Frustrating score changes

[FICOdawg]

So what's the ideal number?   I have 3 cards.   How many can report a balance and not result in FICO hit?

[JoeRockhead]

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@FICOdawg wrote:

So what's the ideal number?   I have 3 cards.   How many can report a balance and not result in FICO hit?

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If they're all revolvers, your ideal number is 1 reporting a balance.  Anything more than 50% of revolving accounts reporting balances gets a slight score penalty for "too many accounts with balances". 

[Zoostation1]

@JoeRockheadCrossing 50% appears to have cost me 3pts on EQ8.   I've temporarily gone from 3/7 to 4/7 reporting with 7.4% utilization (not high enough to trigger any known threshold afaik) and dropped from 700 to 697.  EX8 has not changed (I know Experian will refresh daily for FICO 8 so I wonder if EX is less sensitive to this).  TU8 I haven't seen a decrease yet, but  I can't rule it out yet as I don't know if the change in reporting triggered a myFICO scoring update and my last DiscoverTU8  update is from the same day the 4th account reported so it's still showing 3/7 reporting.

[Thomas_Thumb]

As a general rule Experian is less sensitive to multiple cards reporting balances that EQ or TU. This is most apparent with the older mortgage Ficos.

[FICOdawg]

I have free Experian.     I get major points for aggregate utilisation reduction.

i did debt snowball from smallest to biggest CC.      Paid off 2 of them.    Remaining card has 81% utilisation.     I'm at a 752 now, bottomed out in December at 695 when I  started the payoff journey.

At least from what I've seen the total utilisation is a major factor.     As I pay off the final card over the next 6-7 months the aggregate and individual utilisation drop, hard to tease out what counts more but in my case the total credit used is a big knob.     This makes more sense then to have one card control the entire narrative.

[Thomas_Thumb]

Yes, I have found EX is more sensitive to aggregate utilization changes but less sensitive to number of cards reporting balances. I believe EX is also more sensitive to highest individual card utilization than EQ and possibly TU. However, that could be file dependent.

That 81% UT card is definitely hurting regardless of aggregate UT.

[FICOdawg]

My total UT is now 41% which will drop below 39% with next payment so nearly every month I'll be crossing thresholds for aggregate and total.      In my report from EX it only mentions total so it's interesting they don't mention individual.

Keep in mind my two chase cards I've had over 10 years plus for both of them.       

If someone has 30000k total CL but a $500 card with $300 balance on it and other cards zero or small balances there is an inequity if they hammmer you in that way.   If it's not weighted it's an error in the model.

[Thomas_Thumb]

Fico has card related scoring metrics for:

1. Aggregate revolving utilization.

2. Highest revolving utilization on any of your individual cards.

3. Number of accounts and % of open cards with balances. This includes charge cards

4. Aggregate credit card balance in $- this includes charge cards

Aggregate utilization is given the most weight but number/% of cards reporting balances can have considerable impact on the older Fico mortgage scores.

Highest utilization on individual cards does not factor in credit limit nor should it. That is handled in metric #1. Individual utilization is given less weight but a single "maxed out" card can have a substantial impact on score.  Some notable thresholds are: 89%, 49% and 29%. My read is that it represents a risk assessment on management of all accounts - not just priority accounts.

Do you think a 30 day late on a $500 CL cards is weighed less than one on a $5000 CL card? It is not

[FICOdawg]

A late is different.       Entire discussion has been related to utilization.

reality is any acct you have needs to have auto pay set-up to prevent so late reporting on a $20 balance.

[Thomas_Thumb]

I'm telling you how it works with individual card utilizations. I agree with it. You don't have to. Regardless, individual card utilization does not get weighed based on the card's CL except for its contribution toward aggregate.

FWIW - There is a newish thread in Smorgasboard where posters discuss changes they would make if they designed a credit scoring model.