@KeithW wrote:
@Thomas_Thumb wrote:
@KeithW wrote:Two months ago I paid my revolving credit down on several cards from 70% individual util to under 28% and my combined util from 60% to 42%. The new balances all reported, but no significant score increase. Only 5 points on one agency and none on the others.
Question: Are you on a dirty scorecard? In other words do you have lates, collections, chargeoffs or the like in your file? Dirty scorecards donot put as much weight on revolving utilization as do clean scorecards. So point gain is less.
With respect to card utilizations and scoring, Fico scores you based on the card with the highest utilization %. So, bringing "several" cards down from 70% to under under 28% won't do much (for card util scoring) if you left one at 50% or 70%. The drop from 60% aggregate to 42% aggregate should be worth 5 points or so - imo depending on clean/dirty scorecard status.
The loan closure followed by opening a new loan will come into play scorewise - not sure how or when as there are a few questions that would need to be answered such as:
* Was the old car loan the only open loan on file?
If yes what was the balance to original loan ratio just prior to closure? If not, what other open loans do you have?
* Has it reported closed?
* You say the new loan has yet to report as open. If there is a lag where the old one reports closed before the new one reports open, you could see a "no open loans" score drop - assuming it was your only active loan.
* If the old loan was nearly paid off and reported closed at the same time as the new loan reports, you could still experience a significant score drop due to the high B/L ratio on the new loan.
* when were the inquiries for the new loan and what CRAs are they on? The inquiries will drop score but there is a 30 day buffer before the impact is realized. Side note - a group of associated inquiries within a 45 day period will only count as 1 on Fico 8.
We have two auto loans. Mine is half paid off and my wife's is the one we traded. The closed account was reported, but the new line hasn't been reported yet. Our old loan was 19% remaining on it and the new of course will be 100%.
My record is pretty clean with no negatives other than 3x30 day late on auto payments in the past 7 years. Only one was in the past 3 years.
A few months back Synchrony closed all of my store card accounts, Lowes, Briggs and Stratton, B&H Photo, and Adorama. They accounted for $23,000 in available credit and each had a balance of less than 50%. Those are showing on my report as closed by the creditor, but show the utilization like I still have the previous credit limit. Could those actually be scored like they are maxed out even though it doesn't show that way on the report?? Just a thought.
In my opinion, if the credit reports are showing them as still having the previous credit limit, they are not being reported as maxed out accounts, but it is likely that your aggregate utilization is still feeling the burden of having the debt but not the available credit.
@Thomas_Thumb wrote:
@SouthJamaica wrote:
@Thomas_Thumb wrote:
@KeithW wrote:Two months ago I paid my revolving credit down on several cards from 70% individual util to under 28% and my combined util from 60% to 42%. The new balances all reported, but no significant score increase. Only 5 points on one agency and none on the others.
Question: Are you on a dirty scorecard? In other words do you have lates, collections, chargeoffs or the like in your file? Dirty scorecards donot put as much weight on revolving utilization as do clean scorecards. So point gain is less.
With respect to card utilizations and scoring, Fico scores you based on the card with the highest utilization %. So, bringing "several" cards down from 70% to under under 28% won't do much (for card util scoring) if you left one at 50% or 70%. The drop from 60% aggregate to 42% aggregate should be worth 5 points or so - imo depending on clean/dirty scorecard status.
The loan closure followed by opening a new loan will come into play scorewise - not sure how or when as there are a few questions that would need to be answered such as:
* Was the old car loan the only open loan on file?
If yes what was the balance to original loan ratio just prior to closure? If not, what other open loans do you have?
* Has it reported closed?
* You say the new loan has yet to report as open. If there is a lag where the old one reports closed before the new one reports open, you could see a "no open loans" score drop - assuming it was your only active loan.
* If the old loan was nearly paid off and reported closed at the same time as the new loan reports, you could still experience a significant score drop due to the high B/L ratio on the new loan.
* when were the inquiries for the new loan and what CRAs are they on? The inquiries will drop score but there is a 30 day buffer before the impact is realized. Side note - a group of associated inquiries within a 45 day period will only count as 1 on Fico 8.
My experience has been contrary to that. I found that when I could reduce the number of accounts with > 50% utilization, even though some were left above that level, I got some very significant score boosts. Sometimes, the accounts were lumped together. E.g., things like this happened: with getting one or two down, the gain may have been slight, but when I got a third down, the gain may have been quite substantial.
Fico explicitly states their models look at highest card utilization in the Tom Quinn and Tommy Lee Q&A thread. You may want to look thru that thread again. It also mentions considering aggregate revolving balances in $ terms as well as utilization % as I recall. Reason code statements allude to this as well.
There was a statement that they look at the highest utilized account, but no discussion of whether the number of high utilization accounts is a factor. My experience has been that it is a factor, and that lowering even one or a few high utilization accounts to lower utilization can cause significant point gains even though higher utilization accounts remain:
We've had this discussion before, and I respectfully disagree with your opinion, which I did on more than one occasion espouse until I learned from hard knocks that it was not correct. Unfortunately my conclusions are based on personal experience. I hope that you never have the same personal experience -- which requires first being mired down in multiple high utilization accounts before 'testing'.
I have a spreadsheet setup to keep track of my accounts. The ones in red are the ones Synchrony closed within 3 days of each other, but still show the balance and full credit limit on my reports. My last FICO report is still showing my total revolving utilization at 53%. I will update if I have any score jumps when things update. My wife's target card isn't listed since I don't pay on it or use it, but I checked and the utilization on that one is 84%.
I also updated my scores in my signature to be current as of May 7th.
@Thomas_Thumb wrote:As mentioned, the facts remain - Fico looks at the highest card utilization as a scoring metric. So, not leaving a highly utilized revolving account in play is a sound strategy with proven results.
The only time to leave high UT stragglers in play is for taking advantage of 0% interest promos with the knowledge that scores will suffer.
As an example it is better to drop all 70% ut cards below 49% than a few below 29% while leaving some stragglers at 70%. The highest ut card is always in play for score.
Don't recall seeing anything about % or # of cards above certain utilization levels as a scoring factor. We know Fico looks at #/% of accounts with balances in scoring but, just balance vs no balance.
I understand not all scoring factors are presented in reason code/statement lists. Other non disclosed metrics undoubtedly play a role. Your score changes happened.
Yes it is better to bring all 70% accounts down to 48% than it is to bring just a few down to 28%, which is exactly what I have been saying.
@KeithW wrote:I have two accounts that I have jointly with my wife that I never use and she pays. Both are near 80% utilization. I will knock those two down next and see if they were holding me down. Luckily they only have 2k limits.
There isn't the slightest bit of doubt that they are holding you down.