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Should I forget about AZEO & just apply?

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Anonymous
Not applicable

Re: Should I forget about AZEO & just apply?


@CreditInspired wrote:


If you only have the 5 CCs, please do not let them all report $0 or you will see a drop in scores. AZEO is “all zero except one” and that one preferably beween 2-5%. 


I think he means that across his 5 cards he plans on being at AZEO (1 with a non-zero balance), not "AZ."

Message 21 of 40
Anonymous
Not applicable

Re: Should I forget about AZEO & just apply?


@CreditInspired wrote:

@Anonymous wrote:

@Anonymous wrote:

I'm always conservative when it comes to this type of stuff and always think it's a best practice to position your profile in the best possible light prior to any app.  That being said, it seems waiting a bit to maximize your profile would be the wisest decision.


I agree with this. It can't hurt. This is exactly why I'm waiting for my 5 cards to be AZEO as of May 24 before I apply for the "pre-approved" CSP. And I've been a Chase banking customer for years and receive my full direct deposit into my checking account and have a savings account with them.


If you only have the 5 CCs, please do not let them all report $0 or you will see a drop in scores. AZEO is “all zero except one” and that one preferably beween 2-5%. 


I know what AZEO means. Sorry for any confusion.

Message 22 of 40
Anonymous
Not applicable

Re: Should I forget about AZEO & just apply?


@Anonymous wrote:

@CreditInspired wrote:


If you only have the 5 CCs, please do not let them all report $0 or you will see a drop in scores. AZEO is “all zero except one” and that one preferably beween 2-5%. 


I think he means that across his 5 cards he plans on being at AZEO (1 with a non-zero balance), not "AZ."


Exactly.

Message 23 of 40
Anonymous
Not applicable

Re: Should I forget about AZEO & just apply?

AZEO,  drop in score ? pls give a lttle more info


@Anonymous wrote:

@CreditInspired wrote:


If you only have the 5 CCs, please do not let them all report $0 or you will see a drop in scores. AZEO is “all zero except one” and that one preferably beween 2-5%. 


I think he means that across his 5 cards he plans on being at AZEO (1 with a non-zero balance), not "AZ."


 

Message 24 of 40
Anonymous
Not applicable

Re: Should I forget about AZEO & just apply?

If all of your cards report a $0 balance your score will drop because you're not utilizing any credit.  

 

AZEO  is really only meant to be a tool for when you're preparing to buy somehting big or shoot for that goal CC and need every extra point you can spare to get an approval with the best terms.  Otherwise for day to day it's overkill to manage.

Message 25 of 40
Aim_High
Super Contributor

Re: Should I forget about AZEO & just apply?

@heavylifter   "...AZEO,  drop in score ? pls give a lttle more info."

@CreditInspired wrote:  "...If you only have the 5 CCs, please do not let them all report $0 or you will see a drop in scores. AZEO is “all zero except one” and that one preferably beween 2-5%."

 

@ CreditInspired was distinguishing between AZ (All accounts at zero) versus AZEO (All Zero Except One).  FICO wants to see consumers USE the credit they have so they can show they are using it responsibly.  Therefore, FICO models penalize you some for not using any of your cards at all, so having all cards report 0% utilization will pull down your scores a little. This is a secondary factor, so it's not a huge drain on your score, especially in the short term, but it does happen.  On the other hand, if you are using a VERY VERY SMALL percentage of your available credit, you tend to get a bump up in your scores. 

The AZEO technique is pay off all but one card BEFORE the statement  issue date so that the 'balances' reported to the credit bureaus only show one card with a balance.  (Of course, you can also just use one card in that month after all other balances are paid down to make this easier to manage.) 

That reported balance should show very low utilization.  Benefits start to occur at as high as 9% UTI on that one account but the ideal is to get it down to less than 1%, but not a zero reported balance.  I have read that the minimum amount some card companies report as a balance is sometimes $2 or $3, so keeping a few dollars on the balance is best.

Some people get confused and think AZEO means you are carrying a balance and paying interest.  Paying interest has nothing to do with it.  This method doesn't suggest you leave a few dollars on your account from PREVIOUS months statements.  It's about using the information reported once a month to the credit bureau to your advantage.  It's about lowering your utilization on one account as well as overall. 

For the best response from this method, don't shoot for just 1% utilization.  On a $10K credit card, there is a big difference in 1% UTI ($100) versus having just a few dollars.  (Many of us have even higher CL's which means 1% UTI indicates a slightly higher debt.)


Business Cards


Length of Credit > 40 years; Total Credit Limits >$850K
Top Lender TCL - Chase 156.4 - BofA 99.7 - AMEX 95.0 - CITI 94.5 - NFCU 80.0
AoOA > 30 years (Jun 1993); AoYA (Aug 2023)
* Hover cursor over cards to see name & CL, or press & hold on mobile app.
Message 26 of 40
longtimelurker
Epic Contributor

Re: Should I forget about AZEO & just apply?


@Anonymous wrote:

If all of your cards report a $0 balance your score will drop because you're not utilizing any credit.  

 

AZEO  is really only meant to be a tool for when you're preparing to buy somehting big or shoot for that goal CC and need every extra point you can spare to get an approval with the best terms.  Otherwise for day to day it's overkill to manage.


Right, overkill both in time but, IMO more importantly, in opportunity cost.   You are giving up the free float on all but one card.

Message 27 of 40
Fated4Credit
Regular Contributor

Re: Should I forget about AZEO & just apply?


@Aim_High wrote:
 
 " ... Another reason why I'm anxious to get the card is that my friend just got approved for the CFU ..."
 
Ahhhh ... and now we know the "rest of the story" as Paul Harvey used to say.
Nothing like a little peer pressure to push us over the edge.
As someone said, don't compare your credit situation to others.  There are too many variables and we tend to forget the differences in the situations.
I agree with the advice above to follow your gut instinct:  W A I T ....
From my observations and experience, Chase can be a pickier lender.  If you want a better starting limit and establishing a stronger relationship with them early-on, I think it's best to wait until you have a thicker file and higher scores.  Are there other cards you've considered in the interim?

 

So u think June would be too soon, unless I decided to wait until my Discover it card (my current youngest card) was 2 years old in November, I don't think I could wait that much longer to be honest. Besides the CFU, I have considered the  2% PPMC as a replacement for the pc'ed Cap 1 QS which is bracketed card anyways. I'll be lucky if I get pass $3000 in the next year or so. I thought about applying for the CFU & PPMC at the same time so that they could age together, but unfortunately since the FU is 3% CB I'm afraid I wouldn't be able to put adequate spend on the both of them. So was thinking of waiting 6 months before I decided if I was going to app for the PPMC @ the end of the year.

 

Also I currently do not have a Paypal account, I've never had use for it before with the places that I shop online, however since my Discover card will have 5% CB on restaurants & Paypal July - September, I thought it would be a good way to test it out. At least I would have my account for a few months as I'm not sure if Synchrony will take issue with me making the account & apping for the card @ the same time.

Discover: $15,900
Cap One QS: $4811
CFU: $8,000
PPMC: $12,000
US Bank Cash+: $13,000
Penfed Powercash Rewards: $7,500
AAOA: 3.5 yrs
Experian (Fico 8) 756
Transunion (Fico 8) 757
Equifax (Fico 8) 764
Message 28 of 40
Aim_High
Super Contributor

Re: Should I forget about AZEO & just apply?

@Fated4Credit

I was suggesting you wait a lot longer than just June or even November.  Your AAoA is a little under two years and your AoOA is just over two years.  You still have a very young credit history in the grand scheme of things.  I still think adding another lower tier card to your file or going to the ‘garden’ for awhile might be best.

 

I can tell you have the ‘itch’ but sometimes that can lead us to do impetuous things that aren’t to our best advantage.

 

Of course, I can’t guarantee you that the rich 3% cashback on Freedom Unlimited card will be there later.  But I still think building a longer, thicker history before applying to Chase will greatly increase your odds of getting approved and getting a decent starting limit.  Keep in mind that you are establishing a precedent with them when you open your first account. 

 

From what you’ve said, I think your best short-term options are opening a PayPal account to use that with your existing Discover as well as maybe opening the PPMC account to take advantage of the 2% cash back.  I don’t have that card but it’s underwritten by Synchrony and I believe they might like your file better than Chase.

 

You can’t take advantage of every great SUB.  However, if you’re going to kick yourself for missing out on the FU 3% first year, you may need to do it sooner rather than later.  Chase often changes their promotions and they don’t last all that long.  The bad thing could be that you waste a hard pull, get turned down by Chase (which now they know internally they’ve turned you down before), or that you get approved but with a very low credit line that you’re not happy with.   You have to be prepared for whatever the results if you choose to apply early for any card.


Business Cards


Length of Credit > 40 years; Total Credit Limits >$850K
Top Lender TCL - Chase 156.4 - BofA 99.7 - AMEX 95.0 - CITI 94.5 - NFCU 80.0
AoOA > 30 years (Jun 1993); AoYA (Aug 2023)
* Hover cursor over cards to see name & CL, or press & hold on mobile app.
Message 29 of 40
Fated4Credit
Regular Contributor

Re: Should I forget about AZEO & just apply?

@ Aim_High: I've thought about getting the PPMC in exchange for the CFU just because I heard it would grow easily even if I did happen to get a not so great sl & clis are SPs. I would like a card to outgrow the Cap 1, as well as general spend & with the discover & PPMC it might felt the bill until I'm ready to app for Chase.

I said in my OP that I didn't receive any pre-quals for the CFU, but ironically enough within the last year I did receive 2 pre-approved mailers for the old SUB of 150/500 spend but it was always bad timing to app. First I was carrying a balance on a 0% apr promo for disco, then when that ended I wanted to get the score boost for my youngest card reaching a 1 old. The last prequal was in Feb but my util was high @ that time.

Now I feel even more conflicted cause its not just about doing the AZEO method as much as deciding to possibly put off apping for another year for the CFU continue grow my limits on my current cards maybe getting the PPMC in June to help with that (& SD my cap 1 card sooner rather than later can't try for another increase from them until September, last one was $150 in March).


Discover: $15,900
Cap One QS: $4811
CFU: $8,000
PPMC: $12,000
US Bank Cash+: $13,000
Penfed Powercash Rewards: $7,500
AAOA: 3.5 yrs
Experian (Fico 8) 756
Transunion (Fico 8) 757
Equifax (Fico 8) 764
Message 30 of 40
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