@RobertEG wrote:
Yes, that is what I am opining.
Of course, no one knows the exact FICO scoring algorithm. Yet everyone wants numbers.
No one can give you specific number estimates without first making some subjective assumptions about how FICO scoring works.
I have several assumptions in order to give me a rough estimate of % util mpacts that I will share with you, and my rationale behind them, but again, this is just my "guesstimate."
I start with the clearest pronouncement made by Fair Isaac, and that is their weighing of util of credit at approx 30% of total FICO score.
30% of 850 is 255, But all of that 30% is not simply revolving credit util, some is installment loan util.
The second thing we know is that revolving util counts much higher than installment loan util. ONe has to make an assumption of how much higher.
I assume, based on anecdotal experiences, that of this 255 pts, between 80% and 90% of weighting goes to revolbing util.
With those subjetive assumptions, one has approx. 212 pts to score for revolving credit.
The next thing we know about revolving credit scoring are the prior statements by Fair Isaac that overall % util and the combined effects of individul card utils are scored approximately the same. So another subjective assumption.
About 106 points of your FICO score are based on overall util, and approx 106 points are based on the combined, indivi card utils.
Carrying this out to specifics, if you have two cards, for example, overall % util would control 106 pts in your scoring, and each of the two cards would separately account for approx 53 points.
The final assumption is how the effect of % util decays based on level of util.. The one thing that is the murkiest, and deepest FICO secret.
Everything I have seen myself, and seen others report anectotally, is that higher utils hurt more than lower. Mathemacially that says that the formula is not liner, but is exponential.
So I simply make the most logigical mathematical assumption, and assume that effect of % util is exponential. That is, overall % util scores -106 points for 100% util, and 0 pts for 0% util with the point spreads between higher levels hurtng more than the same reduction for lower util levels.
If you do that, here is a chart of aapprox point effects for overall % util.
0% util - 0 pts
10% util - 1 pt
20% util - 4.3 pts
30% util - 9.6 pts
40% util -17 pts
50% util -27 pts
60% util -38 pts
70% util -50 pts
80% util -68 pts
90% util -86 pts
100% util -106 pts.
For individual cards, simply divide the above point impact by the number of indiv cards.
OK, applying all those assumptions to Account 1 with two cards, and an overall % util of 50%, and and equal % util of 50% on each card.
The overall point hit would be:
-27 pts for overall % util at 50%
-13.5 pts for individ card 1 util of 50%
-13.5 pts for individ card 2 util of 50%
Total impact: -54 pts.
Apply these same assumptions ot an overall % util of the same 50%, but card one is at 80%, and card 2 is at 20%
The overall pt hit would be:
-27 pts for overall % util at 50%
-34 pts for card 1 at 80% (-68/2)
- 2 pts for card 2 util at 20% (-4/2)
Total impact: -63 pts.
If alternately the higer util card, in this case, card 1 is siting at 90% util, and card 2 sits at 10% util, then the point spread jumps by another 15 pts.
I know this involves a lot of assumptions, but if you want points, that must be done. That is simply how I see it.
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