How is aggregate utilization actually calculated?

[Anonymous]

So I’ve got some conflicting info here that I’m hoping someone can clear up. I’ve read a bunch of posts about utilization and the general concensus is that unpaid charge offs COUNT towards aggregate UT. Now with that being said, when I pulled my reports yesterday from MyFico, the area that shows my aggregate UT is showing 48%, which is accurate when NOT COUNTING the unpaid charge offs. The report acknowledges that the unpaid charge offs exists under “past due” and also in the total amounts owed but mathematically, it doesn’t have them in the UT calculation on the report. 

In addition, when my LO pulled my 3B via Universal Credit Services, the aggregate UT on their calculation also didn’t count the unpaid charge offs. 

Is the UT calculation on the report only showing “open” revolving accounts? I’m a bit confused. 

[Anonymous]

Read Scoring Primer linked in my siggy.

[Anonymous]

@Anonymous  Thank You. I have read many posts, including your primer, in regards to UT. That’s where my concern was, it SHOULD be included in aggregate UT but on my report, it’s not. It is regularly updating though, every month. I’ve paid it off over 30 days ago but it hasn’t been updated yet to reflect that, it’s still showing a $543 balance. That balance IS included in my “amounts owed” area of the report but not in the math equation used to calculate UT. 

[RobertEG]

What credit limit is being reported on the account?

[Anonymous]

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@Anonymous wrote:

@Anonymous  Thank You. I have read many posts, including your primer, in regards to UT. That’s where my concern was, it SHOULD be included in aggregate UT but on my report, it’s not. It is regularly updating though, every month. I’ve paid it off over 30 days ago but it hasn’t been updated yet to reflect that, it’s still showing a $543 balance. That balance IS included in my “amounts owed” area of the report but not in the math equation used to calculate UT. 

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@Anonymous Yes that is a very important question, what is the reported credit limit?

To be honest, I don't know how unpaid chargeoffs are calculated as far as utilization goes. I've also read many threads and the common wisdom seemed to be that it is included in utilization. Some say it maxes individual  utilization and is maybe in aggregate, but I haven't been able to verify or quantify that. The data doesn't add up with it being a maxed out card in the situations I have examined.  

I did read something fico recently that indicated the payment history category considered the amount owed on delinquent accounts. Makes me wonder if when an account is charged off, if it's removed from utilization and penalized under the payment history category from there forth. 

I was answering your question as to how aggregate utilization is computated. But I'd love to have the data points when that reports to try to help figure it out.

But, the fact that it's regularly updating every month is good because you won't have a catch-up penalty. I would expect an increase, and then they will no longer be suppressed and be able to grow.

by the way is that a revolver chargeoff or a loan chargeoff?

[Anonymous]

@RobertEG  $543 balance on a $500 limit for the charge off that reports. I have another old chargeoff from 2015 that hasn’t reported since May of 2016 that shows a $456 balance on an $800 limit. That one I’m not messing with because it’s been sleeping peacefully.

@Anonymous  Thanks. The COs are both CC revolvers. I hope I can provide some useful data when this clears up. It may be harder to decipher if all my changes post at the same time. I’ve been fighting to get my mortgage scores up with very little success.

I went from 75% aggregate UT with all accounts (6) reporting a balance down to 48% aggregate UT with 2 accounts reporting a balance (88% and 44% individual UT) and 4 accounts reporting $0. All that movement and my middle score EX2 only went up 4 points from 636 to 640.

My 44% UT account is an AU but on EX it doesn’t report as AU, it reports as “Joint.” I didn’t want to remove myself because it’s a 22 year old account and my next oldest is 7 years and youngest at 5 years. With that being said, I’m paying that AU/Joint account down to $0 tomorrow and I’m bringing the 88% UT account down to 67%. That will leave only that single account reporting a balance (aside from the COs) and it’ll bring my aggregate UT to 28%. 

If all of that doesn’t move my numbers significantly, I will know that single CO that constantly updates is ruining me. Hopefully that CO is figured out by then. They told me it allegedly will report settled/$0 in 7-10 days. 

[Anonymous]

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@Anonymous wrote:

@RobertEG  $543 balance on a $500 limit for the charge off that reports. I have another old chargeoff from 2015 that hasn’t reported since May of 2016 that shows a $456 balance on an $800 limit. That one I’m not messing with because it’s been sleeping peacefully.

@Anonymous  Thanks. The COs are both CC revolvers. I hope I can provide some useful data when this clears up. It may be harder to decipher if all my changes post at the same time. I’ve been fighting to get my mortgage scores up with very little success.

I went from 75% aggregate UT with all accounts (6) reporting a balance down to 48% aggregate UT with 2 accounts reporting a balance (88% and 44% individual UT) and 4 accounts reporting $0. All that movement and my middle score EX2 only went up 4 points from 636 to 640.

My 44% UT account is an AU but on EX it doesn’t report as AU, it reports as “Joint.” I didn’t want to remove myself because it’s a 22 year old account and my next oldest is 7 years and youngest at 5 years. With that being said, I’m paying that AU/Joint account down to $0 tomorrow and I’m bringing the 88% UT account down to 67%. That will leave only that single account reporting a balance (aside from the COs) and it’ll bring my aggregate UT to 28%. 

If all of that doesn’t move my numbers significantly, I will know that single CO that constantly updates is ruining me. Hopefully that CO is figured out by then. They told me it allegedly will report settled/$0 in 7-10 days. 

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@Anonymous I can already tell you that chargeoff is ruining you. But your actions should help. Especially once that chargeoff reports paid, you'll be able to have those scores rise a bit. 

definitely please keep us informed looking forward to the datapoints!

[Anonymous]

@Anonymous 

I was actually thinking of you today when I saw this post and my SO's EX scores updated with the new util.

He has 2 installment loan COs, unpaid.

No revolving COs.

No CAs.

6 derog SLs (3 OC and matching 3 CA) that are in rehab.

These are his baddies on his EX CR.

His aggregate util went to 22% (crossed the threshold) and his revolver with 68% util crossed the threshold and is now at 48%. This is Care Credit, so not a major.

He also has 1 CC at 2% util and 1 AU CC at 2% util, so he is not AZEO.

So his Fico 8 increased +2pts (640 > 642)

EX 2 mortgage gained +13pt (608 > 621)

His mortgage score made little to no movement from paying down the past 2 months, so crossing under the 50% individual (68% > 48%) and 30% aggregate (31% > 22%) seemed to really get some traction. His Fico 8 did make larger movements with the paydown, until today, I had expected a bigger increase crossing under the thresholds.

I still really think those unpaid revolver COs are weighted heavily in mortgage scores, and included into the util for calculating the scores, but this is one person's profile compared to another, so it is always difficult to compare. I do hope getting aggregate to 28% does give you a boost!

Good luck and I hope that your scores pick up soon!

[Anonymous]

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@Anonymous wrote:

@Anonymous 

I was actually thinking of you today when I saw this post and my SO's EX scores updated with the new util.

He has 2 installment loan COs, unpaid.

No revolving COs.

No CAs.

6 derog SLs (3 OC and matching 3 CA) that are in rehab.

These are his baddies on his EX CR.

His aggregate util went to 22% (crossed the threshold) and his revolver with 68% util crossed the threshold and is now at 48%. This is Care Credit, so not a major.

He also has 1 CC at 2% util and 1 AU CC at 2% util, so he is not AZEO.

So his Fico 8 increased +2pts (640 > 642)

EX 2 mortgage gained +13pt (608 > 621)

His mortgage score made little to no movement from paying down the past 2 months, so crossing under the 50% individual (68% > 48%) and 30% aggregate (31% > 22%) seemed to really get some traction. His Fico 8 did make larger movements with the paydown, until today, I had expected a bigger increase crossing under the thresholds.

I still really think those unpaid revolver COs are weighted heavily in mortgage scores, and included into the util for calculating the scores, but this is one person's profile compared to another, so it is always difficult to compare. I do hope getting aggregate to 28% does give you a boost!

Good luck and I hope that your scores pick up soon!

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@Anonymous I've got a hunch that those charge-offs have been asleep more than two years? If so, that would make sense why SO gets points for utilization change on the mortgage scores, but not on version 8. 

Utilization is weighted less heavily in dirty scorecards. A 60+ keeps you in a dirty card for 7 years on version 8. But on the mortgage scores after 2 years you flip to a clean card with a derogatory penalty, I believe, so if those have been asleep for 2 years, then SO is in a clean card on the mortgage scores, so utilization would have a big effect.

@Anonymous is not seeing much change in score via utilization changes, but the the one regularly updating keeps OP in a dirty card in both the mortgage scores and 8, so that explains why utilization is not really giving much response pointswise.

But once that chargeoff reports paid and begins aging, 2 years later OP will be in a clean card on the mortgage scores and utilization will matter again... at least on the mortgage scores. 

that's another reason the chargeoff being part of utilization really doesn't make sense to me. In dirty cards utilization doesn't really matter per information from fico.

[Anonymous]

@Anonymous  That makes total sense, since my big paydown didn’t do much for my scores. With that being said, what about the % of accounts reporting a balance? Everyone says mortgage scores respond well to zero balances but does that logic hold true if I’m on a dirty scorecard? I guess I’ll find out in the next week or so.....