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Credit utilization from 3% to 1% result in score change??

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Moderator

Re: Removing second authorized user account?? Help!


@Anna123 wrote:
I am an authorized user on 2 Bank of America credit cards with perfect credit history and same history length. I had a 25 point score increase being added to the first one, with no credit score change being added to the second one a week later. My credit utilization is currently at 3%. Removing the second BoA credit card would put me back at 1% credit utilization. My question is would my score change? Has anyone had experience in this situation? Thanks!!

Going from 3% to 1% utilization would be unlikely to show any significant difference in FICO scores, unless it also caused other factors to change.  Let's say you have 5 cards total, and those are the only two showing any balance at the last statement, you might gain a few points at best for having only one card reporting a balance.  It really depends on your overall profile.  If the account is the same age or older than your average age of accounts, you may actually see a decrease in FICO scores due to your average account ages falling if it is removed.  Many factors come into play here.

 

Edited to add: I've merged your two threads together after moving the new one to Understanding FICO Scoring.

Message 11 of 21
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Super Contributor

Re: Credit utilization from 3% to 1% result in score change??


@SouthJamaica wrote:

And I have noticed that almost every time my aggregate utilization changes a full percent my FICO 8 score changes. In my profile the difference between 9% and 1% could be 15 points.


When you say 9%, are you actually talking 8.9% and that you're not crossing the well known threshold there?  If you see ~15 points up to that threshold point, how many do you see in crossing it?

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Super Contributor

Re: Credit utilization from 3% to 1% result in score change??


@BrutalBodyShots wrote:

@SouthJamaica wrote:

And I have noticed that almost every time my aggregate utilization changes a full percent my FICO 8 score changes. In my profile the difference between 9% and 1% could be 15 points.


When you say 9%, are you actually talking 8.9% and that you're not crossing the well known threshold there?  If you see ~15 points up to that threshold point, how many do you see in crossing it?


I watch the rounded percentages, so when I say 9% I'm referring to a rounded 9%, which could be 8.9% in actuality.

 

I personally haven't experienced much different behavior in the 9 to 15% area than in the 1 to 9% area. I.e. in both regions, I tend to find that almost every whole number change in aggregate utilization means points won or lost.


Total revolving limits 654000 (575000 reporting) FICO 8 EQ 714 TU 731 EX 713

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Valued Contributor

Re: Credit utilization from 3% to 1% result in score change??

I think you should expect a score decrease. The hit to account age with no crossing of a utilization threshold to offset it.

Message 14 of 21
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Super Contributor

Re: Credit utilization from 3% to 1% result in score change??


@BrutalBodyShots wrote:

@BH1985 wrote:

It may be because I went to 50% utilization on one of my cards. I guess that's an important detail I left out.


Yes, I believe that was what caused your score gain then.  It would be interesting to see the same test replicated on your file without a single card crossing over a threshold, say 28.9%.  Of course to accomplish that you'd need to raise balances most likely on multiple cards, so a new variable possibly gets introduced in additional cards with balances.  Ideally the best way to do it would be with your highest limit bank card, if you have one that's got a limit great enough to increase aggregate utilization 3% without crossing a threshold on that card.


I think BH's score dropped because a card went up over 50%  Smiley Happy  Reduced by 10 points in the earlier comment.

High Bal Jan 2009 $116k on $146k limits 80% Util.
Oct 2014 $46k on $127k 36% util EQ 722 TU 727 EX 727
April 2018 $18k on $344k 5% util EQ 806 TU 810 EX 812
Jan 2019 $7.6k on $360k EQ 832 TU 839 EX 831
Message 15 of 21
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Established Member

Re: Credit utilization from 3% to 1% result in score change??

Both cards have the same account age. 1 account having 1% credit utilization and the other having 3%. I’m wanting to remove the AU account with 3% CU.
Message 16 of 21
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Valued Contributor

Re: Removing second authorized user account?? Help!

I went from 8% to 5% today. No change on EX or EQ FICO 8. Waiting on TU like....Zzzzz

Thats actual 8% not 8.9

 

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Super Contributor

Re: Credit utilization from 3% to 1% result in score change??

anna123 there is no threshold that is known between 1% and 3%. Some profiles have a threshold at 4%.

If you realized any score change, it would be due to the change in number of accounts with the balance, or it would be due to the change in your average age of accounts.

Depending on how many accounts you have, having one less with a balance may or may not result in a small score increase.

Again depending on ages, if you get rid of that older card, it may result in a score decrease due to your average age of accounts decreasing.

No doubt BH’s change came from changing from 50% of accounts. But we don’t know that is the case with you OP, because we don’t know anything about your profile.
For a collection of our current FICO scoring wisdom, updated as we learn, read the following. Watch the revision dates on the bottom of the first 8 posts as they are regularly updated: Link to Scoring Primer.


RIP:

    




Updated June 2020, unless otherwise noted. I took an HP on EX, will reflect on next update.

(Forgive typos, mobile.)(Everything said is Just IMHO.)

In order to better answer your questions and record your DPs, please provide your profile stats: Any baddies? Severity and recency? (clean/dirty), Number of accounts, both open and closed on CRs (thick/thin), AoOA? (Mature/young), AOYRA-Age of Youngest Revolving Account (new accounts/no new accounts)? Open/closed loan on CR?
For example, mine is clean/thick/mature/new account, with open loan on record.
If you don't know where you fall, just detail any baddies, your number of open and closed accounts, AoOA, AOYRA and whether you have a loan on record to start.

For utilization questions, list individual and aggregate utilizations, revolving and installment, please.
Message 18 of 21
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Community Leader
Senior Contributor

Re: Credit utilization from 3% to 1% result in score change??

Not to derail this, but in reference to SJ’s point changes with each percentage point of utilization, I think back to a discussion about your profile and points earlier in the year. I don’t recall if this was ever put to bed or not so forgive me if it was, but I wonder if your changes in score with miniscule UTI changes is simply due to the dollar values in play.

Your aggregate CL is enormous, and going from 1% to 5% UTI even only on your reported limits is still a change of over $23k. I wonder when looking at the fringe profiles like yours, if some scoring factor exists that’s simply related to dollars and comes into play, as in “it’s only 4% but that’s still a big chunk of cash”.

Now, 23 grand may not be a significant amount of money to you (I don’t know your personal details, not my business), but to the public at large that’s a pile of money and for most people that much difference in balances would reflect a major change in financial conditions. Maybe there’s something in the math to consider large dollar values irrespective of what percentage of total limits they represent for a person when the total CLs grow to truly monstrous sizes. And since income isn’t factored into scoring, your ability to repay it would not have bearing on the effects on your scores.


Rose Gold NPSL | BCP | Delta Gold | Hilton Surpass | Hilton Honors | PenFed PCR | IT Cash | IT Chrome | GHSFCU Visa Plat | Quicksilver | Target | VS | Home Depot | Lowes | Sams MC | Firestone | Overstock | Kohl’s

5/24, 1/24, 76445/24, who cares #HappyWithAmex





TCL $93,100 | Agg. Util under 5%
Message 19 of 21
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Super Contributor

Re: Credit utilization from 3% to 1% result in score change??


@ImTheDevil wrote:
Not to derail this, but in reference to SJ’s point changes with each percentage point of utilization, I think back to a discussion about your profile and points earlier in the year. I don’t recall if this was ever put to bed or not so forgive me if it was, but I wonder if your changes in score with miniscule UTI changes is simply due to the dollar values in play.

Your aggregate CL is enormous, and going from 1% to 5% UTI even only on your reported limits is still a change of over $23k. I wonder when looking at the fringe profiles like yours, if some scoring factor exists that’s simply related to dollars and comes into play, as in “it’s only 4% but that’s still a big chunk of cash”.

Now, 23 grand may not be a significant amount of money to you (I don’t know your personal details, not my business), but to the public at large that’s a pile of money and for most people that much difference in balances would reflect a major change in financial conditions. Maybe there’s something in the math to consider large dollar values irrespective of what percentage of total limits they represent for a person when the total CLs grow to truly monstrous sizes. And since income isn’t factored into scoring, your ability to repay it would not have bearing on the effects on your scores.

It's possible. But my gut feeling is that it's all based on percentages, not dollar amounts.

 

I didn't always have these credit limits. They came about gradually over time. So I've had experience with lower limits too.

 

But your theory could be right; I just don't know. I can tell you that there is something which is possibly more distinguishing about my profile... its newness. My average age of accounts is still under 4 years and I always seem to have some recent inquiries and some recently opened accounts. And it's also possible that another oddity -- the 31+ year age of my oldest account -- puts me in a scorecard that expects things to be different than they are.


Total revolving limits 654000 (575000 reporting) FICO 8 EQ 714 TU 731 EX 713

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