Crossed Two Utilization Thresholds With No Score Change

[Anonymous]

Excellent point CGID regarding TT's potential maxed out score buffer.  I was aware of this, but forgot about TT's 850 scores and the relevance they have to the data he provided.

[ls2016]

Individual Card went from 0% to 98% util., lost 10-14 pts across all 3 CRBs 2 months ago.
Same card went from 98% to 68% util, gained 8-10 pts back across all 3 CRBs last month.
This month, same card went from 68% to 48% util, no score change at all. Was bummed about this.
Overall util ranged from 6 to 4% throughout this entire ordeal. Dirty scorecard, fico 8 scores range from 655-670, fico 9 scores are 15 pts higher on each bureau. One CLI (of $1800) occurred throughout the last 2 months, which contributed to the overall util decrease.
Did a BT, so Sept should report from 48% to 0%. Since, I just switched around balances, I'm not expecting any score change. Just sharing!

[Anonymous]

Nice data above, thanks for sharing it.  Out of curiosity, how many of your cards (or what percentage of your cards) were reporting a balance during that time?

[Thomas_Thumb]

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@Anonymous wrote:

Excellent point CGID regarding TT's potential maxed out score buffer.  I was aware of this, but forgot about TT's 850 scores and the relevance they have to the data he provided.

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High card utilizations without score change have been discussed in a few other threads over the last couple years. In two of those threads Revelate disclosed  allowing a card to report high utilizations as well with zero point drop in score. As with the above poster, his profile was dirty at the time. It does appear (both in Fico presentations and poster data) that impact of changes in utilization may be muted on dirty scorecards.

The key point conditions for no score change on a highly utilized card not in max out territory (clean or dirty profile) are - IMO:

1) Aggregate utilization is only mildly influenced and remains in "optimal territory".

2) The highly utilized card is established. I define established as at least 3 years old.

3) The card is routinely used. Routinely meaning multiple purchase every year but not necessarily every month.

4) Profile has a well established history, minimum 10 year history.

5) Sufficient AAoA- minimum of at least 2 years.

6) Minimum # open credit cards - say 5

Additional low => high => low utilization data points from posters with a lengthy credit history that have an extablished, low limit card, would be helpful.

Key criteria are maintaining aggregate utilization in the lowest category and ideally maintaining # cards reporting balances constant.

[Anonymous]

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@Thomas_Thumb wrote:

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The key point conditions for no score change on a highly utilized card not in max out territory (clean or dirty profile) are - IMO:

1) Aggregate utilization is only mildly influenced and remains in "optimal territory".

2) The highly utilized card is established. I define established as at least 3 years old.

3) The card is routinely used. Routinely meaning multiple purchase every month on average but not necessarily every month.

4) Profile has a well established history, minimum 10 year history.

5) Sufficient AAoA- minimum of at least 2 years.

6) Minimum # open credit cards - say 5

 

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TT, thanks for the additional info here.

A couple of points you make above with 2 & 3 I find interesting.  Does the FICO algorithm really "see" how established a card is?  How so?  Also how does it determine if a card is routinely used?  I wasn't aware that the algorithm could tell if a card was being swiped 1 time or 100 times in a cycle, just whether or not it had "usage."  Do you believe these sort of things are behind the scenes stuff that goes on?

[Thomas_Thumb]

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@Anonymous wrote:

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@Thomas_Thumb wrote:

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The key point conditions for no score change on a highly utilized card not in max out territory (clean or dirty profile) are - IMO:

1) Aggregate utilization is only mildly influenced and remains in "optimal territory".

2) The highly utilized card is established. I define established as at least 3 years old.

3) The card is routinely used. Routinely meaning multiple purchase every month on average but not necessarily every month.

4) Profile has a well established history, minimum 10 year history.

5) Sufficient AAoA- minimum of at least 2 years.

6) Minimum # open credit cards - say 5

 

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TT, thanks for the additional info here.

A couple of points you make above with 2 & 3 I find interesting.  Does the FICO algorithm really "see" how established a card is?  How so?  Also how does it determine if a card is routinely used?  I wasn't aware that the algorithm could tell if a card was being swiped 1 time or 100 times in a cycle, just whether or not it had "usage."  Do you believe these sort of things are behind the scenes stuff that goes on?

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Yes the Fico algorithm certainly knows if an account is new or not. Clearly it knows all account ages as it calculates AAoA. Presentations by Fico have mentioned a list of over 400 attributes. That list has never been published as far as I know.

You are correct that the algorithm can not know how many times a card is used in a month - just that is has been used in a given motnth. So, my wording was poorly chosen - I should have said multiple purchases a year but not necessarily every month.

I do believe there are conditional factors that come into play behind the scenes in scoring. Thus, the reason why some see changes in score with crossing individual UT thresholds while others do not. It is not all attributable to buffering. Key point is "believe". That is where hypothesis testing comes into play.

 - With all other factors being close to the same, is high utilization on a low limit card treated differently than on an aged card? I have seen something akin to this where a couple profiles relatively new to credit with a few new cards reported score drops in excess of 100 points due to an increase in utilization. Typically the impact would have been much less.

[ls2016]

BBS:

Just that one card carried a balance, with an exception of an Amex card with a $4.00 balance/$1,000 limit. So, technically, 2 cards reported a balnace out of a total of 15 cards, all others at 0 balance.  

[Anonymous]

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@Thomas_Thumb wrote:

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You are correct that the algorithm can not know how many times a card is used in a month - just that is has been used in a given month. So, my wording was poorly chosen - I should have said multiple purchases a year but not necessarily every month.

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Can you tell us more how you believe the major scoring algorithms (e.g. FICO 8 Classic) detect whether a card has been used multiple times throughout a year?

It is true that the trended data that CC issuers have begun supplying the CRAs would enable a model developed today or in the near future to do that.  But models like FICO 8 were developed long before trended data became available.  As far as I know, there's no evidence that even FICO 9 is using trended data (though according to press releases Vantage 4 will be doing that.

Current models (e.g. FICO 8) certainly might use the Date of Last Activity (DOLA) since that has been around for a long time, but that would only give the algorithm an idea of the last time the card was used.  If the DOLA was a month ago, the algorithms would have no way to detect whether the card had been used several times before that, or conversely whether the card had not been used at all in the 24 months preceding it.

Am I missing something?

[Thomas_Thumb]

Credit cards report balances each month. If I use a card during a month it will report a non zero balance which can be an indicator of activity. However, that is not a robust indicator as some, particularly on this forum, will pay before statement date thus showing a zero balance. The scheduled payment field was another potential indicator of activity but that may not be robust for the same reason.

End of the day, the question remains why can some profiles report high utilization on a card (above 70%) with no change in score while others can not. The list I provided is not definitive but rather criteria to evaluate against to zero in on what's different between those that see score shifts and those that don't. Both situations are known to occur.

This is some good dialog and hopefully more data is forthcoming.

[Anonymous]

TT, do we have any data points regarding the "highly established" card with high utilization relative to one that isn't highly established?  I suppose the best way to test this would be the following and I guess my question is whether or not anyone has done (and posted on here) doing this:

Someone has a bunch of CCs.  They are at AZEO except 1 card.  That one card is reporting high utilization, say 70%+.  That card is a highly established card, which you define as 3+ years old.  The next cycle, they bring that card down to a $0 reported balance and move their 70%+ utilization reported balance to a different card, except this card is not highly established.  For the sake of this illustration let's say it's < 1 year old.  Of course this excercise could very well work in the reverse, where the younger aged card is used first, followed by the aged card second.

Has anyone done this and reported scoring results?