Reported balances vs starting limit

[FicoMike0]

Ditto @Vinjints 

I think a typical min formula is current interest plus 1% balance.

As to the risk of carrying a balance, I still think utilization is a reasonable proxy. The risk is associated with carrying a growing balance, which results in high utilization. The downside, as we all know, is it paints a big spender who still pifs with the same brush. 

[BrutalBodyShots]

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@FicoMike0 wrote:

As to the risk of carrying a balance, I still think utilization is a reasonable proxy. The risk is associated with carrying a growing balance, which results in high utilization. The downside, as we all know, is it paints a big spender who still pifs with the same brush. 

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You said "carrying a growing balance." To carry a balance isn't the same thing as reporting a balance, which is the important distinction made earlier in this thread. High utilization means high reported balances, but it doesn't mean high reported carried balances. They are very different things. One equates to elevated risk, where the other equates to a low risk sure bet customer. Both may possess the exact same FICO scores (because yes, the algorithm cannot distinguish between the two... reported balances are reported balances) but issuers are going to probe deeper than that when they have the data at hand to allow them to do so.

[FicoMike0]

I agree with most of what you say. My point is, although you can have high reported balance and utilization without carrying a growing balance, the opposite is not true. The use of trended utilization with 10t and vs4 seems to improve the ability to detect risk. 

[BrutalBodyShots]

@FicoMike0 with TD the algorithm looks at the trend with utilization over 24 months. On organically reported balances of someone that always pays in full monthly, that trend will be flat... OR, actually downward. The reason for that is because those that exhibit Transactor behavior and heavily use their existing revolving limits are the ones that see the most lucrative CLIs. That then greater TCL on the same balances means lower utilization, organically, resulting in a downward trend over time.

Someone with 5-figures of reported revolving debt balances can still boast perfect FICO 10T scores.

[AndySoCal]

@BrutalBodyShots @SRT4kid93 @FicoMike0 @Vinjints @Thomas_Thumb   Not sure if every knows all that is included in credit trended data or not

The link below will help or refresh your memory

https://www.chase.com/personal/credit-cards/education/build-credit/what-is-trended-data 

[BrutalBodyShots]

My question from the above quoted article is how can TD include payment amount data if that data isn't provided to the bureaus by a given lender in the first place? I think the answer is it can't.

[AndySoCal]

@BrutalBodyShots @It is provided to bureaus.

[BrutalBodyShots]

@AndySoCal that's not true of all issuers. Go look at your credit reports from annualcreditreport.com right now and tell me which of yours report monthly payment data and which don't. 

FICO 10T just like any other model/version can only go off of the credit report data that it has as an input. F10T doesn't magically have access to credit report data that isn't there to begin with...

[AndySoCal]

@BrutalBodyShots  Here is a link to show that the credit bureaus have the data in question

https://www.experian.com/blogs/insights/what-is-trended-data/ 

Here is link that shows the credit trended data. This a credit reporting agency for lenders

https://www.advcredit.com/trended-credit-data/  

I think annual credit reports.com is owned by the credit bureaus. It is up to them as well as anyone producing a credit report what is displayed. Trended is not delivered in most credit reports due to cost reasons.

[BrutalBodyShots]

That link doesn't show that the bureaus have the information. You need to look no further than your actual credit reports to know what information is visible on them.

If YOU don't see payment amounts listed on your credit reports, an algorithm can't see them either and therefore they aren't being used in a score calculation.

I think you aren't understanding fundamentally how credit reporting actually works.