Congratulations on getting your utilization down to 0%! I know firsthand how hard that can be, especially if you've been carrying a balance on cards for years. For me personally I started following AZEO in May 2019 after paying off all my cards and then getting a score penalty for having a $0 balance on all cards. For me now I let 1 card report a small balance each month ranging from $5 to $20. I also let $5 report each month on 1 my wife's cards since I'm an authorized user on hers too and vice versa. We have seen our scores go up each month doing this. We don't focus so much on a specific percentage. We just make sure before the designated cards close they are showing at least $5 for their balance. I didn't think trying to have 7% of my total limit report monthly would be realistic consistently, that would be about $11,000. Definitely do what works best for you, this is just what has worked for us.
Congrats on your payoff! You should see a decent score boost from it but - if all of your cards report $0 you'll miss out on points. FICO penalizes for having no revolving account usage. The penalty can be anywhere from 8-20 points, depending on profile. So while the points gained from reducing your util will likely exceed the points lost for the all zero penalty resulting in a net gain - you'll be leaving points on the table. You always have to have at least one card reporting a balance.
For AZEO, your utilization is based on individual card util and aggregate (total) util and the card you choose to report a balance should be a major bank card like your citi or an Amex revolver- avoid using an amex charge card, store card, or credit union card as your azeo card. The balance reporting should be less than 28.9% of the card's respective limit (individual util) and less than 8.9% of your aggregate limit.
So, for example, if you use your citi and it has a $1k limit, you would want no more than $289 reporting on that one card. That would be 28.9% individual and less than 1% aggregate.
Or, you could simplify things, ignore percentages, and only let $5 or $10 report on the one card.
In your case, however, you could probably still optimize scoring with up to 3 cards reporting balances of less than 28.9% of their respective limits so long as your total balances are under 8.9% aggregate. FICO likes to see no more than 30% of cards reporting a balance. With 14 cards, 4 cards reporting would only be 28.5% - so less than 30%. 3 cards would be 21.4%, 2 would be 14%.
I'd start with one card reporting, then let 2 report to see if there is any score change, then 3, then maybe 4 to find the number of cards with a balance threshold for your profile. If you can report 3 with a balance without losing points - that may be less micromanaging required each month.
And finally, yes- when all of your accounts update to reflect lowered util, ask for your CLIs.
@Anonymous wrote:Hey folks! So I just need help understanding this method.. so I will break down my current situation.
I currently have 14 open accounts and they mix between major credit cards, store cards and lines of credit.
My ex score is a 667, with 26% utilization reporting. I finally saved enough cash to pay that down to a 0% utilization just hasn't updated yet but should within a week according to my statement dates. Imnot entirely sure how big of a boost I will get after these accounts update to 0% but moving forward I want to manage my cards a lot more responsibly and try out the AZEO method because from what I read I'll see a nice jump in my score as I'm trying to apply for a business card in the near future for my company.
AZEO From what I understand is letting a 10-8% balance report which would reflect your overall utilization using said card(s) how ever you choose but paying them down to such a percentage before the statement date so it will reflect 10-8% utilization. Here is where I'm confused.
I have 14 total open accounts and $25,850 total in a available credit. And 7% of that for example is $1809.50 And my highest major credit card is $1900.. the others wjth higher limits are store cards and lines of credit. So from a spending perspective it would be a lot easier to use the $1900 card but should I be using multiple cards to achieve this percentage ($1809.50) to report? Or should this all be done on 1 card? My goal is to get the boost in score but also to get CLI on not just 1 card but multiple since my limits are rather low across the board ranging from $300-$1900 on major credit cards.. I do have some "big boy" cards that are known for being generous such as AMEX, capital one, Police and Fire Federal Credit Union and others are subprime such as credit one so I don't expect much of any increase with those.
what would you advise me do? Should I only use my $1900 limit card to achieve the 7% utilization? Or should this be done on multiple cards and multiple lines of credit for the sake of not only boosting your score but getting future CLI amongst my generous cards?
lastly I haven't request a CLI on my AMEX,CITI and police and fire card in almost a year should I do that as soon as my utilization reflects 0%? Or should I wait some time?
thank you for taking the time to read and respond in advance!
Just let one of your bank cards report a small balance each month before you pay it off. It can be as little as $10 or $20.
Don't use a Chase card for this purpose, because when you pay it off it reports again, off-cycle, at zero.
@Anonymous wrote:
@thornback wrote:Congrats on your payoff! You should see a decent score boost from it but - if all of your cards report $0 you'll miss out on points. FICO penalizes for having no revolving account usage. The penalty can be anywhere from 8-20 points, depending on profile. So while the points gained from reducing your util will likely exceed the points lost for the all zero penalty resulting in a net gain - you'll be leaving points on the table. You always have to have at least one card reporting a balance.
For AZEO, your utilization is based on individual card util and aggregate (total) util and the card you choose to report a balance should be a major bank card like your citi or an Amex revolver- avoid using an amex charge card, store card, or credit union card as your azeo card. The balance reporting should be less than 28.9% of the card's respective limit (individual util) and less than 8.9% of your aggregate limit.
So, for example, if you use your citi and it has a $1k limit, you would want no more than $289 reporting on that one card. That would be 28.9% individual and less than 1% aggregate.
Or, you could simplify things, ignore percentages, and only let $5 or $10 report on the one card.
In your case, however, you could probably still optimize scoring with up to 3 cards reporting balances of less than 28.9% of their respective limits so long as your total balances are under 8.9% aggregate. FICO likes to see no more than 30% of cards reporting a balance. With 14 cards, 4 cards reporting would only be 28.5% - so less than 30%. 3 cards would be 21.4%, 2 would be 14%.
I'd start with one card reporting, then let 2 report to see if there is any score change, then 3, then maybe 4 to find the number of cards with a balance threshold for your profile. If you can report 3 with a balance without losing points - that may be less micromanaging required each month.
And finally, yes- when all of your accounts update to reflect lowered util, ask for your CLIs.
Wow!!' I'm so super excited!!! From the feedback I'm getting it seems like I'm on the right path!!
Double checking my report it looks like I'll actually have 2 cards reporting very small balances when the report updates next week although the card have a zero balance it won't be updated to reflect that until the end of the month. So I actually have 2 cards both will be reporting $85 combined out of my total available credit of $25,850. But I will certainly take your advice and start with 1 card and upping it to 2/3 and see where it best works for me! Thank you a bunch again!
With some scoring models, notably FICO 8's, the difference between 2/14 reporting small balances and 1/14 reporting a small balance won't mean anything at all.
With some scoring models, notably the mortgage scores, the difference might mean 6 or 7 points. Or might not.
@Anonymous wrote:Wow!!' I'm so super excited!!! From the feedback I'm getting it seems like I'm on the right path!!
Double checking my report it looks like I'll actually have 2 cards reporting very small balances when the report updates next week although the card have a zero balance it won't be updated to reflect that until the end of the month. So I actually have 2 cards both will be reporting $85 combined out of my total available credit of $25,850. But I will certainly take your advice and start with 1 card and upping it to 2/3 and see where it best works for me! Thank you a bunch again!
Oh good - an even better setup. You'll get to see the full scoring benefit of reducing util, then you'll get to see how your profile rewards for going from 2 to 1 cards with a balance.
If you have access to your mortgage scores, be sure to check those too when the number of cards with balances drops to 1. Mortgage scores are the most sensitive to this metric.
My FICO 8s don't budge (maybe +1 point) when I go from 2 to 1 cards with a balance but my mortgage scores will gain around 9 points.
I'm relatively new to this site and just encountered the AZEO concept within the last week. I've read numerous posts on the subject and, I guess I'm being a bit thick as I do not understand the benefit of AZEO versus using say, three cards, each of which reports a tiny balance on their associated statements.
In my case, I will hit my 1-year mark from a Chapter 13 discharge this week and, so far at least, I only have two credit cards, TDCash Rewards (3% Dining, 2% Groceries, and 1% everything else) with a $5,000 limit, and a CapitalOne Quicksilver (1.5% cash back on everything) with a $3,000 limit. Given I typically charge upwards of three to four thousand dollars per month on "stuff" and the relative differences in the rewards, I use both cards to their best advantage which in turn yields some nice cash rewards. I then pay them in full prior to the next due date; said another way, both cards may or may not show a balance of anywhere between $0.00 and maybe $200.00 or so from charges made between the posting of my payment and the cutting of the next statement.
Circling back to my confusion, I'm having a hard time understanding how practicing AZEO versus say, having statements of say, $120 and $46 (TDCash and Quicksilver respectively) will make any difference.
@Horseshoez wrote:I'm relatively new to this site and just encountered the AZEO concept within the last week. I've read numerous posts on the subject and, I guess I'm being a bit thick as I do not understand the benefit of AZEO versus using say, three cards, each of which reports a tiny balance on their associated statements.
In my case, I will hit my 1-year mark from a Chapter 13 discharge this week and, so far at least, I only have two credit cards, TDCash Rewards (3% Dining, 2% Groceries, and 1% everything else) with a $5,000 limit, and a CapitalOne Quicksilver (1.5% cash back on everything) with a $3,000 limit. Given I typically charge upwards of three to four thousand dollars per month on "stuff" and the relative differences in the rewards, I use both cards to their best advantage which in turn yields some nice cash rewards. I then pay them in full prior to the next due date; said another way, both cards may or may not show a balance of anywhere between $0.00 and maybe $200.00 or so from charges made between the posting of my payment and the cutting of the next statement.
Circling back to my confusion, I'm having a hard time understanding how practicing AZEO versus say, having statements of say, $120 and $46 (TDCash and Quicksilver respectively) will make any difference.
As I said above:
"With some scoring models, notably FICO 8's, the difference between 2/14 reporting small balances and 1/14 reporting a small balance won't mean anything at all.
With some scoring models, notably the mortgage scores, the difference might mean 6 or 7 points. Or might not."