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Effects of High Utilization

Thomas_Thumb
Senior Contributor

Re: Effects of High Utilization


@Revelate wrote:

@soysupana wrote:

@degs138 wrote:

I had a lot of bills this tax month and I am going to carry a balance for the first time ever.  It's on a 0% APR card which is the only reason I'm carring a balance.  Keeping the cash I could pay it off in a 3.25% APY account.

 

My utilization was always 4-8% each month.  For this month my statements cut and I had 35% utilization.  The following happened to my scores

 

FICO TU reported by Barclay 696 dropped to a 674

FAKO TU by Credit Karma 684 droped to a 635

 

I'm going to pay all my cards off at the end of this billing cycle except for my 0 APR card.  I will pay that off the following month.  I'll repost my scores as they change.


If you could get the utilization on that card fro 35% to about 29% or less it will make a huge difference on your score.


Hrm not on my file; had one card go from <1% to ~67% and score didn't budge but I don't have a clean file.  Aggregate seems to dominate until you get to the >80% or >90% of individual balances on a card in my personal experience.

 

Something go to test on a stupid SDFCU $250 secured card eventually for me.


My personal experience is that the Fico 8 scoring model is primarily concerned with aggregate utilization % - not sure that it factors in individual credit card utilization. I had one CC report 80.1% utilization (aggregate utilization maintained under 4%). There was no change in my Fico 8 score.

 

The key factor for Fico 8 is aggregate utilization. There are multiple thresholds for aggregate utilization % and impact on credit score. One well known aggregate threshold is under 10%. Other thresholds I have seen published include: 20% and 35%.

 

Note: my EQ Fico 4 score did drop so the Fico 4 model appears to factor in "max out" on individual cards - not sure if Fico 4 has multiple utilization thresholds on an individual card basis or just a "max out".

Fico 9: .......EQ 850 TU 850 EX 850
Fico 8: .......EQ 850 TU 850 EX 850
Fico 4 .....:. EQ 809 TU 823 EX 830 EX Fico 98: 842
Fico 8 BC:. EQ 892 TU 900 EX 900
Fico 8 AU:. EQ 887 TU 897 EX 899
Fico 4 BC:. EQ 826 TU 858, EX Fico 98 BC: 870
Fico 4 AU:. EQ 831 TU 872, EX Fico 98 AU: 861
VS 3.0:...... EQ 835 TU 835 EX 835
CBIS: ........EQ LN Auto 940 EQ LN Home 870 TU Auto 902 TU Home 950
Message 21 of 22
Revelate
Moderator Emeritus

Re: Effects of High Utilization


@Thomas_Thumb wrote:

@Revelate wrote:

@soysupana wrote:

@degs138 wrote:

I had a lot of bills this tax month and I am going to carry a balance for the first time ever.  It's on a 0% APR card which is the only reason I'm carring a balance.  Keeping the cash I could pay it off in a 3.25% APY account.

 

My utilization was always 4-8% each month.  For this month my statements cut and I had 35% utilization.  The following happened to my scores

 

FICO TU reported by Barclay 696 dropped to a 674

FAKO TU by Credit Karma 684 droped to a 635

 

I'm going to pay all my cards off at the end of this billing cycle except for my 0 APR card.  I will pay that off the following month.  I'll repost my scores as they change.


If you could get the utilization on that card fro 35% to about 29% or less it will make a huge difference on your score.


Hrm not on my file; had one card go from <1% to ~67% and score didn't budge but I don't have a clean file.  Aggregate seems to dominate until you get to the >80% or >90% of individual balances on a card in my personal experience.

 

Something go to test on a stupid SDFCU $250 secured card eventually for me.


My personal experience is that the Fico 8 scoring model is primarily concerned with aggregate utilization % - not sure that it factors in individual credit card utilization. I had one CC report 80.1% utilization (aggregate utilization maintained under 4%). There was no change in my Fico 8 score.

 

The key factor for Fico 8 is aggregate utilization. There are multiple thresholds for aggregate utilization % and impact on credit score. One well known aggregate threshold is under 10%. Other thresholds I have seen published include: 20% and 35%.

 

Note: my EQ Fico 4 score did drop so the Fico 4 model appears to factor in "max out" on individual cards - not sure if Fico 4 has multiple utilization thresholds on an individual card basis or just a "max out".


Maxxed tradeline penalty could be at 85 or 90%, though I greatly appreciate the datapoint it doesn't conclusively mean that individual tradelines aren't factored.  Smiley Happy

 

I do know that EQ Beacon 5.0 as you state does have it from my own direct testing (97 and 99%, identical drops and restoration over 4 months), but there isn't enough data on FICO 8 from anyone trying this... other than someone getting a silly small limit card, which incidently most people give up by the time they get interested enough to test it rigorously, it's hard for many people to test it in the course of their normal transactions as increasing limits is one of the primary goals of many people on this and similar sites.

 

I hadn't thought of it like you suggest, but yeah,  I only got hit for 14 points for single tradeline (with some possibly lost going above 10% aggregate at the time, but well lower than other theorized breakpoints) whereas maxxed on aggregate is a much larger penalty... or maybe there's some factor of N x maxxed tradelines too which corresponds to multiple accounts being near max which would equate to high aggregate too.

 

Hard to say without more details, would've been interesting if I could've maxxed two tradelines at that time and see what it did, may have that opportunity with my Freedom and silly small secured card test at the end of the year with the Freedom's having Amazon on the calendar which is easy to spend 1K in a month of things I actually plan on purchasing anyway.  Good idea though, thanks!

 




        
Message 22 of 22
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