@Janus said: So would you say that what could be holding down a score, would be the several balances on CC's? Even if a person is at 9% overall and under 28% on each CC? I assume that each time your balance increases, you would lose some points.
@Janus: If you are under 8.9% ag and 28.9% individual, you are perfectly fine, actually exceptional! The 4% breakpoint found by @CassieCard does not exist on all scorecards and it is an extremely small number of points, something you could easily overlook. But, yes, if you have many accounts with a balance, that will reduce your score.
No, each time your balances increase doesn't equal a score change; only if you cross thresholds.
@SilverSmith said: Ah... So there is a unicorn breakpoint for EX < 4% for individual CCs also. That would lend credence to the AZEO method. Otherwise why would anyone bother other than to avoid balance carry costs with interest charges. Unless one would say FICO sees a zero balance as a positive DP. Then we get into a zero utilization issue over the course of several cycles as a negative for any one CC.
@SilverSmith: No individual breakpoint for individual utilization has been found to my knowledge at ~4%. Click on the links @CassieCard so graciously provided and read about the AGGREGATE ~4% threshold.
However, I don't understand what this would have to do with AZEO, though? Yes, exactly, FICO sees zero balances as positive DPs. The more the better, especially the mortgage scores, as SJ would say.
There is more than one theory. One says FICO takes the number of open accounts WITH a balance and uses that as the numerator and the total number of accounts as the denominator. The percentage created, 0%-100%, assists in determining the score, the lower, the better, obviously. There are breakpoints, just like with utilization. They are just not well documented and seem to vary by algorithm.
Another theory says its based on raw numbers rather than percentages; still, the lower the number of accounts with a balance, the better. There is also debate as to whether it includes all accounts or just revolvers; this may also vary by FICO version.
This is why AZEO works. Because, no matter how many cards you have and no matter which FICO algorithm, the lowest number of accounts with a balance you can have is the most optimal for scoring for ANYONE'S given profile at that given time. (Except those with 850 buffer or a high number of cards, possibly.)
This does NOT mean it is the most optimized possible for that scorecard/profile however. For example, I'll borrow Rupert and Cornelius (credit BBS, LOL) and I'll add Jon! Let's say all 3 have the exact same profile with the only difference being number of cards. Keep in mind, FICO does not use dollar amounts, but percentages for utilization, so the difference in number of cards should be irrelevant to utilization, but should only discriminate among accounts with a balance. (Note: There is debate that a $100 threshold or some other trivial threshold could exist, offering a small number of points, but to my knowledge it hasn't been confirmed, and if so, would most likely be small.)
Now, if Rupert only has 2 revolvers, Cornelius 3 and Jon 5, what would the difference be among their respective scores at AZEO? This would vary based upon FICO version.
I would opine that for FICO 08, Rupert would have the lowest scores because he has the highest number of accounts with a balance, 50%. Cornelius would fare better because he could reach FICO 08s documented 33% threshold for number of accounts with a balance. Jon may fare even better, if there is another lower breakpoint in FICO 08. It is noteworthy that once you hit that lowest breakpoint, whatever that is, adding more cards (resulting in an even lower percentage potentially) will not offer any further help, contrary to what the CMSs would like you to believe, LOL.
But what happens with a different version, say old 1998 EX FICO2? Well, for sure Jon would be in the lead there because he can reach lower documented breakpoints than Cornelius (50%) or Rupert (33.3%). Jon has only 20% of his accounts with a balance at AZEO and will therefore have a better EX2 score than Cornelius or Rupert, assuming all other variables are the same. So, number of cards can and does make a difference up to a point; then its just convenience of carrying more than one balance without a ding.
There is the other part of AZEO regarding keeping the one balance low. Of course this ensures both individual and aggregate utilization is low, to squeeze every point from utilization, but the reason most everyone keeps all their accounts zeroed is because of trying to stay under the lowest threshold possible for the number of accounts that they have.
For example, for many profiles, they can reach their best scores even at AZE2 or AZE3 or higher. It all depends on the number of cards that they have.
One other note I would like to make. From what I have learned, FICO looks for the highest individual utilization card and then dings/awards based upon that. It does NOT count each card and which individual threshold each card is at.
You simply get dinged for the highest one, whatever it may be. So, individuals would not be keeping each individual card <4% to maximize score; no, they would be zeroing out as many accounts as possible to lower their "number of accounts with a balance" percentage.
Hope this helps someone understand. And as always, just my humble opinion from what I've learned here and experienced.
Edited at 6:48 AM.
