Credit score impact from balance

[Anonymous]

Just figured I’d let you know because it was a big unknown for many years and Cassie just resolved it

[thornback]

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@Anonymous wrote:
Just figured I’d let you know because it was a big unknown for many years and Cassie just resolved it

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Appreciate it.   And I will try my best to make my mind accept the change.

[donkort]

If you have other cards with lower utilization, the score loss would be less.

If you have $10,000 in credit limits, and all other hypothetical cards are reporting a zero balance, your utilization would be 15%.

If there's a total balance of $1,500 within all the other hypothetical cards, your utilization would be 30%.

[donkort]

As and addendum, I should point out, the $1,500 spent would max out the card.  You should pay at least about $250 towards that card so you can get the utilization under 88.9%. 

[Anonymous]

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@thornback wrote:

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@Anonymous wrote:
The point is the threshold is under for example 29%. We thought due to a floating zero error that it would be rounded up and you had to hit 8.9 but that’s not true, Just Hass to be under 9%.

Just Has to be under 9%, reported. Now if interest is a concern, oh course taking it into account, but the thresholds no longer have .9 on them, they just have to be below and under the whole number.

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Gotcha. 

Well... just an FYI... I'm a creature of habit so will likely continue spreading the .9 thresholds around the forums for the forseeable future so please don't come at me for it 😂😜

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lol This is exactly what I expected to happen. That 'under 8.99 to avoid a fractional rounding error' recommendation goes back a long way here. There is certainly no harm in adhering to that, but it isn't technically necessary.

TLDR: Utilization less than or equal (≤) to one of 9%, 29%, 49%, 69%, or 89% works just fine to avoid the next higher interval.

My theory: FICO's internal algorithm is comparing to one of 0,5,10,30,50,70, and 90 after data preparation (taking the ceiling of actual util). Only because, as a programmer, even numbers are nicer to look at in source code.

Proof: Testing greater than 8.99% but less than 9.00%  

[Anonymous]

Well said Cassie.

[donkort]

I got a big score bump when my utilization went under 6%;  and a lesser one when I went below 5%.

[Thomas_Thumb]

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@Anonymous wrote:

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@thornback wrote:

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@Anonymous wrote:
The point is the threshold is under for example 29%. We thought due to a floating zero error that it would be rounded up and you had to hit 8.9 but that’s not true, Just Hass to be under 9%.

Just Has to be under 9%, reported. Now if interest is a concern, oh course taking it into account, but the thresholds no longer have .9 on them, they just have to be below and under the whole number.

---

Gotcha. 

Well... just an FYI... I'm a creature of habit so will likely continue spreading the .9 thresholds around the forums for the forseeable future so please don't come at me for it 😂😜

---

lol This is exactly what I expected to happen. That 'under 8.99 to avoid a fractional rounding error' recommendation goes back a long way here. There is certainly no harm in adhering to that, but it isn't technically necessary.

TLDR: Utilization less than or equal (≤) to one of 9%, 29%, 49%, 69%, or 89% works just fine to avoid the next higher interval.

My theory: FICO's internal algorithm is comparing to one of 0,5,10,30,50,70, and 90 after data preparation (taking the ceiling of actual util). Only because, as a programmer, even numbers are nicer to look at in source code.

Proof: Testing greater than 8.99% but less than 9.00%  

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The thresholds were originally listed as less than 9%, less than 29%, less than 49%, less than 69% and less than 89%. It was not until later that certain posters re-stated them as 8.9% or 8.99%. An aggregate threshold of 4% to 5% was surmized from Inverse data in 2016 but, no iterations were done to zero in on a specific value and confirm (he had 3 cards at the time). 

Note: Although aggregate and individual card revolving utilizations are scoring attributes, aggregate impact on score is dominant (as expected).

https://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Credit-utilization-and-scores/m-p/4941833#M124163

Side note: Some information from Experian that was reported back in 2016 mentions a card max out threshold of 90%.

[AllZero]

Thank you @Thomas_Thumb , @Anonymous , @Anonymous  for your insight!