topic Re: AZEO in General Credit Topics

AZEO

Yasselife — Wed, 01 Sep 2021 13:50:57 GMT

I find AZEO too time consuming. Sometimes I feel to let all balances report and then pay in full after statement cut. Current overall utilization is <1%
My question is: would It be a problem letting 5cards out of 9 total report a balance without Lenders(in my signature) being spooked? I won't be applying until next year that I renew my car lease.

Re: AZEO

SUPERSQUID — Wed, 01 Sep 2021 14:04:33 GMT

If you have many cards reporting a balance it will trip a risk flag on your credit reports. i know this because it happened to me.

Re: AZEO

Yasselife — Wed, 01 Sep 2021 14:09:48 GMT

@SUPERSQUID That's what concerns me, because I recently added 2 new lines and scores dropped significantly but still on the green zone.
What would you consider *too many balances* under lender's eyes?

Re: AZEO

dragontears — Wed, 01 Sep 2021 14:25:53 GMT

@Yasselife wrote:
@SUPERSQUID That's what concerns me, because I recently added 2 new lines and scores dropped significantly but still on the green zone.
What would you consider *too many balances* under lender's eyes?

People on this forum obsess over AZEO too much most of the time.

I have cards from 4 of the 6 lenders you have and frequently let half my cards report a balance and have had no issues.

For me, as long as my utilization is low I don't think lenders care much about the number of accounts with a balance even though the FICO algorithm docks a few points for it.

Plus I personally believe that by letting my actual spend be reported it increases the CLI (and SL) I get as lenders try to coax me into using their card instead

Re: AZEO

SUPERSQUID — Wed, 01 Sep 2021 15:10:05 GMT

@Yasselife wrote:
@SUPERSQUID That's what concerns me, because I recently added 2 new lines and scores dropped significantly but still on the green zone.
What would you consider *too many balances* under lender's eyes?

I'm not sure what the threshold is but i had a small balance on a lot of different cards. also high amounts owed on loans can trip that red flag.

BTW - I never had the patience for that AZEO system

Re: AZEO

Yasselife — Wed, 01 Sep 2021 15:15:24 GMT

@SUPERSQUID I am tempted to convert my BCE into BCP and let my other cards rest on subscriptions.

Re: AZEO

tcbofade — Wed, 01 Sep 2021 18:49:49 GMT

Unless you plan to apply for something big, AZE0 isn't worth the effort.

If you are going to apply for a mortgage, it matters!

Otherwise, its not worth worrying about... and no, none of your existing lenders care if EVERY single account reports with a balance. If you start maxing them out, they'll care...

Re: AZEO

Taurus22 — Wed, 01 Sep 2021 19:36:23 GMT

@tcbofade wrote:
Unless you plan to apply for something big, AZE0 isn't worth the effort.

If you are going to apply for a mortgage, it matters!

Otherwise, its not worth worrying about... and no, none of your existing lenders care if EVERY single account reports with a balance. If you start maxing them out, they'll care...

I tend to agree with this for the most part. I have 10 cards, which most have specific cashback purposes. Monthly, the balances I keep on each card applies to that specific cashback category and nothing else goes on that card. So usually about 6-7 of my cards report balances anywhere between $50-450 depending on the level of spend for that category. I have all of my statements set to cut between the 1st-5th of each month, so when all of them cut they are PIF, rinse and repeat for the next month.

If I know I plan to apply for a new CC (or if my CLI cycle is coming up), I will plan a couple months ahead to pay balances down before statements cut and go to AZEO, in order to optimize my scores for approval chances. But I don't apply for new cards often (currently 16 mths in the Garden) so I'm able to plan easier than those who apply for new cards every 3-4 months.

But there's really no purpose for optimizing AZEO every single month unless you are just absolutely OCD about seeing your scores at their peak every month.

Re: AZEO

Yasselife — Wed, 01 Sep 2021 19:52:07 GMT

@Taurus22 Thanks for the info, and you may be right about the OCD thing. I like seeing AZEO on Mint app everyday; ended up converting to Amex BCP to get some peace; that and citi dc is all I need. Shopping doesn't happen often, traveling in my dreams only.

cheers

Yassel

Re: AZEO

calyx — Thu, 02 Sep 2021 18:49:43 GMT

All but one* of my accounts report "naturally," which is to say that I pay the statement balance of all of my cards** on the 27th of each month regardless of whether or not there are more charges (I get paid once a month and it's just easier for me to pay everything that day and not stress when the actual due dates are for my cards). MOST months, I have 8 cards reporting, but it can vary between 7-10 reporting depending on the quarters and what card I've used for what. I've never had any creditors get spooked. I even let a 95% utilization card post (for funsies) and no one seemed too upset about it. I keep my overall revolving Utilization 2-6% and I have two loans that are both ~50% (so also ~50 agg).

AZEO is a waste of time IMO, and I would only consider it if I need my mortgage scores to be maximized (FICO2 in the case of applying for something with a bank that uses it, or I might consider it if I ever got an actual mortgage). I definitely think it is over emphasized on the forums. If you need that kind of control over your spending/bills, that's fine, or need to eke out every point possible for a special application - I just don't think it should be recommended as much as it is. I think most people need to focus on budgeting and keeping a savings account funded for emergencies over AZEO, but this is myFICO not r/PersonalFinance. I honestly think that if you let them report 'naturally' (like the 8-10 accounts, I do), then they're less likely to "mind" when one reports high.

Exceptions:
* USB reports the balance on the last business day of the month, so I just pay the whole statement. It's used for 2 recurring bills, so it's on autopay and other than one miscellaneous charge that happened on the last business day (I bought a tshirt at the gym), is almost always reports 0
** I have one 0% card that I'm riding out that's on autopay, so that one isn't PIFed, but has negligible impact at 720/25000, honestly.

Re: AZEO

KatSoDak — Thu, 02 Sep 2021 20:34:58 GMT

@SUPERSQUID wrote:
If you have many cards reporting a balance it will trip a risk flag on your credit reports. i know this because it happened to me.

What exactly do you mean "trip a risk flag on your credit reports"?

Re: AZEO

Anonymous — Fri, 03 Sep 2021 13:33:43 GMT

@calyx wrote:
AZEO is a waste of time IMO, and I would only consider it if I need my mortgage scores to be maximized (FICO2 in the case of applying for something with a bank that uses it, or I might consider it if I ever got an actual mortgage). I definitely think it is over emphasized on the forums. If you need that kind of control over your spending/bills, that's fine, or need to eke out every point possible for a special application - I just don't think it should be recommended as much as it is. I think most people need to focus on budgeting and keeping a savings account funded for emergencies over AZEO, but this is myFICO not r/PersonalFinance. I honestly think that if you let them report 'naturally' (like the 8-10 accounts, I do), then they're less likely to "mind" when one reports high.

I think the big thing with the emphasis on AZEO is that most people come to the forums and ask "How can I get my score as high as possible for my upcoming application?", the easiest and most effective answer to that is AZEO. It optimizes number of accounts with a balance, it optimizes utilization, and it optimizes debt-to-income. I personally do not practice AZEO, I'm even in the middle of a mortgage application and I didn't implement AZEO, but if someone asked me for advice on how to improve their score AZEO is going to be one of the first recommendations I make. So that is why you see it emphasized so much, it combines several best practices into one concept and it is proven to improve both FICO8s and mortgage scores.

Re: AZEO

Yasselife — Fri, 03 Sep 2021 14:13:46 GMT

@Anonymous Azeo to me is more than optimizing scores. Azeo is the reason I have made all payments on time for 5yrs and raised to where I'm at, because of the control I get over the accounts. I will stick to that recipe specially if I have more than 5 lines.
I asked because I was concerned about how lenders would see multiple accounts with high exposure of credit report balances at one cycle. I can rest now after y'all responses that I shouldn't worry as long as uti is low and don't carry high balances while paying the minimum. I also learned that paying down should be consistent, circulating up and down on same balance can trigger AA.

Re: AZEO

calyx — Fri, 03 Sep 2021 16:19:30 GMT

AZEO for an application (as I mentioned) is totally reasonable - but I see the AZEO suggestion a lot in rebuilding in general.

I do think it can be beneficial to controlling finaces and getting into good habits (like being aware of where all of your cards stand), and if it works for you, I think it's great! That said, I still maintain there's nothing wrong with not doing AZEO. I'm currently at 9. I have ~3year history and so far no one is spooked.

Now, if you ask me about paying high interest on credit cards when you don't have to, I'll become a hard-liner

Re: AZEO

Yasselife — Fri, 03 Sep 2021 16:32:10 GMT

@calyx Thank you; that was an important question I had and I agree on avoiding to carry balances and pay exorbitant money on interest; I did slipped 2 yrs ago due to mental illness even having the knowledge of how this system works, but I have fixed most of the damage done; aside of a car lease I'll be debt free in a couple of months.
I'm off topic though This felt more like we were having a conversation more than getting an advice, lol. See you around

Re: AZEO

CreditInspired — Sat, 04 Sep 2021 12:33:52 GMT

@Yasselife wrote:
@SUPERSQUID That's what concerns me, because I recently added 2 new lines and scores dropped significantly but still on the green zone.
What would you consider *too many balances* under lender's eyes?

Definitely less than half of your cards (for me it's 1 or 2 & only on 0% APR cards); and those reporting should be less than 8.9%, especially if scores are your primary concern.

Re: AZEO

SouthJamaica — Sun, 05 Sep 2021 16:30:10 GMT

@Yasselife wrote:
I find AZEO too time consuming. Sometimes I feel to let all balances report and then pay in full after statement cut. Current overall utilization is <1%
My question is: would It be a problem letting 5cards out of 9 total report a balance without Lenders(in my signature) being spooked? I won't be applying until next year that I renew my car lease.

It's not a question of being spooked. No one will be spooked by a profile that's at less than 1% utilization.

However, you will have slightly better scores if the majority of cards report zero balances.

And it's an especially important factor in the mortgage scores; if you ever need to optimize those you should go to AZEO.