AZEO - Ideal Percentage

[credit8502020]

Hi All! 

I typically implement AZEO. As I've had credit limit increases though it just doesn't feel right letting higher balances report for the best score. LOL! Nevertheless, my question is, is there ever a time when 1% will not count towards AZEO and there is a penalty because it "reports" as if it's a $0 balance? 

So for instance if I have a $30,000 card and only let $300 report just for the best score optimization....

Should I leave the reporting balance as more, like 1.5% or 2%? I'm trying to find the sweet spot for the balance. 2-3% is what I typically use, but I'm curious as to what others have found. 

Thanks for your input. 

[Remedios]

No, any balance will be rounded to 1% if balance is under 1%

With that said, keep in mind that every lender has minimum balance they will report, so don't go lower than $7.00 (that's the highest "we aren't reporting this but you still need to pay it" amount  

As far as sweet spot, that's having a life in which you let balances report, pay on or before due date, and avoid pitfall of making payment method into lifestyle and chore. 

[Thomas_Thumb]

^ Agreed -

Ideal approach, in my opinion, is to allow all charges to report on statements and then just pay statement balances in full before due dates. I do try not to report individual card utilizations over 29% and aggregate over 9%. Never practiced AZEO but would definately report balances on 50% or less of cards if looking for a mortgage or even a car loan that might pull a "mortgage" score.

[SouthJamaica]

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@credit8502020 wrote:

Hi All! 

I typically implement AZEO. As I've had credit limit increases though it just doesn't feel right letting higher balances report for the best score. LOL! Nevertheless, my question is, is there ever a time when 1% will not count towards AZEO and there is a penalty because it "reports" as if it's a $0 balance? 

So for instance if I have a $30,000 card and only let $300 report just for the best score optimization....

Should I leave the reporting balance as more, like 1.5% or 2%? I'm trying to find the sweet spot for the balance. 2-3% is what I typically use, but I'm curious as to what others have found. 

Thanks for your input. 

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$10 or $20 is enough

[Thomas_Thumb]

Yes $10 is enough but $2500 would not be too much on a $30,000 card either.

[credit8502020]

@Remedios @Thomas_Thumb @SouthJamaica Thank you! I'm curious how the score may change when going from 2% to 1.5% so I'm going to lower the reporting balance this month even more. Trying to get as many points as possible before buying a few investment properties and/or getting a new credit card. Of course I know preparing for mortgages is different than preparing for credit cards in some ways, but either way, want the scores to be optimized and ready for whatever comes first based on opportunity, etc. 

[Thomas_Thumb]

I would expect no score change associated with reducing aggregate revolving utilization from 4% => 3% => 2% => 1% => 0.5%. I certainly have not experienced one. Also, I never saw a score change associated with highest individual card utilization in the 5% to 29% range. However, impact of utilization changes on score is scorecard dependent.

I always encourage people to vary there balance reporting so they can see how changes impact score for their specific profile. There is only upside to gaining some insight. After all, Fico scores are only based on utilization at the point in time data was pulled - Fico 10T excepted.

Although not talked about much, absolute balance in $ amount is also looked at in scoring. Those thresholds have not been rigorously studied as they are hard to isolate from utilization.

It takes a profile with a large aggregate CL and a few high CL cards to properly test this. A tester would bump up total reported balance in $1k to $2k increments while maintaining individual card utilizations low - say under 15% and aggregate utilization very low - say under 5%. Balances should report on the same cards and only those cards for each data point.

An ideal test candidate, IMO, would have 9 cards and an aggregate CL above $200k. They would also have 3 cards with CLs in the $20k to $30k range that could be selected as balance reporters. All (6) other cards would report zero balances. Allowing # of cards reporting to vary or which cards report to vary would confound the data.

[credit8502020]

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@Thomas_Thumb wrote:

I would expect no score change associated with reducing aggregate revolving utilization from 4% => 3% => 2% => 1% => 0.5%. I certainly have not experienced one. Also, I never saw a score change associated with highest individual card utilization in the 5% to 29% range. However, impact of utilization changes on score is scorecard dependent.

I always encourage people to vary there balance reporting so they can see how changes impact score for their specific profile. There is only upside to gaining some insight. After all, Fico scores are only based on utilization at the point in time data was pulled - Fico 10T excepted.

Although not talked about much, absolute balance in $ amount is also looked at in scoring. Those thresholds have not been rigorously studied as they are hard to isolate from utilization.

It takes a profile with a large aggregate CL and a few high CL cards to properly test this. A tester would bump up total reported balance in $1k to $2k increments while maintaining individual card utilizations low - say under 15% and aggregate utilization very low - say under 5%. Balances should report on the same cards and only those cards for each data point.

An ideal test candidate, IMO, would have 9 cards and an aggregate CL above $200k. They would also have 3 cards with CLs in the $20k to $30k range that could be selected as balance reporters. All (6) other cards would report zero balances. Allowing # of cards reporting to vary or which cards report to vary would confound the data.

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@Thomas_Thumb Thank you. Hopefully we'll be able to receive data points from some members with ideal profiles for specific testing. It's always nice to be able to enhance our understanding and new findings to improve upon our scores. I'll see soon how the changes I'm going to make will impact scores. As we know, just 1 point can make a big difference when it comes to interest rates, etc.