I could use some help in understanding why FICO and VantageScore are different when it comes to card utilization scoring.
Case in point:
About a month ago, I paid off my Chase Freedom Visa, which was ,on average, $300 per month for the last couple of months. When my card was paid off (and my other 2 cards had no balance at the time), my VantageScores went up into the mid 760 range, while my FICO scores dropped between 10-15 points approx (down from mid-upper 780's). Total CL between all 3 cards is $17600.
Fast forward a month - I recently made a purchase of around $500 on my Chase Visa. FICO scores bounced back, while VantageScore dropped between 20-25 points. FICOs are now between 775 - 790, while VantageScore is now down between 740 - 745.
I need to understand - logically - how one scoring system can increase the score due to utilization, while the other decreases. This makes no sense.
In addition, this is another reason why consumers like myself struggle to know which scoring methodology is valid and can be tracked and reported reliably.
I can't tell you how each individual formula works. But what I will tell you is that they are different because FICO is the score most lender use, and the one you really want to be concerned with.
Other models like Vantage, and so on, come up with their own formulas, so obviously theirs are going to be somewhat different, causing the difference in scoring.
Other models like Vantage, and so on, come up with their own formulas, so obviously theirs are going to be somewhat different, causing the difference in scoring.
@joesbrat67 wrote:I could use some help in understanding why FICO and VantageScore are different when it comes to card utilization scoring.
Case in point:
About a month ago, I paid off my Chase Freedom Visa, which was ,on average, $300 per month for the last couple of months. When my card was paid off (and my other 2 cards had no balance at the time), my VantageScores went up into the mid 760 range, while my FICO scores dropped between 10-15 points approx (down from mid-upper 780's). Total CL between all 3 cards is $17600.
Fast forward a month - I recently made a purchase of around $500 on my Chase Visa. FICO scores bounced back, while VantageScore dropped between 20-25 points. FICOs are now between 775 - 790, while VantageScore is now down between 740 - 745.
I need to understand - logically - how one scoring system can increase the score due to utilization, while the other decreases. This makes no sense.
In addition, this is another reason why consumers like myself struggle to know which scoring methodology is valid and can be tracked and reported reliably.
In your fact pattern I think I can discern one factor: in FICO you are penalized if all your revolving accounts report at zero, whereas you are rewarded if you have one of the cards reporting a small balance. I know this is illogical, but it is what it is.
Vantage probably doesn't play that.
Interesting to see that Vantage doesn't penalize you for all revolvers at $0, but SJ has it right in the FICO case.
Little surprised it was so large a swing on Vantage though, what's the limit on that Chase card if I may ask and your aggregate limits?
Chase is $5500, Cap One is $6500, Citi is $4800.
@Thomas_Thumb wrote:
@joesbrat67 wrote:I could use some help in understanding why FICO and VantageScore are different when it comes to card utilization scoring.
Case in point:
About a month ago, I paid off my Chase Freedom Visa, which was ,on average, $300 per month for the last couple of months. When my card was paid off (and my other 2 cards had no balance at the time), my VantageScores went up into the mid 760 range, while my FICO scores dropped between 10-15 points approx (down from mid-upper 780's). Total CL between all 3 cards is $17600.
Fast forward a month - I recently made a purchase of around $500 on my Chase Visa. FICO scores bounced back, while VantageScore dropped between 20-25 points. FICOs are now between 775 - 790, while VantageScore is now down between 740 - 745.
I need to understand - logically - how one scoring system can increase the score due to utilization, while the other decreases. This makes no sense.
In addition, this is another reason why consumers like myself struggle to know which scoring methodology is valid and can be tracked and reported reliably.
I believe VantageScore 3.0 may not care how many cards you have report a balance. The model focuses on utilization. For me, VantageScore 3.0 provides highest score when aggregate utilization is in the 4% to 5% range. I take a 5 point to 7 point hit when utilization drops to 1%. The scores I receive from Fico models suggest no difference in aggregate utilization impact over the 1% to 5% range.
I have not experienced zero cards reporting a balance but, other posters have mentioned a 15 to 20 point drop (maybe even higher) on Fico score.
If you get a chance would you mind trying it? Also since you track Vantage I'd be curious about the reaction there since some people suggest it's actually a win there. I'm curious with your uberalis score what happens.
After I get done playing with all my cards reporting, I'm going to go down to zero and see what's what for my file too which I've likewise never done. I watch VS too so will see what it does with all cards w/small balances reporting, so far none of it's hiccupped but I haven't crossed 50% yet. I do rather think it's more aggregate utilization oriented rather than anything else.