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Another AZEO question?

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HeavenOhio
Senior Contributor

Re: Another AZEO question?

AZEO applies to cards only.

For loans, it’s the total balances on all loans compared to the total of the original loan amounts that matters — with the exception that some feel that there might be an earlier scoring break on mortgages.

I’d suggest AZEO on your cards if you deem it to be necessary or if you think a stop at AZEO is useful for testing.

With loans, I’d simply go with the flow unless you have the luxury to keep a loan around with a low balance for a while.
Message 11 of 28
Yeliaba1
Frequent Contributor

Re: Another AZEO question?

Thanks!!  I misinterpreted that everyone at AZEO had installment loans reporting below 8.9% as well.

 

@ Heaven thanks!!  While I could pay the loan off, I’ve got a thin file so I’ll let that loan go to term for the age.

Message 12 of 28
Anonymous
Not applicable

Re: Another AZEO question?

AZEO refers to cards. All Zero Except One.
Message 13 of 28
Revelate
Moderator Emeritus

Re: Another AZEO question?

Yeah just CC’s only but it sadly appears that some older models (before FICO 8) work on accounts rather than revolvers... that we seem to recently be finding out is a lot harder to fully optimize but the premise is the same since most people can’t play reindeer games with their loans.

Also the bottom breakpoint for installment utilization is explicitly 8.9%; there is a higher one but it is around 70%... I know from my original testing there was nothing between 50 and 18% for installment: aggregate revolving has a lot more breakpoints.



        
Message 14 of 28
Anonymous
Not applicable

Re: Another AZEO question?

Aren’t there different percentages for optimization at each bureau on classic eight? Do we know what those percentages are?
Message 15 of 28
Revelate
Moderator Emeritus

Re: Another AZEO question?


@Anonymous wrote:
Aren’t there different percentages for optimization at each bureau on classic eight? Do we know what those percentages are?

EX / TU FICO 8: 1/2

EQ FICO 8: 1/3 and 1/2 

 

Tested that twice, believe it holds for all scorecards but there's been some dissenting data on it.  I haven't walked my balances up to 100% reporting, may do that between the AAOA 5 years and 5.5 years on Experian, probably about time I charged something on my SD'd cards anyway.

 

But yeah for EQ FICO 8 minimum would be 4 revolvers if you really want to be hardcore about it but EQ at 1/2 matched the point loss as EX/TU at 1/2, and frankly the point values were so small it really wasn't much even on a clean file I lost like -8 points.

 

Matters when your credit score really matters like mortgage application or maybe auto loan but won't hurt otherwise when we're talking credit card underwriting.

 

Speaking of mortgages, I'm a little worried the models used in a mortgage might be 20% (1/5) accounts with balances as that's when I managed to push the reason code off EX FICO 2, and given the mortgage scores are truly the ones worth optimizing for people may need to pick up a lot more to optimize that, which would suck incidently.  Need to run the experiment again once my auto loan is paid off sometime after finding the top installment breakpoint... too many things to test, too little time.




        
Message 16 of 28
Anonymous
Not applicable

Re: Another AZEO question?

Yes, I read the thread where you were questioning the 20% line on EX2. Definitely maters more there!

Forgive me, but I don't quite understand. I'm assuming your answer means to optimize at EX/TU, one needs to have less than 1/2 of their open accounts with a positive balance? But I don't understand 1/3 and 1/2 at EQ. Please explain.
Message 17 of 28
Revelate
Moderator Emeritus

Re: Another AZEO question?


@Anonymous wrote:
Yes, I read the thread where you were questioning the 20% line on EX2. Definitely maters more there!

Forgive me, but I don't quite understand. I'm assuming your answer means to optimize at EX/TU, one needs to have less than 1/2 of their open accounts with a positive balance? But I don't understand 1/3 and 1/2 at EQ. Please explain.

FICO 8 from all my testing is on revolvers.

 

Sorry, 1/2 = 50%, 1/3 = 33.3%, I just short-handed with fractions and didn't explain all that well.

 

On EQ there are lines at both 33.3% and 50% revolvers reporting a balance.  On EX/TU there is only one line at 50%, but the 50% line on all three were virtually identical score drops for me (EQ was same with 2 drops, others just 1).  I lost about half the total drop at the first breakpoint on EQ.




        
Message 18 of 28
Anonymous
Not applicable

Re: Another AZEO question?

No my installment loan is only 30 percent paid off.
Message 19 of 28
Anonymous
Not applicable

Re: Another AZEO question?

Yes I understood the fractions, just was puzzled at 2 lines. and doesn't it count include installment loans? For example if I had 2 loans, wouldn't I need 5 CCs to optimize? 3/7 accounts with a balance, therefore being under the 50% demarcation line? Or do I misunderstand?
Message 20 of 28
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