AZEO Method

[Anonymous]

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.

[SouthJamaica]

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@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?

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It's practical to do it now.

[Anonymous]

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@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.

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

[KLEXH25]

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.

[Anonymous]

@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.

[Anonymous]

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@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.

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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. 

[Anonymous]

@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.

[Anonymous]

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@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.

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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. 

[Anonymous]

@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.

[Anonymous]

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@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.

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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.