Components of Utilization

[Anonymous]

After some changes in utilization, my score took a surprising dip of 25pts. Nothing notable besides utilization changed during this time:

5/25/2018 Aggregate 8.3% 787 EX

Discover 2.8%

Chase AU 0%

Chase AU 17.6%

Chase AU 8.2%

5/30/2018 Aggregate 12.3% 779 EX

Discover 2.8%

Chase AU 0%

Chase AU 33%

Chase AU 8.2%

6/14/2018 Aggregate 12.1% 761 EX

Discover 0%

Chase AU 0%

Chase AU 33%

Chase AU 9.1%

When total utilization crossed the 9% cutoff to 12.3% and the Chase AU went up to 33% (29% threshold crossed), my score dropped 8pts to 779, which seems reasonable. However, the unclear part is the 18pt drop when the other Chase AU rose to 9.1% (9% cutoff) and Discover reported no balance (3/4 -> 2/4 cards with balance).

1) Shouldn't the crossing of a higher and multiple thresholds result in a larger score impact? 9% vs 29% in this case.

2) Shouldn't lowering the percentage of cards with a balance (approach AZEO) have a positive impact? This could be overshadowed by 1) above.

3) My assumption is that AU cards are treated identically in score calculation and the 18pt drop has nothing to do with the number of non-AU cards with balances dropping from one to zero during that time.

I'm planning to apply for one or two cards when July comes and really wanted to improve my score as much as possible, but it's going in the wrong direction! Haha it just seems strange that the crossing of two utilization thresholds (9% aggregate and 29% individual) had a weaker negative effect than the passing of a 9% individual cutoff plus the slight positive of reducing number of cards with a balance. Hope this makes sense and will glady clarify.

[Anonymous]

Some FICO models ignore AU accounts when asessing the penalty for having all accounts at zero.

Therefore it is likely that FICO viewed you as having all your accounts at zero in the major drop you describe.

Always have one card showing a balance.  That one card should be:

*  A true credit card (not a charge card)

*  A card in your name (not an AU card)

*  A card with a balance of at least $5.

*  A card with a credit limit of < 34.9k

[Anonymous]

The best practical solution prior to applying for the cards is to have the card in your name report a small balance (like $10) and ask all the card owners for the AU cards to pay their balances to zero.

[Anonymous]

Okay, that was my sneaking suspicion. Thanks and this is for FICO 8 by the way.