AZEO-Why better than super low or $0

[Anonymous]

I’m curious...why is AZEO (with $5 balance on one card) better than all zeros, or just a low utilization overall (or on each card) in the low single digits? What’s the logic and how much better for scores is it than all zeros or super low overall utilization?
Thanks!

[DollyLama]

All zero balance at statement cuts with all revolving credit cards will ding your scores a good 20 pts or more. 

The super low as you stated doesn't have to be $5, it's just optimal to be at less than 8.9% of the one credit card's line of credit and the remaining zero. This really is only truly implemented if applying for a mortgage, auto. You can keep a balance on 2, 3 cards if you wish. Just never max them out for protection against adverse action by a creditor. 

[HeavenOhio]

If all of your card balances are zero, FICO thinks you're not using revolving credit and penalizes you. Multiple balances are seen as riskier than a single balance.

As mentioned, the difference between AZEO and close to AZEO probably isn't much. I lose three points on my EQ FICO 8 for a second card reporting a positive balance. And I lose no points on my EX FICO 8 when three cards report positive balances.

[Anonymous]

So, without going into everything here, my three FICO 8 scores are all 680-685.
I have three revolvers
-One less than a month old so not reported yet with a $2k CL.
-One with $2k CL that last reported at $0
-One with $7k CL that last reported at about $1150 balance.
Total CU of about 13%
Any guess what kind of bump I might get when new card reports for first time and at $0, other $2k card reports at $0 and $7k card reports at $5.
So bottom line, my file would be a little bigger, total CL up by $2k and CU down to below 1%.
I understand there are 5374 other factors but assuming all other things being equal, about how much of a bump, if any, might I expect with AZEO and the new card.
Thanks!

[HeavenOhio]

What is the age of your youngest account (not counting the new card)? And what's your current AAoA (average age of accounts)? Are there other accounts on your report besides your cards? If so, how many?

There are a lot of moving parts here, so the waters are kind of muddied. Your change in AoYA (age of youngest account) might cause a big drop — or it might not. There's a tidy bonus if your AoYA is over a year. If it's less than a year, you don't have the bonus to lose.

The best test would be to have an AZEO score just before the new card reports and again just after.

[Anonymous]

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@HeavenOhio wrote:

What is the age of your youngest account (not counting the new card)? And what's your current AAoA (average age of accounts)? Are there other accounts on your report besides your cards? If so, how many?

There are a lot of moving parts here, so the waters are kind of muddied. Your change in AoYA (age of youngest account) might cause a big drop — or it might not. There's a tidy bonus if your AoYA is over a year. If it's less than a year, you don't have the bonus to lose.

The best test would be to have an AZEO score just before the new card reports and again just after.

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My AoYA is less than a year.  AAoA is 1.3.  Besides cards (including one Amex Gold, obviously not a revolver) all I have open is auto lease.  Half way through, perfect payment record, about $10K of payments left.  

Think I have a shot at a 10-20 point bump because of AZEO?

Funny because of statement dates I might actually see what my AZEO score is just before new card reports (it's a business card, Amex BBP...will that even matter actually?) and just after.  I'll make a mental note.

Good info to have on AoYA and 1 yr+ bonus to score.  Hopefully in the next couple years I'll have a chance to see that happen...then apply for 423 cards the next day!  LOL

[HeavenOhio]

Some business cards don't report to one's personal credit. AMEX might be among those that don't, but someone would have to confirm that. Note that AMEX cards tend to take two statements to report.

A new card on your personal report might drop your AAoA below a year. That's a likely ding, but I'm not sure how much. The good news is that it's easy to tell when those points will come back.

Without the new card, I'd bet on about 10 points or so for AZEO. But I'll qualify that by saying that there are gurus around here who are better at predicting score changes than I am.

[Anonymous]

I'll take the 10!  But, would rather 17+ to get everything above 700.  Can you make that happen for me please!

[Anonymous]

You have two questions, which you are thinking are the same:

(1)  Practical:  What is going to happen to my score in the next few weeks?

(2)  Theoretical: If Bob had ten open cards, how much benefit would he get from AZEO compared with all of his cards reporting a small positive balance?

Trouble is they are not the same.  You have a lot of stuff that will be happening, most of which has nothing to do with "number of cards reporting a balance."   Your total utilization will be going from 13% to 1%.  A new card will be appearing on your reports (altering Age of Youngest).  The percentage of cards that you have that are "new" will be going up.  And so on.

The only way to test theoretical claims is to have a solid stable profile about which almost nothing is changing except the one scoring factor.

Question #1 is one we hear hundreds of times a month here.  The person has already taken certain actions and wants us to guess what their scoring impact will be.  We can try, but if you think about it the best answer is "Dunno... wait and see."  The Ancient Greeks used to say Experience is the mother of certainty.

Where it makes sense to huddle with us is if the various credit related actions are ones you have not taken yet.  I.e. they are hypothetical and you want to know if you might be shooting yourself in the foot by moving ahead with them.  Then it makes a ton of sense to seek counsel because you are soliciting information to help you make choices.  In your case you have already made the choices so it is best to just wait and see -- then you'll have a certain answer.

To circle back to the case of Bob (#2) the FICO 8 Classic model gives some bonus for AZEO compared with having many accounts reporting a small balance, but the bonus appears to be fairly small as far as we can see, and it varies according to which bureau we are talking about.  Compare this with the mortgage models or the Bankcard Flavor of FICO 8 or 9, and you'll see models where AZEO gives you much more of a pronounced benefit.

[RonM21]

Op as things start to settle down on your profile a bit, you'll be better able to tell what is going on. I believe Heaven mentioned earlier that there are a lot of moving parts contributing to your score. When some of these parts still have yet to land at a spot where they are stable, it is that much more difficult to predict what will happen.

But you are doing the right thing now, trying to get everything lined up and understood so that you know your next moves. A lot of great info given in the above posts should help you towards your goals! You'll be at 700 in no time.