Credit Book

[CreditBob]

I thought that this part of the myfico forum would be appropriate for this topic. Since 1999 I have studied the credit bureaus, Fico scoring system, & the risk codes that are implemented into the algorithm for calculating the score. The one thing that has always bothered me from day one is that there are no specific examples so that the appropriate solution be cared out. The information that is out there is too vague. For example others in the credit industry are telling others to keep a revolving balance no higher than or below 30%. The actual fact is the closer that you can get to a 0% utilization, but not paying off the entire balance will give you a higher Fico score. In other words, leave a balance of $ 1-5 dollars. If you have more than one credit card, for example 3, then payoff two in full & leave the very small balance on the third account. By doing so you eliminate the risk code, too many revolving accounts with balances, which will not have another adverse effect on your score.

I am seriously considering writing a book that gives different scenarios with the appropriate solution(s), including the credit risk codes. By doing so will give each person the knowledge to help achieve their goals of a higher credit rating. I would like to ask everyone for feedback on this. These forums were so that we can help each other out with our personal experiences. I have been through many different personal situations including bankruptcy, collections, inquiries, disputes, etc. So I wanted to share with others the correct information because as of now the credit industry will not go into specifics.

[takeshi74]

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@CreditBob wrote:

The information that is out there is too vague. For example others in the credit industry are telling others to keep a revolving balance no higher than or below 30%. The actual fact is the closer that you can get to a 0% utilization, but not paying off the entire balance will give you a higher Fico score. In other words, leave a balance of $ 1-5 dollars.

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The info is out there.  No one here and on other credit sites claims that 30% is ideal.  It is only a suggested maximum.  It is commonly discussed that ideal is much lower and that to optimize, one may want to allow only one balance to report at 10% or less.  Whether or not having a very small balance of $2 or so is worth the effort or not is up to the individual to determine.  I personally don't bother with this as my FICO 8's are fine with me even with 3-6% reporting.

You want revolving utilization to generally be low but not 0 as there is a hit for having all 0 balance reporting on revolving accounts.

Additionally, you do not have to carry a balance.  You're conflating carry with report.  You want a balance of $X to report but you can pay every statement balance in full and still have a balance report.

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@CreditBob wrote:

I am seriously considering writing a book that gives different scenarios with the appropriate solution(s), including the credit risk codes. By doing so will give each person the knowledge to help achieve their goals of a higher credit rating. I would like to ask everyone for feedback on this. These forums were so that we can help each other out with our personal experiences. I have been through many different personal situations including bankruptcy, collections, inquiries, disputes, etc. So I wanted to share with others the correct information because as of now the credit industry will not go into specifics. 

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Go for it as far as writing a book if you want to pursue that.  Have you looked at what else is out there?  How would you promote it to get it to stand out from all the noise that's already out there?

However, attempting to cover every permutation isn't really a feasilble task.  It makes more sense IMO to cover the factors than to try to cover every possible situation.

[RobertEG]

The primary reason for the "vagueness" in providing specific examples of showing score implications of specific scenarios is that credit scoring algorithms are protected by their developers as trade secrets, and thus the cannot reveal sufficient details that would permit reverse engineering of their algorithms.

Businesses/inventors have the choice, after developing an algorithm with business use, of either obtaining a patent, which requires full public disclosure of how to make and use the algorithm, or preserving its operation as a secret, and thus potentially permitting its continued use forever if others cannot indepently produce it.

Fair Isaac chose the trade secret route, and thus will not divulge enough information to permit one to make and use the algorithm.

Consumers are free to share their own anecdotal experiiences, such as via forums such as this one, without violation of trade secret statutes, providing they to not improperly get their information from the business that owns the trade secret.  Anecdotal experiences, such as the best % util, is not specific, but is nonethless useful.