1% vs 0.1% vs 0.001% utiliziation

[Anonymous]

When it was time for me to get auto-insurance, after purchasing a new car. I didn't secure the rate that I expected my driving history to garner. Noob mistake on my part is I had a high utilization from a couple 0% introductory APR offers and didn't consider that my credit would be pulled for an auto insurance applicaiton.

To confirm my suspicions, I requested the information pulled from my credit as well as the optimum values that they were searching for (as is my right according to the FCRA as I understand it) and received the following response...

Listed below you will find the list of factors pulled from your credit report that impacted your rate:

Your credit info:

Months since oldest verified account opened is less than 86. Optimum value is account age of more than 229 months. Score will improve with time as accounts get older.

The average non-auto or non-mortgage account age equals 0 - 29 months. Optimum value is an average age of non-auto or non-mortgage accounts equal to or greater than 120 months. Score will improve with time as accounts get older and no new accounts are added.

There are 4 consumer initiated inquiries. Optimum value is no inquiries. Score will improve as inquires get older and there are no new inquiries.

Utilization of open bank revolving accounts verified in last 12 months is between 60% and 69%. Optimum value is utilization of 1%. Score will improve with less utilization, but more than 0%.

I guess that ends the speculation online of wheather 0% or 1% is better. It's clear that creditors are looking for a utilization greater than 0%. My question is, will there be difference between 1% and 0.1% and 0.01% ...etc? At what point does the scoring model no longer consider the drop in utilization?

I guess the scoring model I'm most interested in is FICO 2 Bankcard. That's because this is the one Chase pulled for me last time and I would like my next card to be a Chase Ink Cash card.

Any feedback is appreciated.

[Anonymous]

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@Anonymous wrote:

To confirm my suspicions, I requested the information pulled from my credit as well as the optimum values that they were searching for (as is my right according to the FCRA as I understand it) and received the following response...

Listed below you will find the list of factors pulled from your credit report that impacted your rate:

Your credit info:

Months since oldest verified account opened is less than 86. Optimum value is account age of more than 229 months. Score will improve with time as accounts get older.

The average non-auto or non-mortgage account age equals 0 - 29 months. Optimum value is an average age of non-auto or non-mortgage accounts equal to or greater than 120 months. Score will improve with time as accounts get older and no new accounts are added.

There are 4 consumer initiated inquiries. Optimum value is no inquiries. Score will improve as inquires get older and there are no new inquiries.

Utilization of open bank revolving accounts verified in last 12 months is between 60% and 69%. Optimum value is utilization of 1%. Score will improve with less utilization, but more than 0%.

I guess that ends the speculation online of wheather 0% or 1% is better. It's clear that creditors are looking for a utilization greater than 0%. My question is, will there be difference between 1% and 0.1% and 0.01% ...etc? At what point does the scoring model no longer consider the drop in utilization?

I guess the scoring model I'm most interested in is FICO 2 Bankcard. That's because this is the one Chase pulled for me last time and I would like my next card to be a Chase Ink Cash card.

Any feedback is appreciated.

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Thanks for the information on the score factors they were looking for...it's nice to see something so recent.

Which credit score model did they use for the insurance rate determination? Was it TransUnion Auto?

I'm right at 29mos total credit history, and I can tell you that all the 'EX 2' score models (2, Auto 2, Bankcard 2) absolutely hate credit seeking behavior - like inquiries and new accounts. I've seen some major score drops from it on my own file.

There is a decent recovery from it at 3mo and 6mo after the initial point loss.

[Anonymous]

They pulled my TransUnion Auto Insurance Risk Score. I really couldn't find any details on optimizing against this metric outside of the response I received from insurance company.

[Anonymous]

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@Anonymous wrote:

They pulled my TransUnion Auto Insurance Risk Score. I really couldn't find any details on optimizing against this metric outside of the response I received from insurance company.

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The last TransUnion Auto Insurance Risk score report I have is from Credit Karma. They stopped showing it in December 2019.

That score went up +13pts from the month before (820 to 833), and I actually increased my aggregate utilization from 1% to 8%.

Aging was:

• AoOA: 1 yr 11 mo
• AAoA: 1 yr 3 mo
• AoYA: 11 mo

It might have been that increase in 1mo, to 1yr 3mo. I went from 1of2 cards with a balance, to 2of2 as well. The score is sensitive to credit limits - higher limit, higher score, I think the threshold for that is $10,000+, I had no changes in limits anyway.

1% utilization on one 1 card only is probably the best you can do right now. Anything in the (0,1] interval is going to be 1% for scoring purposes. It's a ceiling formula, which only returns integers in its basic form. 1.3% will be 2%, 0.2% will be 1%, 3.0% will be 3.0%.

[Anonymous]

After I pay down my cards to 0%, I'll increase utilization to 1% and allow all my cards to update on my Experian report (FICO 8). I'll then decrease my utilization to 0.1% and wait till all accounts report on my credit.

I'll grab snapshots of the results from both scenarios to get some sort of empirical evidence and report back. So I probably won't be updating this thread for another 90 days lol.

[Anonymous]

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@Anonymous wrote:

After I pay down my cards to 0%, I'll increase utilization to 1% and allow all my cards to update on my Experian report (FICO 8). I'll then decrease my utilization to 0.1% and wait till all accounts report on my credit.

I'll grab snapshots of the results from both scenarios to get some sort of empirical evidence and report back. So I probably won't be updating this thread for another 90 days lol.

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There's also the actual dollar balance to consider here. It's commonly recommended to charge something small on one card only, around $5 to $20. Just enough that the bank won't skip reporting it because it's too small an amount.

There are a lot of data points on this forum showing small changes in scores with relatively small dollar balances. The utilization percentage will stay the same through this, so it's not the only factor.

If you see a change in score between 0.1% and 0.9%, that's due to the dollar balance change, because both of those are going to be taken at 1% for the scoring algorithm. The various front-ends on the monitoring services will definitely show the 0.1 as 0%. Some may show the 0.9 correctly as 1%. Calculate the actual percentage yourself, take the ceiling of it, and rely on that number to correlate score changes.

[Anonymous]

Can you share a reference that demonstrates that they sometimes don't report utilization under $5? I think I've had them report a utilization of $2 on a $200 limit citi diamond secured before. Would have been a year ago so I can't recall for sure.

[Deuter]

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@Anonymous wrote:

After I pay down my cards to 0%, I'll increase utilization to 1% and allow all my cards to update on my Experian report (FICO 8). I'll then decrease my utilization to 0.1% and wait till all accounts report on my credit.

I'll grab snapshots of the results from both scenarios to get some sort of empirical evidence and report back. So I probably won't be updating this thread for another 90 days lol.

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Hey i think i can help with this experiment in FICO 8.

I usually keep my cards at 0% util. Per recommendation i am closing today with 1% util accross all my cards. My Experian will update in about a week or less. 

I am eager to see the changes in doing AZEO with 1%, hopefully score improves. 

[Anonymous]

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@Deuter wrote:

I usually keep my cards at 0% util. Per recommendation i am closing today with 1% util accross all my cards. My Experian will update in about a week or less. 

I am eager to see the changes in doing AZEO with 1%, hopefully score improves. 

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You should expect around +16pts, give or take a few.

Using a myFICO subscription, I was able to observe changes at all 3 CRAs as I switched which card was at zero. So I was temporarily at ALL ZERO until a few days later when the 2nd card reported a non-zero balance.

You can see what that looks like in this post.

[Anonymous]

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@Anonymous wrote:

Can you share a reference that demonstrates that they sometimes don't report utilization under $5? I think I've had them report a utilization of $2 on a $200 limit citi diamond secured before. Would have been a year ago so I can't recall for sure.

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@Anonymous  , can you answer that question?

I've never had a card report a non-zero balance below $35.