Effects of PIF

[Stryder]

Obviously I am new here and am still trying to learn the black art of scores. My biggest revelation was the credit utilization thing. I am recovering from all my credit cards crashing in 2009. I only have one baddie left and it goes away in Nov16. I had only one card in 2015, a BoA rewards with a $500 limit, they increased it to 1k mid 2015. In Nov 2015, we bought a TV and I got a SYNC card with a 3300 cl and the TV was 3250. I thought I had done a great thing for my credit which was 680 at the time…. My score went to 630 overnight. (another poster said 36 month free interest is the devil...couldn't agree more)

This was when I started reading and learning how credit works and what the UTIL is about. By this time, I had gotten my util down to 49% and I found the chart with the BL% brackets. I have dropped it to down to 16% now and have my TCL up to 16k which will drop me down to 8%. I am looking to get a mortgage in 2017 and a forum member recommended I keep it around 11%? I have been flexing my cards and PIF all but the SYNC card which is down to $1100. My scores are TU8-668 EX690 EQ697 ..TU FICO4 mortgage is 710

My question is, I ran the myFico simulator and keeping paying everything off and saw zero increase?? I accidently ran it with $54 and paying the BL for 24 months and the simulator jumped to 808????? I ran it every way I could in paying it off and the only increase came from taking a year or more to pay off with steady payments. So is the trick of leaving something due on each card, and that it is now a loan that I am making regular, on time payments what they want? Like PIF every time leaving nothing due doesn’t mean anything to them? …I guess it looks like a closed loan or nothing is due, so no credit for on-time payments?

[Anonymous]

For maximum FICO score gains, you want to have one account with utilization from 1%-9% and also overall utilization from 1%-9%.  You only have a few cards, so allowing 1 to report a small balance is the way to go.  For people with a good amount of cards to a lot of cards this number can increase, but for your situation keep one with a balance reported and that balance at under 10%. 

There are a lot of threads out there that cover this topic and by searching them out you'll get a ton of additional information, but for now this is really all you need to know.  Allowing all of your accounts to report nothing will hurt your scores as you aren't using your credit in the eyes of FICO.  I did this just last week and all of my scores dropped 14-20 points.  Allowing one account to report a small balance eliminates this.

Also, don't look at simulators.  All they serve to do is exactly what you posted above... confuse you and leave you with more questions that you started with.  Simulators try to predict a score using maybe 10 pieces of scoring criteria from a profile where there are an infinite amount of data pieces with respect to one another.  If a simulator gets a score right or close, it's a coincidence, nothing more.  You'd be better served giving everyone on here as much info as you can on your profile and ask them what they think woudl happen to your score if you did something.  Chances are the experienced forum members on here would be able to give you a prediction far more accurate than some simulator.

[driftless]

Hi Terry,

There is another current thread on util.  In that thread this thread was referenced, particularly Thomas_Thumb's post.  It is worth a read.  FWIW - a lot of us on this board do not think that the myFICO simulator is close to being accurate.  I PIF on the due date and often small amounts report that post between the due date and the statement cutting, but I am not trying to maximize for a mortgage.

  http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Reducing-utilization-and-scoring-impact/t...

[Stryder]

Great thread! It should be required reading for anyone that gets a credit card!

I have never had any luck with the simulator, I was just killing time on my phone when I ran accross  the 140pt jump for paying off my UTIL in 24 mo payments...just making sure I wasnt missing or misunderstanding anything.. lol

Thanks for the link and the help guys.

[SouthJamaica]

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@terryj wrote:

Obviously I am new here and am still trying to learn the black art of scores. My biggest revelation was the credit utilization thing. I am recovering from all my credit cards crashing in 2009. I only have one baddie left and it goes away in Nov16. I had only one card in 2015, a BoA rewards with a $500 limit, they increased it to 1k mid 2015. In Nov 2015, we bought a TV and I got a SYNC card with a 3300 cl and the TV was 3250. I thought I had done a great thing for my credit which was 680 at the time…. My score went to 630 overnight. (another poster said 36 month free interest is the devil...couldn't agree more)

This was when I started reading and learning how credit works and what the UTIL is about. By this time, I had gotten my util down to 49% and I found the chart with the BL% brackets. I have dropped it to down to 16% now and have my TCL up to 16k which will drop me down to 8%. I am looking to get a mortgage in 2017 and a forum member recommended I keep it around 11%? I have been flexing my cards and PIF all but the SYNC card which is down to $1100. My scores are TU8-668 EX690 EQ697 ..TU FICO4 mortgage is 710

My question is, I ran the myFico simulator and keeping paying everything off and saw zero increase?? I accidently ran it with $54 and paying the BL for 24 months and the simulator jumped to 808????? I ran it every way I could in paying it off and the only increase came from taking a year or more to pay off with steady payments. So is the trick of leaving something due on each card, and that it is now a loan that I am making regular, on time payments what they want? Like PIF every time leaving nothing due doesn’t mean anything to them? …I guess it looks like a closed loan or nothing is due, so no credit for on-time payments?

---

To optimize your scores going into the mortgage application:

1. no applications or other hard pulls

2. let all cards but one report at zero balance

3. let the other card report at 9% or less

Forget the simulator

(Assuming you have no installment loans outstanding there is one additional game you can play if you want to pick up some points: go to Alliant Credit Union, open $500 or more savings account, then take out $500 share secured loan against the savings account with 48 or 60 month duration & no autopay (no hard pull, negligible interest), then pay that loan down to 9%, or $45. Once the $45 balance reports you'll pick up some points. If on the other hand you do have an outstanding installment loan try to pay it down to 9%.. but not to zero.)

[Anonymous]

Good advice going on in here for sure.

[Thomas_Thumb]

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@SouthJamaica wrote:

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To optimize your scores going into the mortgage application:

1. no applications or other hard pulls

2. let all cards but one report at zero balance

3. let the other card report at 9% or less

Forget the simulator

(Assuming you have no installment loans outstanding there is one additional game you can play if you want to pick up some points: go to Alliant Credit Union, open $500 or more savings account, then take out $500 share secured loan against the savings account with 48 or 60 month duration & no autopay (no hard pull, negligible interest), then pay that loan down to 9%, or $45. Once the $45 balance reports you'll pick up some points. If on the other hand you do have an outstanding installment loan try to pay it down to 9%.. but not to zero.)

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My understanding is the Fico 04 mortgage scores (EQ score 5 and TU score 4) do not look at open mortgage B/L as a scoring factor. So a share secured loan won't help with those mortgage scores. However, it may be of some benefit to EX score 2 (which is a Fico 98 score).

[SouthJamaica]

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@Thomas_Thumb wrote:

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@SouthJamaica wrote:

---

---

To optimize your scores going into the mortgage application:

1. no applications or other hard pulls

2. let all cards but one report at zero balance

3. let the other card report at 9% or less

Forget the simulator

(Assuming you have no installment loans outstanding there is one additional game you can play if you want to pick up some points: go to Alliant Credit Union, open $500 or more savings account, then take out $500 share secured loan against the savings account with 48 or 60 month duration & no autopay (no hard pull, negligible interest), then pay that loan down to 9%, or $45. Once the $45 balance reports you'll pick up some points. If on the other hand you do have an outstanding installment loan try to pay it down to 9%.. but not to zero.)

---

My understanding is the Fico 04 mortgage scores (EQ score 5 and TU score 4) do not look at open mortgage B/L as a scoring factor. So a share secured loan won't help with those mortgage scores. However, it may be of some benefit to EX score 2 (which is a Fico 98 score).

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Since we have no effective way of closely monitoring any scores other than FICO 8, I've decided to concentrate on FICO 8 rather than engage in guesswork as to the other models.

[sarge12]

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@Anonymous wrote:

For maximum FICO score gains, you want to have one account with utilization from 1%-9% and also overall utilization from 1%-9%.  You only have a few cards, so allowing 1 to report a small balance is the way to go.  For people with a good amount of cards to a lot of cards this number can increase, but for your situation keep one with a balance reported and that balance at under 10%. 

There are a lot of threads out there that cover this topic and by searching them out you'll get a ton of additional information, but for now this is really all you need to know.  Allowing all of your accounts to report nothing will hurt your scores as you aren't using your credit in the eyes of FICO.  I did this just last week and all of my scores dropped 14-20 points.  Allowing one account to report a small balance eliminates this.

Also, don't look at simulators.  All they serve to do is exactly what you posted above... confuse you and leave you with more questions that you started with.  Simulators try to predict a score using maybe 10 pieces of scoring criteria from a profile where there are an infinite amount of data pieces with respect to one another.  If a simulator gets a score right or close, it's a coincidence, nothing more.  You'd be better served giving everyone on here as much info as you can on your profile and ask them what they think woudl happen to your score if you did something.  Chances are the experienced forum members on here would be able to give you a prediction far more accurate than some simulator.

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Credit score simulators are probably the greatest waste of computor code that has ever been written.

[Thomas_Thumb]

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@SouthJamaica wrote:

---

@Thomas_Thumb wrote:

---

@SouthJamaica wrote:

---

---

To optimize your scores going into the mortgage application:

1. no applications or other hard pulls

2. let all cards but one report at zero balance

3. let the other card report at 9% or less

Forget the simulator

(Assuming you have no installment loans outstanding there is one additional game you can play if you want to pick up some points: go to Alliant Credit Union, open $500 or more savings account, then take out $500 share secured loan against the savings account with 48 or 60 month duration & no autopay (no hard pull, negligible interest), then pay that loan down to 9%, or $45. Once the $45 balance reports you'll pick up some points. If on the other hand you do have an outstanding installment loan try to pay it down to 9%.. but not to zero.)

---

My understanding is the Fico 04 mortgage scores (EQ score 5 and TU score 4) do not look at open mortgage B/L as a scoring factor. So a share secured loan won't help with those mortgage scores. However, it may be of some benefit to EX score 2 (which is a Fico 98 score).

---

Since we have no effective way of closely monitoring any scores other than FICO 8, I've decided to concentrate on FICO 8 rather than engage in guesswork as to the other models.

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I understand, you have a lot of accounts and frequeny updates. That makes it difficult to isolate factors for a robust analysis.

Fortunately there was a lot of work done on the mortgage scores before Fico 08 came along and some profiles are quite stable which allows for good isolation and avoids the need for guesswork.