Question on CC reporting and Utilization

[Anonymous]

Great input. Thank you so much. I was thinking the same, did something else occur that caused this drop. Could not find anything that stood out, but going to go through this again with a fine tooth comb and see if I can figure it out. Funny thing is, 2 cards reported on my husbands the following month and he too had a big score drop among all 3 bureaus. Again, usually only let one card report a small balance, but slipped up both these times. They were such small reporting balances it just didnt make sense, but I will take your advise and dig a bit deeper to see if something else triggered this.

[Anonymous]

Yes, wont be relying on CK for the utilization scores anymore, I see your point. Thank you.

[Anonymous]

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@Anonymous wrote:

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I agree with BBS and would strengthen his observation even more.  The problem is not only with Credit Karma's summary page, there is a risk in relying on any credit monitoring service's "summary" page.  For example, Credit Check Total is a great service and it provides true FICO 8 scores.  Nevertheless, I am almost sure that some people have written in with the same confusion about CCT.  The person says that his utilization is 0%; we tell him it is really 1%; and he says that he's checked and CCT says it is 0%.  I am guessing that CCT's summary software rounds to the nearest percent (thus 0.48% util would read 0% and 0.51% util would read 1%).rather than always rounding up, as the actual FICO algorithm does. 

Karma is otherwise a great service -- free credit reports and Vantage scores as often as once a week.  Woo-hoo!  But don't rely on its summary page (including what it says about age factors) and carry that general skepticism about summary pages with you any time you use a CMS.

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CGID is correct with respect to summary pages from different monitoring services.  They are often over simplified and don't necessarily represent data that is relevant to FICO scoring.  Reason codes are the same way.  There have been multiple posts on the forum in the last month or so with people citing contradicting reason codes.  One bureau will tell you that a certain factor is helping your score while another will say that it's hurting your score.  Certainly, they both cannot be correct  

[Anonymous]

Yes, I have seen that myself, confusing. 

[SouthJamaica]

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@Anonymous wrote:

Hi Everyone !!

I have been on here, on and off for over 2 years and seemed to have lost my way on reporting cc's a bit here. Was in the low 700's a few months ago and then rec'd a big drop of approx 20 points across the 3 bureaus for 2 cards reporting at the same time, I have yet to recover from it with just one card reporting a small balance and the others reporting 0.

Here is my question. I have 5 cards. All now report and have for the last few months at -0- when the statement cuts, except one of which I report a small balance of around 10.00. This card is my Cap 1 which has a CL of 11,500.00. So my utilization is reporting 0. I know this is not good, I need to have this come up to between 1 and 3%. Not sure what to do. If I report say 2% of that one Cap card, that would be $230.00, so now as I have seen in the past it will show a balance increase of which I will be dinged for. What is the best way for me to report this one card? Do I report this 2% amount and each month just keep decreasing the balance reporting by a certain amount. Just so confused.

Heading for a mortgage in about 6 months, so trying to get the scores up.ll

Actually wanted to post this in Rebuiding credit. Not sure how to delete this post. Reposted in Rebuilding Credit.

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It's ok for your overall revolving utilization to be rounded down to 0%. No adverse effect from that. With 4 cards reporting zero and 1 reporting $10 you're fine as far as credit card utilization goes.

[Anonymous]

Okay, so I dont need to increase the reporting balance then and just always report 10.00 a month on that on card?

[Anonymous]

As BBS has explained, FICO always rounds your utilization up.  Always.  So does Vantage Score.  They are the only two scoring algorithms that matter.

Thus, if your utilization is 0.02%, it is being rounded up to 1%.  Nobody is rounding it down to 0% -- except some piece of summary software on a web site.  The summary software doesn't matter.  What matters is what the actual scoring algorithms do.

So yes, if you have a small balance on one card, then you are good to go.  A few caveats:

FICO sometimes ignores a positive balance if it is on a charge card.  So you want to be sure that the positive balance is on a true credit card.

FICO sometimes ignores a positive balance if it is on an AU card.  So you want to be sure that the positive balance is on a credit card in your name, not an AU card.

FICO sometimes ignores a positive balance if it is ultra tiny.  So make sure it is $5 or more.

FICO sometimes ignores a positive balance if it is on a card with a HUGE credit limit.  So I would make sure the card with the positive balance has a credit limit < 30k.  (A higher CL may be ok too, but if you really need to be safe why not make it a smaller CL card?)

Final thought: the rounding up thing happens for any utilization percent.  Thus, if you have a utilization of 9.001%, FICO will treat that as a util of 10%.  That's why you will see people sometimes say that you want to make sure your util is < 8.99%.  Because if it just a few dollars higher, FICO might treat that as 10%.

[Anonymous]

Wonderful information from all of you. Thank you so much. I now have a clearer plan and do plan on changing the reporting cards up to one with a lesser limit, like the Discover, to see what that affect might be. Also will begin the dig to find out why my scores took a dive a few months ago after those 2 cards reported, I agree, I think it was more than just 2 cards reporting a small balance, nothing standing out, but there must be something there. Thank you again !!! Happy Holidays.   

[Anonymous]

Update. Increased my Cap 1 reporting to 116.00, waiting to see what happens.  Also ordered credit reports to see what changes might have happened in Sept. to see what might have caused this score drop, other than 2 cards reporting a small balance as the cause of this. I did check my 3b report that I ordered in November after this happened and still see no real cause for this point drop across all three CRA's.   Question, is it possible it was a rebucket situation?  Most new CC's aged their 2 year mark in October, on both mine and my husband's. We both had this significant drop in scores in October.  We are post bk now about 2 1/2 years. So wondering if maybe these cards hit a 2 year mark in October, changed the AAOA, changing the FICO scorecard, causing the drop. Just a thought.

Here is the drop that occurred.

9/19/2016  Alert:  Eq: From 718 To 696,  Reason Alert: Balance increase of 384.00

9/18/2016 Alert:   TU: From 700 To 682,  Reason Alert: Bankcard Balance Change

9/18/2016 Alert:    Exp. From  705 To 685   Reason Alert: Balance increase of 384.00

Again, this was from reporting 2 balances, which I should have recovered from by now.   Worked so hard after Bk was closed over 2 years ago and to see those scores drop so much and not recover is concerning me.

[SouthJamaica]

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@Anonymous wrote:

Hi Everyone !!

I have been on here, on and off for over 2 years and seemed to have lost my way on reporting cc's a bit here. Was in the low 700's a few months ago and then rec'd a big drop of approx 20 points across the 3 bureaus for 2 cards reporting at the same time, I have yet to recover from it with just one card reporting a small balance and the others reporting 0.

Here is my question. I have 5 cards. All now report and have for the last few months at -0- when the statement cuts, except one of which I report a small balance of around 10.00. This card is my Cap 1 which has a CL of 11,500.00. So my utilization is reporting 0. I know this is not good, I need to have this come up to between 1 and 3%. Not sure what to do. If I report say 2% of that one Cap card, that would be $230.00, so now as I have seen in the past it will show a balance increase of which I will be dinged for. What is the best way for me to report this one card? Do I report this 2% amount and each month just keep decreasing the balance reporting by a certain amount. Just so confused.

Heading for a mortgage in about 6 months, so trying to get the scores up.ll

Actually wanted to post this in Rebuiding credit. Not sure how to delete this post. Reposted in Rebuilding Credit.

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You are misreading the situation. Your present credit card reporting is fine. It's an optimal credit card utilization regiment for all your FICO scores, so no change needs to be made on credit card utilization.

If you tell us about other things in your report, installment loans, negatives, inquiries, new accounts, etc, we can possibly find areas for you to work on.