing it from now until then for the best results. Is that something I should avoid doing, in your opinon?

It's practical to do it now.

Re: AZEO Method

Anonymous — Sun, 02 Feb 2020 16:28:42 GMT

@Anonymous wrote:
I’ve been letting my accounts report AZEO for some time now, but that doesn’t mean I’m not using my other cards. It just means I pay off my balance to $0 before statement cuts except for one. That way the lender themselves know I’m using their card based on internal systems.

Yep, and you'll have an annual summary showing the yearly totals.

Re: AZEO Method

KLEXH25 — Sun, 02 Feb 2020 16:44:22 GMT

It’s still early for your mortgage app, HOWEVER, since it can be a tricky technique, I would definitely start practicing now. I have tried to do it the past two months (just to see where my highest scores are at) and something always happens to screw it up, including some lenders not reporting every month. It’s best to learn any caveats now so that when it comes to mortgage time, you know which accounts should be zero and which lenders you can count on to consistently report.

Re: AZEO Method

Anonymous — Mon, 03 Feb 2020 04:43:23 GMT

@Anonymous The newer models are not used for mortgages to begin with. Secondly only vantagescore uses trended data and no major lender other than synchrony uses it that we are aware of. A mortgage lender is not going to say you’ve got too little debt and too many accounts at zero. Oh your DTI is too low! And besides with some lenders reporting trended data they see the payments made each month, so anyone can see they are being used if that data is reported.

Re: AZEO Method

Anonymous — Mon, 03 Feb 2020 04:55:13 GMT

@Anonymous wrote:
@AnonymousThe newer models are not used for mortgages to begin with. Secondly only vantagescore uses trended data and no major lender other than synchrony uses it that we are aware of. A mortgage lender is not going to say you’ve got too little debt and too many accounts at zero. Oh your DTI is too low! And besides with some lenders reporting trended data they see the payments made each month, so anyone can see they are being used if that data is reported.

I know they don't say those things, but covering "that we are aware of" is something I always do, because there are always surprises that surface later. When it's of little effort, I certainly do it. There has just been too many times in my life where, "man, I'm glad I did that, who knew that would have made a difference" moments happen. This is of small consequence, but for some of these situations in my life would have been life changing.

We're talking a few points here. It may have 0 impact on a mortgage interest rate.

Re: AZEO Method

Anonymous — Mon, 03 Feb 2020 10:22:57 GMT

@Anonymous But we’re talking about mortgages here. We know for a fact what models are used for mortgages and if that changes it will be huge news and everyone will know.

Re: AZEO Method

Anonymous — Mon, 03 Feb 2020 12:42:41 GMT

@Anonymous wrote:
@AnonymousBut we’re talking about mortgages here. We know for a fact what models are used for mortgages and if that changes it will be huge news and everyone will know.

I know. But mortgage lenders do use FICO 8, which may be different from other versions of FICO 8. But FICO 8 uses "credit card usage" in at least some of their versions. I don't know what credit card usage means (the last reported balance of each card, the last 12 reported balances of each card, etc.?)

Do we know for sure if that's not used for mortgage scoring? Can you tell me that is a guaranteed no? What about FICO 9, 10? 10 might not be available by June and if it is, its probably scarce by then.

If it were me, I wouldn't care about AZEO or squeezing out a few points. But some people need to do it. All I am saying is that if I had to squeeze points, I would do everything I could, taking NOTHING for granted.

Re: AZEO Method

Anonymous — Mon, 03 Feb 2020 16:46:08 GMT

@Anonymous Well, maybe we can easily clear all this up. Usage (in fico algorithm terminology, not CMS front end terminology) means you have at least one balance on one revolving account and have at least six months of payment history.

That’s what fico usage means. And if you don’t have a balance on at least one card then you’re going to get the negative reason code for no recent “usage” and you’re going to take the penalty of 10 to 20 points depending on scorecard.

FICO 10 T could be available tomorrow, it’s still not going to be used for mortgages tomorrow. The adoption is a slow process and when it happens we will know about it, when they start reviewing it, we will know about it, when they start considering it we will know about it.

If we’re trying to help people that are trying to get mortgages right now, then we need to use the algorithms that the mortgage lenders are going to use for these people. FICO 10 T is totally irrelevant to that. Vantagescore is irrelevant to that.

We’re trying to help somebody prepare for a mortgage here, and they’re planning to do this soon not 5 or 10 years down the line when those hypotheticals may apply.

Re: AZEO Method

Anonymous — Mon, 03 Feb 2020 17:25:03 GMT

@Anonymous wrote:
@AnonymousWell, maybe we can easily clear all this up. Usage (in fico algorithm terminology, not CMS front end terminology) means you have at least one balance on one revolving account and have at least six months of payment history.

That’s what fico usage means. And if you don’t have a balance on at least one card then you’re going to get the negative reason code for no recent “usage” and you’re going to take the penalty of 10 to 20 points depending on scorecard.

FICO 10 T could be available tomorrow, it’s still not going to be used for mortgages tomorrow. The adoption is a slow process and when it happens we will know about it, when they start reviewing it, we will know about it, when they start considering it we will know about it.

If we’re trying to help people that are trying to get mortgages right now, then we need to use the algorithms that the mortgage lenders are going to use for these people. FICO 10 T is totally irrelevant to that. Vantagescore is irrelevant to that.

We’re trying to help somebody prepare for a mortgage here, and they’re planning to do this soon not 5 or 10 years down the line when those hypotheticals may apply.

In FICO 8, they put more weight on credit card usage than with the older models. Here's the problem. We don't know exactly how much weight, or how they are determining credit card usage. FICO 8 also incorporates trending data, but its not clear that credit card usage is part of the trending enhancement or how it is integrated with the trending history, if at all. There is a lot of work to capture and store the information and develop an algorithm in order to use it for trending. Now that this data is available, they can modify their analysis of credit card usage to be more thorough. They could have overhauled credit card usage altogether, or maybe they didn't touch it at all, just put more weight on it. Who knows. If we knew for sure how it works exactly, then we could adjust spending and reporting to maximize it.

The FICO 10 mention was just to highlight that things are changing dramatically. FICO 9 has its own enhancements. And we don't know the underlying details of any of these models.