AZEO - Advice

[Anonymous]

So, I had about a 42% UTL over the past 6 months spanning over 8 cards.  Finally paid all accounts except left 1 with a small balance.  Score took about a 20 point increase in June and mid July.  I forgot that the 1 account with a small balance was on auto pay and on the 25th of July was proccesed to a 0.00 balance.   Today the account reported to the CRA's and all my scores dropped anywhere from 38 - 52 points. MYFICO alerts stated not using available credit as 1 reason and no installment loans. I went ahead and took a secured shares loan with NFCU for 5K today and will pay $4500.00 off once the account is set-uo within the next week.  I confirmed that the payment push my next due date till 2021. I will leave 8.90% balance based on CL with my NFCU CR card which will report to each CRA around the 7th of August.  Once I confirmed it's been reported I will PIF and repeat each month going forward.  I guess my main question is....How long would it take for my scores to recover once I get back into the AZEO method and the installement loan reports to 10% ULT? I'm still in the rebuild process from Chapter 7 discharged 03/15.  I have over 90K in CL's and now it's reporting at 0.00 UTL. I have alone 38K in lines with NFCU over a year and 4250.00 with Cap One since 04/2015.   Any advice would be appreciated

[SouthJamaica]

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@Anonymous wrote:

So, I had about a 42% UTL over the past 6 months spanning over 8 cards.  Finally paid all accounts except left 1 with a small balance.  Score took about a 20 point increase in June and mid July.  I forgot that the 1 account with a small balance was on auto pay and on the 25th of July was proccesed to a 0.00 balance.   Today the account reported to the CRA's and all my scores dropped anywhere from 38 - 52 points. MYFICO alerts stated not using available credit as 1 reason and no installment loans. I went ahead and took a secured shares loan with NFCU for 5K today and will pay $4500.00 off once the account is set-uo within the next week.  I confirmed that the payment push my next due date till 2021. I will leave 8.90% balance based on CL with my NFCU CR card which will report to each CRA around the 7th of August.  Once I confirmed it's been reported I will PIF and repeat each month going forward.  I guess my main question is....How long would it take for my scores to recover once I get back into the AZEO method and the installement loan reports to 10% ULT? I'm still in the rebuild process from Chapter 7 discharged 03/15.  I have over 90K in CL's and now it's reporting at 0.00 UTL. I have alone 38K in lines with NFCU over a year and 4250.00 with Cap One since 04/2015.   Any advice would be appreciated

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1. All you had to do was let one card report a small balance and you would have gained back the points you lost by zeroing everything out. You will likely get those points back as soon as one card reports a small balance to the credit bureaus.

2.  I have no idea why you lost the other points.

3. Probably the NFCU loan will enhance your FICO 8 score once it reports a $450 or lower balance.

[Anonymous]

Note that SouthJ is advising you to pay your loan down to under 9% -- not 10% as you were thinking.  That's good advice.

I see that you write:

"I will leave 8.90% balance based on CL with my NFCU CR card which will report to each CRA around the 7th of August."

It sounds like you think there is a scoring advantage to having a balance that is at exactly 8.9% of its credit limit.  That would be untrue.  The 8.9% figure is the most it can be -- it doesn't have to actually be at 8.9%.  It could be much less.  For example, you could have one card at $10 out of a total credit limit of 90k.

Furthermore, the 8.9% ceiling refers to total credit limit, not the credit limit of that card.  The individual card penalties begin at 28.99%.

Sounds like you have a lot going on at your profile.  Keep one card reporting a small balance, pay the loan down to $400 or so, and allow your score to stabilize over a couple months.

[Anonymous]

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@AnonymousSo, I had about a 42% UTL over the past 6 months spanning over 8 cards.  Finally paid all accounts except left 1 with a small balance.  Score took about a 20 point increase in June and mid July.  I forgot that the 1 account with a small balance was on auto pay and on the 25th of July was proccesed to a 0.00 balance.   Today the account reported to the CRA's and all my scores dropped anywhere from 38 - 52 points. MYFICO alerts stated not using available credit as 1 reason and no installment loans.

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Your scores definitely didn't drop 38-52 points due to going from AZEO to all card with $0 balances reported.  The typical drop we see for that would be 15-20 points, meaning that you lost ~23-32 points for another reason.  Did you have an open almost-paid-off installment loan that you did pay off and it reported as closed?  That event would result in a score drop in the approximate range I just mentioned.  If not, I'd look at your credit report and try to determine what else changed aside from your one non-zero reported balance reporting $0.

[NRB525]

OP what were the scores before, and after all cards reported zero?

In other words, what is the BK starting point. 

Did you already have an active SSL with NFCU? So this would be a second loan?

[Hex]

It looks like you mention a Discover score. Do you have a Disco card? If you do you can make a small purchase on it and as soon as it posts call Disco CSR and ask them to manually reoport rhe card. That might be a faster way to get your points back.

[Anonymous]

Prior to bringing all cards to 0.00 bal I had  a $9.00 balance with Cap1.  Scores reflected TRU 658 , EQ 658 and EXP 666.  I had an installment loan that was paid off in 06/2018 that only reported to EXP and that score dropped down from 676 once it reflected paid and closed. Once everything reported 0.00 balance scores are TRU 645, EQ 602 and EXP 646. 

I allowed my NFCU CR card to report $502 off a CL of 11,200.00  (under 5% UTL) that cut Friday.  If I understand correctly...My total Credit line with all cards reporting to CRA are $81,000.00 which would have my UTL under 1%. I also took out a SSL with NFCU on 08/02/18 for $5000 and the following day once the account was set-up in my online account paid $4600.00 which left a balance of 400.00 (8%) UTL.   I'm hoping once the credit card balance reports that the scores will rebound and maybe slightly increase with the SSL reporting to all CRA's. 

My original thought was to have everything report 0.00 and only use my NFCU for daily spend.  I will still rotate use on all cards so no AA is taken for non-use.    Thanks for everyones input.  It's appreciated!

[Anonymous]

Final Question - Since my SSL with NFCU reports as next due date of 05/26/2021...should I make monthly small payments ($5.00) so when it reports to the CRA's it reports with a payment being made on the SSL or just leave alone until the first payment is due in 2021?   

[Anonymous]

Why don't you do two things? 

(1)  Pay the loan down further.  That won't help you with scoring, since all balances under 8.99% have the same scoring benefit.  It will reduce the amount of interest you are paying, however.

You have a balance of $400 now.  How about paying it down to $100?

(2)  Set up a monthly payment of $1.01.

I'd avoid lowering the balance to a tiny amount, since several people have reported the lender forgiving the remainder and closing the account.  $100 should be very safe.

Actually, was there a monthly payment initially associated with the loan?  If so what was that?  I'd actually make sure that any plan of yours keeps your balance always > than that initial monthly payment and also always > $20.  That should protect you against premature closure.

[Anonymous]

Interest is only 2.25% off of $400.00 over the 3 years which is not much at this point.  The payment amount is 156.71 which reflects due 05/26/2021.  Thats why I don't want to make too big of payments to avoid bringing the balance down too low.  

Thanks for everyone's input.