@Remedios wrote:OP is applying for a mortgage either this week or the next week.
AZEO is the best option given the fact they're rebuilding and every point counts.
Additional accounts with balances eat those points.
As far as closing, once your mortgage ordeal is over and you qualify for a better cards down the road, close it if they won't budge. No need to carry rocks in your wallet.
Is there any actual proof a zero balance on all but one card yields better scores than say, a balance of less than 1% of any given card's limit? I ask because I've done both and have seen exactly zero change in my scores.
@Anonymous wrote:
@Horseshoez wrote:Is there any actual proof a zero balance on all but one card yields better scores than say, a balance of less than 1% of any given card's limit? I ask because I've done both and have seen exactly zero change in my scores.
I'm not sure I understand your question, so hopefully Remedios does. All zero balances with just 1 reported small balance on one major bank card is what ensures score optimization. That doesn't mean that score optimization can't be arrived at other ways (more than 1 balance, a higher balance, etc) depending on profile. AZEO is just the simple way/suggestion to guarantee optimization.
Also not all balances of any given percentage are created equal, as not all limits are equal. A less than 1% balance on a $500 limit card could be $4. A less than 1% balance on a $60,000 limit card could be $575. Depending on scoring model and/or scorecard assignment of the profile in question, it's possible that the $575 balance relative to the $4 balance could produce a lower score.
All of your points are understood. My question is, those who are adherents of AZEO speak of it in almost mystical terms as the absolute be all to end all means of improving one's credit scores. Maybe it's just me, but I have yet to see a single shred of evidence supporting that notion.
Bringing this back full-circle to @wvasweetness's original post, I seriously doubt the $5.00 monthly fee will make one shred of difference in reported credit scores.
@Remedios wrote:
@Horseshoez wrote:
@Remedios wrote:OP is applying for a mortgage either this week or the next week.
AZEO is the best option given the fact they're rebuilding and every point counts.
Additional accounts with balances eat those points.
As far as closing, once your mortgage ordeal is over and you qualify for a better cards down the road, close it if they won't budge. No need to carry rocks in your wallet.
Is there any actual proof a zero balance on all but one card yields better scores than say, a balance of less than 1% of any given card's limit? I ask because I've done both and have seen exactly zero change in my scores.
If you're saying that older models do not change when all of your cards report a balance, you'd be the first one.
As far as proof, I'm not really certain what you'd consider a proof.
If me staring at my reports for years constitutes a proof, here it's how it works for me...
On my profile difference, between one card reporting and seven cards reporting on EX2 is more than 30 points.
Utilization percentage (individual/aggregate) and number of accounts with balances are two different scoring metrics.
If you are talking about Fico 8 classic, AZEO doesn't yield quite the same result, my score does not change until 4th or 5th account reports a balance, depending on CRA.
Might squeeze a few points on a clean file, not sure about dirty files.
AZEO in preparation for mortgage (pretty dang big step), and AZEO for no reason aren't really synonymous.
If you wish to discuss scoring intricacies further, feel free to start a thread in UFS.
AZEO is a shorthand to simply communicate that getting one card to a low utilization ( and by extension all cards to low utilization ) will help scores. For us skeptics of AZEO, the scenario of AZE2 with 1% utilization on both cards should yield the same score, on all models. It would be helpful to use existing threads in Understanding Scoring, but also nice if AZEO proponents acknowlege the fundamental reason AZEO is repeated - that reason being it gets the cardholder to Low Utilization.
In OP's position it sounds like it's a AZE2 situation, with this Capital One card less than 1% ( $5 of $750 limit ) and while it is educational to understand about push payments and other tricks to get to AZEO, that effort, vs AZE2, is unlikely to bring any additional joy when the OP's mortgage app is submitted.
@cashorcharge wrote:
@FinStar wrote:If the monthly fee is predictable (i.e. billed on the cycle date - which are now variable dates), pay it advance directly from your bank. In other words, push the payment from your FI.
So I need to say...this makes sense but it wasn't my first thought. I was thinking...buy something for $60, then pay the bill the next day so it's ZERO then take the $60 item back to the store, get a credit back to your account. Then you'll close with a $60 Credit Balance that was returned from the retailer and your covered for 12 months!
This is your first thought?
You realize OP is looking for a method to apply month after month after month? And that a merchant is involved in this method? And two trips to a store that OP might have other legitimate business with?