AZEO works

[Jeffster1]

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@OmarR wrote:

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@Jeffster1 wrote:

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@NoHardLimits wrote:

The loss of points during the 3 day gap is most likely due to the all-zero penalty.  When a card reported a balance, the all-zero penalty went away.  AZEO is actually a different scoring topic than the all-zero penalty.

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Of course that's why rhe score fell. Not "most likely." That's the point of my post. Walmart MC reported 0 on 2/18 (down from $3.00). Points lost. THEN... QS reported a $3 balance on 2/21. Points came back as soon as balance reported. 

Again...that was the point of the post. I NEVER carry a balance except for the ONE card on which I maintain a $3.00 balance for AZEO.

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As the others mentioned, there's a difference between reporting AZEO and reporting no credit-mix AZ.

I also change up my one reporting card (due to spending in that given month) and during that window of no credit mix reporting, my 8 scores lose between 21-25 points. 

If I allow AZE2 or even AZE3, small balances, my 8 scores do not move, but my mortgage scores lose about 5-7 points.

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Not talking about credit mix. I have a credit mix of revolving and installment. 

[Aeon]

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@Jeffster1 wrote:

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@Aeon wrote:

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@Jeffster1 wrote:

Again...that was the point of the post. I NEVER carry a balance except for the ONE card on which I maintain a $3.00 balance for AZEO.

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But you tested the all zero penalty, not AZEO. To test AZEO you need to carry a balance on two or more cards and see how many points you lose. You may find that your point loss is within a "reasonable" range for you and AZEO doesn't make sense. Or you may find that you'll keep on with AZEO because, like you say, it's pretty easy for you to do. 

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Why would I keep a balance on two or three cards when I PIF? AZEO using one card is enough for me. I don't carry balances. Proving AZEO by witnessing the drop during the 3-days all my revolving accounts were at zero and then the increase back when ONE account reported $3.00 was enough proof for me.

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You can PIF and have a balance reporting; one does not negate the other.

You've proven that your no-reporting penalty is worth having at least one card reporting a balance, not that AZEO (the method, not your acct managment or balance preferences) "works" on your credit profile. Your AZEO "proof" was using an incorrect data set. If you want to isolate how AZEO impacts your profile, you're going to have to let more than one card report. You don't want to do that, which is fine. You have an optimal set up for what works for you; no need to change or test anything if there is very little gain to be had.

[OmarR]

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@Jeffster1 wrote:

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@OmarR wrote:

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@Jeffster1 wrote:

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@NoHardLimits wrote:

The loss of points during the 3 day gap is most likely due to the all-zero penalty.  When a card reported a balance, the all-zero penalty went away.  AZEO is actually a different scoring topic than the all-zero penalty.

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Of course that's why rhe score fell. Not "most likely." That's the point of my post. Walmart MC reported 0 on 2/18 (down from $3.00). Points lost. THEN... QS reported a $3 balance on 2/21. Points came back as soon as balance reported. 

Again...that was the point of the post. I NEVER carry a balance except for the ONE card on which I maintain a $3.00 balance for AZEO.

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As the others mentioned, there's a difference between reporting AZEO and reporting no credit-mix AZ.

I also change up my one reporting card (due to spending in that given month) and during that window of no credit mix reporting, my 8 scores lose between 21-25 points. 

If I allow AZE2 or even AZE3, small balances, my 8 scores do not move, but my mortgage scores lose about 5-7 points.

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Not talking about credit mix. I have a credit mix of revolving and installment. 

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Not during the several days when you had no revolving reporting and your score dropped. 

That was the reason for your score drop and what everyone is trying to explain to you. 

[Jeffster1]

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@OmarR wrote:

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@Jeffster1 wrote:

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@OmarR wrote:

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@Jeffster1 wrote:

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@NoHardLimits wrote:

The loss of points during the 3 day gap is most likely due to the all-zero penalty.  When a card reported a balance, the all-zero penalty went away.  AZEO is actually a different scoring topic than the all-zero penalty.

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Of course that's why rhe score fell. Not "most likely." That's the point of my post. Walmart MC reported 0 on 2/18 (down from $3.00). Points lost. THEN... QS reported a $3 balance on 2/21. Points came back as soon as balance reported. 

Again...that was the point of the post. I NEVER carry a balance except for the ONE card on which I maintain a $3.00 balance for AZEO.

---

As the others mentioned, there's a difference between reporting AZEO and reporting no credit-mix AZ.

I also change up my one reporting card (due to spending in that given month) and during that window of no credit mix reporting, my 8 scores lose between 21-25 points. 

If I allow AZE2 or even AZE3, small balances, my 8 scores do not move, but my mortgage scores lose about 5-7 points.

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Not talking about credit mix. I have a credit mix of revolving and installment. 

---

Not during the several days when you had no revolving reporting and your score dropped. 

That was the reason for your score drop and what everyone is trying to explain to you. 

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The reason for my score drop was due to the fact that during that 3-day period,, I had NO revolving balances. As soon as the $3.00 reported, this time on a different card, the score popped back up. My credit mix is irrelevant because I have a very small installment account and that remained constant. I PIF on all revolvers except for my chosen $3.00 balance card and have no need ro "test" carrying a small balance on a 2nd or 3rd card. The data proves that all I need to do is carry the ONE tiny balance to keep those points.

[OmarR]

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@Jeffster1 wrote:

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@OmarR wrote:

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@Jeffster1 wrote:

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@OmarR wrote:

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@Jeffster1 wrote:

---

@NoHardLimits wrote:

The loss of points during the 3 day gap is most likely due to the all-zero penalty.  When a card reported a balance, the all-zero penalty went away.  AZEO is actually a different scoring topic than the all-zero penalty.

---

Of course that's why rhe score fell. Not "most likely." That's the point of my post. Walmart MC reported 0 on 2/18 (down from $3.00). Points lost. THEN... QS reported a $3 balance on 2/21. Points came back as soon as balance reported. 

Again...that was the point of the post. I NEVER carry a balance except for the ONE card on which I maintain a $3.00 balance for AZEO.

---

As the others mentioned, there's a difference between reporting AZEO and reporting no credit-mix AZ.

I also change up my one reporting card (due to spending in that given month) and during that window of no credit mix reporting, my 8 scores lose between 21-25 points. 

If I allow AZE2 or even AZE3, small balances, my 8 scores do not move, but my mortgage scores lose about 5-7 points.

---

Not talking about credit mix. I have a credit mix of revolving and installment. 

---

Not during the several days when you had no revolving reporting and your score dropped. 

That was the reason for your score drop and what everyone is trying to explain to you. 

---

The reason for my score drop was due to the fact that during that 3-day period,, I had NO revolving balances. As soon as the $3.00 reported, this time on a different card, the score popped back up. My credit mix is irrelevant because I have a very small installment account and that remained constant. I PIF on all revolvers except for my chosen $3.00 balance card and have no need ro "test" carrying a small balance on a 2nd or 3rd card. The data proves that all I need to do is carry the ONE tiny balance to keep those points.

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Credit mix has 2 parts; revolving & installments.

When you had NO revolving balances reported, you were penalized for that portion of the mix. You went ALL ZERO.

As @NoHardLimits & @Aeon have already correctly explained, that is a different penalty/metric from AZEO.

You are confusing AZ and AZEO. They are different. Going from ONE card to ZERO cards is not an AZEO metric.

[SouthJamaica]

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@OmarR wrote:

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@Jeffster1 wrote:

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@OmarR wrote:

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@Jeffster1 wrote:

---

@OmarR wrote:

---

@Jeffster1 wrote:

---

@NoHardLimits wrote:

The loss of points during the 3 day gap is most likely due to the all-zero penalty.  When a card reported a balance, the all-zero penalty went away.  AZEO is actually a different scoring topic than the all-zero penalty.

---

Of course that's why rhe score fell. Not "most likely." That's the point of my post. Walmart MC reported 0 on 2/18 (down from $3.00). Points lost. THEN... QS reported a $3 balance on 2/21. Points came back as soon as balance reported. 

Again...that was the point of the post. I NEVER carry a balance except for the ONE card on which I maintain a $3.00 balance for AZEO.

---

As the others mentioned, there's a difference between reporting AZEO and reporting no credit-mix AZ.

I also change up my one reporting card (due to spending in that given month) and during that window of no credit mix reporting, my 8 scores lose between 21-25 points. 

If I allow AZE2 or even AZE3, small balances, my 8 scores do not move, but my mortgage scores lose about 5-7 points.

---

Not talking about credit mix. I have a credit mix of revolving and installment. 

---

Not during the several days when you had no revolving reporting and your score dropped. 

That was the reason for your score drop and what everyone is trying to explain to you. 

---

The reason for my score drop was due to the fact that during that 3-day period,, I had NO revolving balances. As soon as the $3.00 reported, this time on a different card, the score popped back up. My credit mix is irrelevant because I have a very small installment account and that remained constant. I PIF on all revolvers except for my chosen $3.00 balance card and have no need ro "test" carrying a small balance on a 2nd or 3rd card. The data proves that all I need to do is carry the ONE tiny balance to keep those points.

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Credit mix has 2 parts; revolving & installments.

When you had NO revolving balances reported, you were penalized for that portion of the mix. You went ALL ZERO.

As @NoHardLimits & @Aeon have already correctly explained, that is a different penalty/metric from AZEO.

You are confusing AZ and AZEO. They are different. Going from ONE card to ZERO cards is not an AZEO metric.

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Not so. The "Credit mix" factor isn't dependent on what is open or has a balance. It includes both open and closed accounts.

[markbeiser]

You still have not tested the difference between AZEO and letting multiple cards report a balance.
The most you have done is somewhat confirm that there is a penalty for having all revolving accounts report a zero balance.

AZEO only grants a small bonus. The penalty for having All Zero is significantly higher than any bonus you get for having AZEO.
Aggregate and per card utilization are also MUCH more significant than AZEO.

I did AZEO for a couple of months to get a few extra points on my mortgage scores to qualify for the best HELOC rates, got prime+0%, just a couple of points on my experian mortage score made the difference
After dropping AZEO I lost less than 15 points, most of which was likely due to my aggregate utilization creaping up over 10%, and one card reporting 32%.
I've gained some of those points back by dropping my utilization back down to 0% on the card that hit 32%, and will gain more when I get my aggregate back down below 10%.

Then again, the new HELOC account has not reported yet, so I may be in for a significant drop when it does...😐

[OmarR]

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@SouthJamaica wrote:

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@OmarR wrote:

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@Jeffster1 wrote:

---

@OmarR wrote:

---

@Jeffster1 wrote:

---

@OmarR wrote:

---

@Jeffster1 wrote:

---

@NoHardLimits wrote:

The loss of points during the 3 day gap is most likely due to the all-zero penalty.  When a card reported a balance, the all-zero penalty went away.  AZEO is actually a different scoring topic than the all-zero penalty.

---

Of course that's why rhe score fell. Not "most likely." That's the point of my post. Walmart MC reported 0 on 2/18 (down from $3.00). Points lost. THEN... QS reported a $3 balance on 2/21. Points came back as soon as balance reported. 

Again...that was the point of the post. I NEVER carry a balance except for the ONE card on which I maintain a $3.00 balance for AZEO.

---

As the others mentioned, there's a difference between reporting AZEO and reporting no credit-mix AZ.

I also change up my one reporting card (due to spending in that given month) and during that window of no credit mix reporting, my 8 scores lose between 21-25 points. 

If I allow AZE2 or even AZE3, small balances, my 8 scores do not move, but my mortgage scores lose about 5-7 points.

---

Not talking about credit mix. I have a credit mix of revolving and installment. 

---

Not during the several days when you had no revolving reporting and your score dropped. 

That was the reason for your score drop and what everyone is trying to explain to you. 

---

The reason for my score drop was due to the fact that during that 3-day period,, I had NO revolving balances. As soon as the $3.00 reported, this time on a different card, the score popped back up. My credit mix is irrelevant because I have a very small installment account and that remained constant. I PIF on all revolvers except for my chosen $3.00 balance card and have no need ro "test" carrying a small balance on a 2nd or 3rd card. The data proves that all I need to do is carry the ONE tiny balance to keep those points.

---

Credit mix has 2 parts; revolving & installments.

When you had NO revolving balances reported, you were penalized for that portion of the mix. You went ALL ZERO.

As @NoHardLimits & @Aeon have already correctly explained, that is a different penalty/metric from AZEO.

You are confusing AZ and AZEO. They are different. Going from ONE card to ZERO cards is not an AZEO metric.

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Not so. The "Credit mix" factor isn't dependent on what is open or has a balance. It includes both open and closed accounts.

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Paying off all of your installment and/or revolving accounts (no balance)and letting them report will drop your score.

That's not an AZEO penalty.

[Thomas_Thumb]

The actual Fico scoring factors in play here are:

1) Number of accounts with balances

2) Recent vs no recent revolving activity

3) Revolving credit utilization on individual accounts.

4) revolving credit utilization in aggregate.

1) The 1st factor, # of accounts, includes all card types with the exception of AU cards. The "ideal" number of accounts with balances is ZERO. That being said, Fico does not penalize for one account with a balance. For most profiles, multiple accounts can report balances without any penality. I can let 3 of 6 (50%) report without any associated score drop regardless of Fico model or CRA. On Fico 8, even when all cards report balances my score only drops 5 points. Certainly better to have 2 or 3 cards reporting than zero.

2) The second factor looks for revolving account activity. Accounts with a zero balance are interpreted by Fico as not recently active. If all revolving accounts show $0, then the no recent activity penalty is assessed. In reality it's NOT an all zero penalty as having no balances is considered good (per #1 above). 

The problem here is accounts can be actively used during a cycle but if all charges are paid before a statement cuts the reported balance is zero. Also, it is possible to have multiple cards report balances and receive the penalty. Fico 8 & Fico 9 models exclude balances on charge cards and AU cards when looking for activity. Some, but not all, store cards are excluded as well. As a result, if you only have one card report a balance, it is best to use a bank card (which includes Discover card and AMEX credit cards but not AMEX charge cards).

I had both an Amex charge card and an AU Visa bank card report balances but was hit with the "no recent revolving activity" penalty. The penalty is typically 10 to 20 points. I thought I was safe with 2 cards showing balances but my report displayed no recent revolving activity as a reason code.

3) The third factor looks at how heavily credit is being leveraged on each revolving account. For Fico 8 and Fico 9, charge cards are ignored in this evaluation as are AU accounts. Utilization on each account is calculated. Then Fico compares utilizations and assigns risk based on highest % utilization of any card. If highest utilization exceeds established thresholds, points are deducted from Fico score. There are no penalties associated with a utilization up to 9% regardless of profile. In reality, no penalty for an individual card utilization up to 29% for most profiles. (Young/thin files with recent credit added are more prone to a penalty). A $10k card could report a $800 balance without concern of a penalty and most likely a $2800 balance as well. Just pay the card off by due date to avoid an interest charge. No score benefit in managing to ensure only $3 or $5 reports.

4) The fourth factor evaluates overall revolving credit management by evaluating aggregate utilization in %. Charge card accounts are excluded from the calculation for all Fico models except Fico 98 (EX score 2). It also excludes AU accounts for Fico 8 and newer models. All revolving balances are totaled and then compared against the aggregated credit limits. Aggregate utilization is determined and assigned a risk level independent of individual card utilization. Scoring penalties kick in if the utilization is too high. Under 9% generally has no associated penalty. However, some posters have reportedly experienced a minor score penalty at 5% UT.

In conclusion, AZEO is a misnomer and its practice can lead to less than optimal results if the above scoring factors are misunderstood. Some posters have felt (incorrectly) that a balance must be carried over which can lead to unnecessary interest penalties. Others worry about a 2nd card accidentally reporting a "small" balance and "damaging" their score. Again, unfounded. A point drop, if any, should not exceed 5 points .

Then there is the small balance debate. Small, from a Fico penalty perspective, is relative to a cards credit limit. For a $10k card, a $800 balance would certainly be small. No Fico score benefit to limit reporting to $5 or $10 for that card. Even for those with a single, low limit card of $500, a balance of $40 could report without a "point in time" utilization penalty. BTW - for single card profiles, it is always better score wise to have the card report a balance (no penalty) vs not reporting (suffer no recent revolving activity penalty).

The intent of the "AZEO" strategy is to avoid all point deducts relating to any of the above 4 factors. I personally have never practiced AZEO but, when necessary, I may adjust payments to avoid any potential penalty. For me that means under 9% aggregate utilization, under 29% utilization on cards that do report a balance and have no more than 3 cards (50%) report a balance. Then PIF all balances.

[Remedios]

Unless your Walmart is Mastercard, AZEO doesn't really "work" that well. 

Store cards should not be used if one wants to torment themselves with AZEO  

(I know yours is, just putting it there for others).