Credit scoring system is so rigged!

[Anonymous]

There were a total of 6 cards.  All the cards were around 95% usage. My overall DTI was at 68%.  Now it's only 10%.

[babbles]

so my utilization is %1 now but may go up to 8% so which way does my score go up or down?

[Anonymous]

? 

[Anonymous]

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@Anonymous wrote:

In reference to your other post, you paid off the loan

By paying it off while having another open loan, you probably increased your aggregate utilization (% utilized across all installment account)

 Without another other open loan you'd also lose the points along with more for credit mix

Also, something else may have changed in your profile, like revolving utilization % or % of accounts reporting a balance

Scoring isn't rigged as much as it wants to see low risk behavior; since it doesn't take into account income, it has to use utilization %. As you approach lower % utilized you pose a lower default risk on OPEN accounts.

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 My utlitization is now 10% 

[Trudy]

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@Anonymous wrote:

I have $0 credit card debt which hasn't reported as I just paid all $55k at once.  Hopefully that will bump it ☺️

Based on the high CC UTL you had you may very well see a score bump.  But keep in mind, all zero balances on revolving accounts incur a penalty as it interprets that as no use.  Now I agree that sucks but it has it's reasons.  Not sure how Vantage scores (Credit Karma) responds.  I think it likes all zero's?  But just so you know, all zero reporting create a penalty with FICO scores.

And Credit Karma and FICO do not respond the same so comparing the movement with Vantage in most cases will not mirror your FICO scores.  @AllZero provides upthread a cheap way to obtain your FICO scores so you can see what most lenders see and what is mostly studied and discussed in these forums.

If you get your FICO scores before all of your CC report zero it would be interesting to see what changes will occur with FICO after your zero balances report since your UTL was so high.  

Either way, as we often say, Finances over FICO scores.  So less debt is always better.  Congrats!

[Anonymous]

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@Anonymous wrote:

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@Anonymous wrote:

In reference to your other post, you paid off the loan

By paying it off while having another open loan, you probably increased your aggregate utilization (% utilized across all installment account)

 Without another other open loan you'd also lose the points along with more for credit mix

Also, something else may have changed in your profile, like revolving utilization % or % of accounts reporting a balance

Scoring isn't rigged as much as it wants to see low risk behavior; since it doesn't take into account income, it has to use utilization %. As you approach lower % utilized you pose a lower default risk on OPEN accounts.

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 My utlitization is now 10% 

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@Anonymous Congratulations first! Which utilization is it 10%? Revolving or installment? Because once your aggregate installment utilization hits 9% you can expect a nice increase. And as noted for your revolving you don't want everything exactly 0 you need at least a small balance reporting on one national bankcard.

[Anonymous]

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@Anonymous wrote:

There were a total of 6 cards.  All the cards were around 95% usage. My overall DTI was at 68%.  Now it's only 10%.

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@Anonymous DTI? Or utilization?

[Anonymous]

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@Anonymous wrote:

In reference to your other post, you paid off the loan

By paying it off while having another open loan, you probably increased your aggregate utilization (% utilized across all installment account)

 Without another other open loan you'd also lose the points along with more for credit mix

Also, something else may have changed in your profile, like revolving utilization % or % of accounts reporting a balance

Scoring isn't rigged as much as it wants to see low risk behavior; since it doesn't take into account income, it has to use utilization %. As you approach lower % utilized you pose a lower default risk on OPEN accounts.

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@Anonymous No, you don't lose the mix points when the loan closes. As long as you have a closed loan on your record, you have your mix points. What you lose is the bonus points that you have for low installment utilization! 😉 You get some around 65% and you get the big ones at 9%. 

[Anonymous]

My total debt will be only installment loan of a payment of $500 my yearly income is right at $101,500.  
As mentioned below all my credit card debt got paid off close to $56k and I paid off two installment loans close to $26k.  My credit score now is 650 and it's not yet showing all my CC being paid off. I have no baddies or collections.  I hope to see a 100 pt jump as my overall utilization went down. 

[Trudy]

Do you know your FICO scores?