FICO scores with 1 vs 2 cards out of 9 with balance

[Revelate]

I got a little sloppy with my balances and accidentally had a second report (while in mortgage process, for shame I know) and decided to spend $41 in the name of "science" since we've been debating this for longer than I've been on the forums at any rate.

5/24: 1/9 cards with balance.  $43/1000 individual balance, $43/34600 aggregate balance (and a Zync in a Pear Tree)

5/29: 2/9 cards with balance.  $43/1000 and $86/8400 individual balances, $129/34600 aggregate balance (same Zync at $0 discounted from limit)

Data speaks for itself, am a little surprised personally by the findings but if we trust the 3B scores as reference, well... I'd seen this played out on FICO 8 with my balance fun over time though not rigorously tracked, but here's two point in time snapshots over the entire suite of scores we have access to on MF.

Disclosure: I have a dirty file still, clean file may not exhibit same behavior on the anecdotal evidence that every little hiccup counts for comparitively more if you're gold-plated.  Also the scores are listed as they are in the MF additional scores interface, if a translation is needed to the bureau name for it, that can be provided.

Score	24-May	29-May
EQ 8	690	690
EQ 5	700	700
EQ Auto 8	701	701
EQ Auto 5	697	697
EQ Bank 8	705	705
EQ Bank 5	721	721
TU 8	706	706
TU 4	731	731
TU Auto 8	728	728
TU Auto 4	746	746
TU Bank 8	723	723
TU Bank 4	745	740
EX 8	712	712
EX 2	725	725
EX Auto 8	717	717
EX Auto 2	741	741
EX Bank 8	726	726
EX Bank 3	697	697
EX Bank 2	739	739

[JagerBombs89]

This was my experience via Equifax's Scorewatch (EQ04) with a clean file:

Throughout the month of December:

1 Balance reporting: 783 FICO Score

2 Balances reporting: 778 FICO Score

3 Balances reporting: 773 FICO Score

4 Balances reporting: 768 FICO Score

End of Decemeber:

1 Balance reporting: 783 FICO (back to normal)

0 Balances reporting: 774 FICO

January:

1 Balance reporting: 786!

[Anonymous]

Fascinating results.  Thanks, Revelate!

In case not every reader is familiar with the context, the issue has to do with how one adjusts one's credit cards to squeeze out every maximum point available from the "Amounts Owed" category.  The traditional wisdom is that, in addition to keeping your utilization down, you need to have exactly one CC with a positive balance and all the others 0.  If you were to have two positives (as Revelate does on the 29th) it should in theory put you at risk of losing 1 or more points.  BUT... he shows that for almost all the scoring models  and CRAs, he scored identically on the two days.

Two possible explanations occur to me -- and they may well work in tandem with each other. 

The first is exactly what Revelate said.  He belongs to a scorecard for people with derogatories.  (There may be several such scorecards.)  Thus, scored against people who have major "derog" dings to their credit, FICO may soften or eliminate this issue (exactly how many positives do you show, given that you are at under 9% for every card and under 2% overall?).  Basically, FICO decides that this population of people has other things to worry about! 

The second is more subtle.  I wonder whether FICO looks partly at the percentage of open revolving accounts that are showing a positive balance.  (This is all speculation on my part.)  If "most" of your CC's are showing a zero (in Revelate's case over 75%), maybe for some scorecards that is enough; maybe FICO makes that equivalent to "all but one."  Thus, if Revelate had only five credit cards, having 2 positives out of 5 might have had an impact; but since he had 9, it didn't.

Again, very interesting stuff.  Many thanks, R.

[Anonymous]

Hi JaggerBombs89.  Great data!

Could you glance at my earlier post, where I speculate on the effect that having a lot of open CC's might have on this issue?

In that context, I am curious how many total open CC's you had during that period.  E.g. when you had 2 positive balances, was that 2 out of a total of 5, say?  Or 2 out of a total of 13?

I am also curious whether any of your tradelines that showed a positive balance were "new" CC's.  (Say, opened less than a year ago.)  I have seen some evidence that FICO views new CC's with a positive balance with greater alarm than old tradelines.

[JagerBombs89]

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@Anonymous wrote:

Hi JaggerBombs89.  Great data!

Could you glance at my earlier post, where I speculate on the effect that having a lot of open CC's might have on this issue?

1) In that context, I am curious how many total open CC's you had during that period.  E.g. when you had 2 positive balances, was that 2 out of a total of 5, say?  Or 2 out of a total of 13?

2) I am also curious whether any of your tradelines that showed a positive balance were "new" CC's.  (Say, opened less than a year ago.)  I have seen some evidence that FICO views new CC's with a positive balance with greater alarm than old tradelines.

---

All data came from my signature link located here -> http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/My-Credit-Journey-snapshot-Road-to-800/m-p/2674891#M76178

1) With that said, I had 5 open credit cards at the time (technically I had a 6 open but one always reported closed every month, yet balance updated every month... so technically technically it was really 5). 

2) At the time, my newest account was only 1 month old.

[Anonymous]

Awesome!  Thanks JB.

Just for clarity, were your "new" accounts used as ones reporting a positive balance?  You had one very new one.  You might have had another than was under a year old.  Did you use only the old accounts for your test cases, or were some of the "positives" from accounts under a year old?

Just curious.  Thanks so much...

[EW800]

Thanks Revelate for starting this thread and others for contributing!   As part of my rebuild, I find this to be a very interesting topic!  

As a point of reference for below, I have a dirty file.  Squeekly clean the last 2-1/2 to 3 years, however ugly prior to that.  

Some of you may have noticed or recall that a few weeks ago I allowed ALL revolving balances to report $0.  I really got whacked by the FICO 8 model through all three CRA's, to the tune of a dozen points or so, on average.  Thankfully, what everyone had said about this area having no memory proved to be true.  I did get every point back - no more, no less (at least on the FICO 8 model anyway).  

Revelate, your findings caught my eye as I am almost certain that I experienced exactly or nearly the same as you did, several months ago.  I accidentally allowed a second card to report a very small balance (out of about 8 revolving accounts), and if I remember correctly, there were no noticeable score changes.  I then allowed a third account to report a small balance, and that is where I got whacked a few points, but I don't think it was nearly as much as when I had all accounts to report $0.  

I may try letting a second balance report once again, now that we have additional scoring models available to us, however I am going to wait a month or so.  I am hoping to watch my scores carefully in June, as I will have a TU inquiry become one year old, and I will have my most recent credit card addition turn one year old on all three reports.  I believe I have read that an account is considered new for two years, however I am curious if maybe there is some scoring benefit to an account with a perfect history having a one year birthday.  If there are any thoughts on this, please feel free to chime in.  

Thanks again for starting this topic!  

[JagerBombs89]

---

@Anonymous wrote:

Awesome!  Thanks JB.

Just for clarity, were your "new" accounts used as ones reporting a positive balance?  You had one very new one.  You might have had another than was under a year old.  Did you use only the old accounts for your test cases, or were some of the "positives" from accounts under a year old?

Just curious.  Thanks so much...

---

This was back in December 2013 and my newest credit card was November 2013.  At the time, 4 out of my 4 cards (1 out of 4 was reporting closed, but was actually open and it had a balance) were reporting a balance since my newest card didn't first report a balance until January 2014.  Near the end of December 2013, all but 1 balance were $0 and my score went back to the original score.  Once the last card reported $0 balance, I had no balances whatsoever and my score dropped 9 points.  Then, my newest card reported its first balance and my score jumped 13 points. 

Before I opened my newest card (at the time) in November 2013, my second newest card was from August 2010.

[Revelate]

---

@Anonymous wrote:

Fascinating results.  Thanks, Revelate!

In case not every reader is familiar with the context, the issue has to do with how one adjusts one's credit cards to squeeze out every maximum point available from the "Amounts Owed" category.  The traditional wisdom is that, in addition to keeping your utilization down, you need to have exactly one CC with a positive balance and all the others 0.  If you were to have two positives (as Revelate does on the 29th) it should in theory put you at risk of losing 1 or more points.  BUT... he shows that for almost all the scoring models  and CRAs, he scored identically on the two days.

Two possible explanations occur to me -- and they may well work in tandem with each other. 

The first is exactly what Revelate said.  He belongs to a scorecard for people with derogatories.  (There may be several such scorecards.)  Thus, scored against people who have major "derog" dings to their credit, FICO may soften or eliminate this issue (exactly how many positives do you show, given that you are at under 9% for every card and under 2% overall?).  Basically, FICO decides that this population of people has other things to worry about! 

The second is more subtle.  I wonder whether FICO looks partly at the percentage of open revolving accounts that are showing a positive balance.  (This is all speculation on my part.)  If "most" of your CC's are showing a zero (in Revelate's case over 75%), maybe for some scorecards that is enough; maybe FICO makes that equivalent to "all but one."  Thus, if Revelate had only five credit cards, having 2 positives out of 5 might have had an impact; but since he had 9, it didn't.

Again, very interesting stuff.  Many thanks, R.

---

You may be on to something there.  I do take a hit with 3 cards reporting a balance out of 9 on apparently both FICO 04 (DCU's Beacon 5.0, 7 points) and FICO 8 from the MF monitoring solution.  

I did have this though from a while back on another thread but I stopped tracking after a bit.  Seeing the zero difference between 3-4 and then a drop on 5 (and apparently no difference between 1-2) could be ratios at >25% and >50% or similar, or could be step function.  It's an interesting thing to test to be sure!  Will add it to my own list for credit funsies as I'm not done adding revolvers over the next two years.

ETA: My score has been pretty flat and EQ's monitoring has been pretty good at reporting balance changes, I should try to go back through my history and see if I can build a more complete profile of data.

Historical	Score	Bal Reported	Total TLs	Agg. Util %	Change
Equifax Beacon 9	693	2	9	0.4
Equifax Beacon 9	690	3	9	1.3	-3
Equifax Beacon 9	690	4	9	1.5	0
Equifax Beacon 9	686	5	9	1.6	-4
Equifax Beacon 9	703	5	9	1.6	N/A	Tax lien came off
Equifax Beacon 9	707	4	9	1.2	4

[jamie123]

I'm reposting some of this here with some additional information. (Sorry Revelate, I don't do spreadsheets at home. I do enough of them at work!)

Some background history:

I have about $35K in CLs on 7 cards.

Oldest card is 3 yrs 1 mo.

Two installment loans, one 2 year from 7/14, one 4 year fron 7/14.

AAoA is 1 yr 10 mo.

Baddies: One unpaid State Tax lien on each report. Either from 2008 or 2010 depending on the lien.

I typically let all my cards report unless I plan on apping for new credit. As I do this, my score changes everytime a new card reports a balance and then my score changes when I start grooming the score and accounts start reporting $0 balances.

I have always lost or gained 3 to 5 points when a card changed from reporting a balance or not reporting a balance.

I actually lost 3 points when I screwed up and forgot about a cellphone app purchase for $3. A second card reported $3 and I lost 3 points.

That's why I ran the following test. I wanted to find out how much I would lose with a second card reporting a rather high balance.

I am switching which card reports a balance so I thought I'd run a test. I have my scores groomed for a mortgage app in the near future so I only have 1 card reporting about 5% of its CL. $460/$10000

My total UTI is about 2%.

Then...

I let my Chase Freedom card report a balance of $1062 and it only has a CL of $1500 so it is reporting a UTI of 71% of CL.

My EQ score at MyFICO dropped 6 points from 705 to 699.

For what it is worth, my CK EQ score dropped 18 points from 772 to 754. (This is why I don't think CK takes into consideration tax liens. This is probably the range where my EQ score would be without the tax liens. I hope!)

I'm not sure everyone knows this but it is one of the great benefits of Chase cards: If you pay your balance down to $0 mid-month, and you don't have any pending transactions, Chase will update the balance with the CRAs to show $0.

Time to pay the Freedom card off and get my points back...