Difference in having more then one card report a balance?

[MattH]

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@haulingthescoreup wrote:
I usually lose 7 - 10 points on EQ for having 2 report. But I gain points on TU. It's a function of my current score and scoring bucket.

If you've gotten to the point where there's nothing left to work on, there's a lot to be said for having no accounts report, then 1, then 2, and see what happens to your scores each time. For those with scores under 760 or so, you will lose points if all report 0. For those at 760 or above, you will lose points on EQ or be equal, and gain points on TU.

As others have pointed out, if you're not headed for an app, there's no reason to worry about this. But for those of us who die a thousand deaths when we lose two points, this can be an interesting exercise.

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Yep, TU cares more about total dollars owed, EQ cares more about number of accounts with balances.  Back in the days when we could get EX FICO scores, I observed that EX cared more about percentage of credit limits utilized.  My wife and I both have good incomes, carry very little cash so we put lots of purchases on all our cards, and pay in full every month.  Because our cards have high limits, this pattern of usage means we have multiple cards with balances (thus I get a ding on EQ) and fairly high total balance reporting (thus I get a ding on TU).  My EX was always my highest FICO score as a result, and therefore while I cannot get EX anymore I figure whichever of the other two is probably my middle score.  Of course these balances don't really mean anything because they'll soon get paid in full, I think it's idiotic that credit card companies report the balance as of billing date instead of reporting the balance as of the due date.

However, since I know these details before my next application for credit I can easily goose my scores a few points by prepaying on my credit cards just before bill date to manipulate the balances.  I'll arrange it so one card shows a small balance and the others show zero balances, making TU happy about the small total owed and making EQ happy that only one card reports a balance.  I can't get my EX score anymore but they'll be happy anyway since they care more about percent utilization which rarely hits 10% except just after a major purchase.

[Anonymous]

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So, EQ is the picky one about having more then one card report? Now that I remember, one page 2 of my fico, Transunion never said anything about having two card report. 

Message Edited by Kylan1234 on 01-21-2010 06:15 AM

[Anonymous]

Just remember the TU model used for the FICO report you can obtain from myFICO and transunioncs is TU98. The one used by most credit issuers is TU04. Take the advice proffered on the TU FICO report with a grain on salt.

[Anonymous]

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@Anonymous wrote:
Just remember the TU model used for the FICO report you can obtain from myFICO and transunioncs is TU98. The one used by most credit issuers is TU04. Take the advice proffered on the TU FICO report with a grain on salt.

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Why does MyFico not switch to TU04 since no one even pulls TU98 anymore? The only Fico left we can pull that would be the same as what a lender will pull is EQ, unless a lender still uses TU98, correct?

[Jazzzy]

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@Anonymous wrote:

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@Anonymous wrote:
Just remember the TU model used for the FICO report you can obtain from myFICO and transunioncs is TU98. The one used by most credit issuers is TU04. Take the advice proffered on the TU FICO report with a grain on salt.

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Why does MyFico not switch to TU04 since no one even pulls TU98 anymore? The only Fico left we can pull that would be the same as what a lender will pull is EQ, unless a lender still uses TU98, correct?

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Correct...and very frustrating. I do not understand why the credit reporting agencies do not want to make the dollars consumers like us would be willing to pay to be able to accurately monitor our scores. They must make more money keeping those numbers from consumers and just selling them to creditors. Who knows?

[Anonymous]

I don't want to start a new thread and part of wanted to know was answered here already, thanks. So, I'll ask here about util.

Say I had 10 cards. 4 with 0 balance and 6 with very high balances. Would I do better to just concentrate on lowering one card at a time? Lower them all equally? Transfer balances to the cards with no balances to spread the damage?

I'm asking in relation to fico scoring only. Not what is smart concerning highest interest rates or any of that. Please tell me what is best for the fico if you couldn't pay them all off at once. 90% on 6. 0% on 4. Equal limits.

[haulingthescoreup]

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LynetteM wrote:

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@Anonymous wrote:

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@Anonymous wrote:

Just remember the TU model used for the FICO report you can obtain from myFICO and transunioncs is TU98. The one used by most credit issuers is TU04. Take the advice proffered on the TU FICO report with a grain on salt.

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Why does MyFico not switch to TU04 since no one even pulls TU98 anymore? The only Fico left we can pull that would be the same as what a lender will pull is EQ, unless a lender still uses TU98, correct?

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Correct...and very frustrating. I do not understand why the credit reporting agencies do not want to make the dollars consumers like us would be willing to pay to be able to accurately monitor our scores. They must make more money keeping those numbers from consumers and just selling them to creditors. Who knows?

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I seem to be typing "it takes two to tango" an awful lot these days, but that's generally the issue.

Since TU gets a big chunk of the money when we pull our TU FICO, maybe they'll start to notice that they're not selling as many scores to consumers any more and decide to offer the better product.

Where I live (the Southeast), TU is rarely pulled, but it is still a frustrating issue.

[haulingthescoreup]

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FinickyFico wrote:
I don't want to start a new thread and part of wanted to know was answered here already, thanks. So, I'll ask here about util.

Say I had 10 cards. 4 with 0 balance and 6 with very high balances. Would I do better to just concentrate on lowering one card at a time? Lower them all equally? Transfer balances to the cards with no balances to spread the damage?

I'm asking in relation to fico scoring only. Not what is smart concerning highest interest rates or any of that. Please tell me what is best for the fico if you couldn't pay them all off at once. 90% on 6. 0% on 4. Equal limits.

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Hmm. OK, first of all, you will generally do better to have fewer than half of all your revolving accounts, aka credit cards, reporting a balance. You will also generally do better to have half or fewer of all accounts (installment, revolving, anything else) reporting balances. (It appears that this varies according to your score bucket; thus the "generally.")

So if all you have are CC's, you'll do better to have 4 of 10 with balances (= fewer than half.) If you have some installment accounts as well, say a mortgage and car loan, that means 12 accounts total. Since open installment accounts by definition have balances, that means that once again, you'll want a maximum of 4 CC's with balances (4 + 2 = half or fewer.)

And another big point, if you actually had 90% util on 6 cards, you would be getting hit hard for that. 6 maxed-out accounts will definitely bite you on the rear, because it's not just total util, but also individual util.

So in that situation, I would keep the 4 cards at $0 and go after the others. I would pay off 2 of the cards with balances, probably one at a time although I don't know if it matters, and then start lowering the balances on the remaining cards, getting each to 49% or lower. Then I'd finish by killing them off, one at a time.

[Anonymous]

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@haulingthescoreup wrote:

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@Anonymous wrote:
I don't want to start a new thread and part of wanted to know was answered here already, thanks. So, I'll ask here about util.

Say I had 10 cards. 4 with 0 balance and 6 with very high balances. Would I do better to just concentrate on lowering one card at a time? Lower them all equally? Transfer balances to the cards with no balances to spread the damage?

I'm asking in relation to fico scoring only. Not what is smart concerning highest interest rates or any of that. Please tell me what is best for the fico if you couldn't pay them all off at once. 90% on 6. 0% on 4. Equal limits.

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Hmm. OK, first of all, you will generally do better to have fewer than half of all your revolving accounts, aka credit cards, reporting a balance. You will also generally do better to have half or fewer of all accounts (installment, revolving, anything else) reporting balances. (It appears that this varies according to your score bucket; thus the "generally.")

So if all you have are CC's, you'll do better to have 4 of 10 with balances (= fewer than half.) If you have some installment accounts as well, say a mortgage and car loan, that means 12 accounts total. Since open installment accounts by definition have balances, that means that once again, you'll want a maximum of 4 CC's with balances (4 + 2 = half or fewer.)

And another big point, if you actually had 90% util on 6 cards, you would be getting hit hard for that. 6 maxed-out accounts will definitely bite you on the rear, because it's not just total util, but also individual util.

So in that situation, I would keep the 4 cards at $0 and go after the others. I would pay off 2 of the cards with balances, probably one at a time although I don't know if it matters, and then start lowering the balances on the remaining cards, getting each to 49% or lower. Then I'd finish by killing them off, one at a time.

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Very good understandable answer. Would you agree with my approach before I barage you with my next question?

I have decided to take this strategy. I owe about $33000 in revolving. I do have 4 paid off. I'm going to leave them alone. I'm going to pay $3k per month over the next year or so until they are gone. I'm going to pay the smallest cards first. Make it nice and neat. Simple and clean. It might cost me a few $ in interest but it will make me feel good watching thoes accounts drop to 0. Then the biggest account will die in the last 3 months. That is the plan I'm going with.

My question is, I don't have a mortgage and never will. Feed back says it hurts my score. Should I take out an equity loan?

Message Edited by FinickyFico on 01-21-2010 08:30 PM

[Anonymous]

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@Anonymous wrote:
My question is, I don't have a mortgage and never will. Feed back says it hurts my score. Should I take out an equity loan

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Yes -- if the proceeds go to pay down the revolving debt and nowhere else. This would help your credit picture emmensely.

As for what HTSU said I pretty much agree, except I view the magic UTIL line as being 35%. I would want to see every revolving account at < 35% UTIL ASAP and then killed off.