EX FICO 2: High CL revolver apparently excluded from some revolving calculations

[Revelate]

Strange, but EX FICO 2 doesn't appear to be counting my 43,500 CL credit card (Chase) for at least some of the revolving utilization metrics.  No movement in EX FICO 8, but EX FICO 2 apparently doesn't like it but a balance on a 22000 does eliminate this reason code, which suggests there's some line between 22k and 43.5k where a credit card or even generic revolving tradeline may get discounted on this score.  I don't really have a way to test this further, except to say my nearly max 27k HELOC had tons of complaints regarding utilization on this particular score, so the line may higher than that or the standard revolving utilization might include the 43.5K credit card too.

Heads up for anyone seeking a mortgage.

2/10: 776 EX FICO 2

977/43500

844/22000

(Amex Zync $10)

2/11: 766 EX FICO 2 (-11 points)

977/43500

(Amex Zync $10)

New reason code: #3 slot, Not Using Revolving Credit 

Aka - There are no recent balances on your revolving and/or open-ended accounts.

[Anonymous]

Interesting.  It would be cool to know what the breakpoint limit is. 

A best practice then for anyone considering a mortgage app would be for their AZEO card to be a major bank card, a non AU card and have a CL of (say) $20k or less.  I think our typical recommendations on this subject have been for the AZEO card to not have an ultra-high (say) $50k+ limit, but based on your finding here that number definitely needs to be backed down.

[Revelate]

I believe the 50k number which is bandied around came from FICO 8 testing, perhaps EQ FICO 5, but explicitly not EX FICO 2.

Different models may have different exclusion limits, they certainly handle certain account types differently in general.

Ultimately EX FICO 2 matters until the GSE's change their underwriting standards, so yeah, should tighten up the recommendation.

[Anonymous]

The received wisdom as I have understood it was that FICO 98 (aka FICO 2 for EX) has a breakpoint at $34,999.  I have no idea what might be the case for FICO 04.

The testing that was done on that big thread from a couple years ago was (as Revelate points out) all based on FICO 8.  The final conclusion from the testing was that any CL under $50,001 was fine and anything greater than $70,000 was not.  Thus the breakpoint was somewhere between.

[Anonymous]

Agreed that all of that discussion surrounded FICO 8.  The problem, though, is that FICO 8 isn't as "important" in the grand scheme of things when the most important app someone will ever do generally speaking is a mortgage app, where FICO 8 scores aren't used.  I think it's important to make this distinction to anyone that's considering a mortgage app, as they could hurt their FICO 2 score with AZEO on a relatively high limit card when they think they're optimizing things.

[Thomas_Thumb]

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@Anonymous wrote:

The received wisdom as I have understood it was that FICO 98 (aka FICO 2 for EX) has a breakpoint at $34,999.  I have no idea what might be the case for FICO 04.

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^ Correct. There have been discussions in a some threads a few years back  regarding the $35k reporting threshold on Fico 98. I am AU on a card with a $34,900 CL which does factor into Fico 98. I maintain CLs on my credit cards below $35k partly because I wish to have them factored into the older Fico models - my QTY of open accounts is already sparse. 

[Anonymous]

Right now I am AZEO reporting $1107 out of 31k on my BoA Premium Rewards card. My EX FICO2 as reported by CCT dropped 9 points and this reason code has appeared:

"Not Using Revolving Credit

There are no recent balances on your revolving and/or open-ended accounts.

Your credit report shows no recent balances on your revolving and/or open-ended accounts. People with low balances on their revolving and/or open-ended accounts are generally less risky to lenders."

That reason code is new on my FICO2 and is not appearing for FICO8, where my score did not change at all when the AZEO picture first reported (i.e., another card reported zero). My FICO8 held steady at 774 while my FICO2 dropped from 797 to 788.

SO.....

It looks like the breakpoint is less than $31k. 

[Anonymous]

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@Anonymous wrote:

It looks like the breakpoint is less than $31k. 

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Yes it does, so now we're looking for something between $22k and $31k it seems?

[Revelate]

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@Anonymous wrote:

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@Anonymous wrote:

It looks like the breakpoint is less than $31k. 

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Yes it does, so now we're looking for something between $22k and $31k it seems?

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I can now confirm a 25k CL does not produce that reason code, so 25k - 31k is the breakpoint.

What's strange is TT's dataset where 34k AU doesn't produce that... TT was your datapoint on EX or another bureau, but regardless great catch @Anonymous !

[Anonymous]

I wonder if I should call BoA and have them move 2k of limit from my BoA PR card to my BoA TR card (which currently only has 5k limit), leaving me with 29k limit on the PR. 

Not sure I'll get another opportunity to test this, but if I had to bet, >25k and <31k likely means 29,999.