High utilization individual accounts & FICO 8

[SouthJamaica]

Interesting (to me anyway):

Had

-82% account

-58% account

-38% account

58% account dropped to 10%. I would have anticipated not much change since overall utilization is still up there and since there's an 82% account still in the game.

But what did happen was

-EX FICO 8 +10

-TU FICO 8 +14

[Anonymous]

I'm assuming that aggregate remained about the same?

Are the 3 accounts you listed your highest 3 individual utilization accounts?

If so, did dropping your #2 utilization account to 10% cause another account to slide into the #3 slot (meaning the 38% account moved to #2) and if so, what is the utilization of that account?

What do you theorize the penalty was for that was reduced?  Perhaps number of accounts > 50% (48.9%, whatever) or something else? 

That seems like a hefty penalty for such a thing, but it's not something commonly talked about on the forum, so who knows. 

I'm also assuming that you know for certain that the 80%+ account is indeed being "counted" by the algorithm.

[SouthJamaica]

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@Anonymous wrote:

I'm assuming that aggregate remained about the same?

Are the 3 accounts you listed your highest 3 individual utilization accounts?

If so, did dropping your #2 utilization account to 10% cause another account to slide into the #3 slot (meaning the 38% account moved to #2) and if so, what is the utilization of that account?

What do you theorize the penalty was for that was reduced?  Perhaps number of accounts > 50% (48.9%, whatever) or something else? 

That seems like a hefty penalty for such a thing, but it's not something commonly talked about on the forum, so who knows. 

I'm also assuming that you know for certain that the 80%+ account is indeed being "counted" by the algorithm.

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1. Aggregate decreased by about 2/3 of a percentage point.

2. Yes those 3 accounts were the highest utilization accounts.

3. Nothing else is in the > 30% region.

4. Possibly percent of accounts > 30% but I don't really have a working theory at this point.

5. I know of no reason for the 82% account not to be counted, and when it showed up I definitely was dinged for it.

[Anonymous]

So definitely something related to number/percentage of accounts greater than a certain threshold... 

Did you notice any shift in your negative reason statements?  I'm curious which one would point to the issue.  I'd assume something to the tune of amounts owed on revolving accounts.

[NRB525]

I have seen similar types of score changes, when high utilization appears or improves, even when that card is not the highest utilization. I do not buy the idea that "only the highest individual card matters for individual utilization". I think that all cards that are high utilization have an effect, and so each card that can be brought down from high utilization should have some improvement on score.

I justify this because FICO is a measure of risk of default. The more cards one has that are getting maxed out ( not just one card maxed out ) should start raising alarms that default risk is increasing. In many areas of FICO we see reduced effect on score as "more of the same" events occur. This is an exception, and for good reason.

[Anonymous]

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@NRB525 wrote:

I do not buy the idea that "only the highest individual card matters for individual utilization".

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I tend to agree, although that thought certainly hasn't been promoted on the forum for the handful of years that I've been a part of it.  With the exception of very few threads, the common argument was always that only highest individual utilization card mattered outside of aggregate utilization. 

This is one of those times though where I feel that if dollars were somehow taken into consideration it would be more meaningful than just percentages.

For example, someone with three $20k limit cards could grab $5k in debt on each, for a total of $15k in debt where someone else with three $500 limit cards could scoop up $450 in debt on each, for a total of $1350 and get smacked from a percentage standpoint.  You can even take aggregate utilization out of the equation here; let's say both of these individuals have $200k+ in overall limits.  From a risk perspective using the above example, I would say the individual that took on $15k in additional revolving debt in most cases would be more of a red flag than the other guy that took on 10x less in revolving debt, but the guy with 10x+ less debt has "more" accounts with high utilization percentages.

Just quirks of the present day system.

[SouthJamaica]

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@Anonymous wrote:

So definitely something related to number/percentage of accounts greater than a certain threshold... 

Did you notice any shift in your negative reason statements?  I'm curious which one would point to the issue.  I'd assume something to the tune of amounts owed on revolving accounts.

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Yes, now that you mention it.

In Experian, "High Credit Usage" dropped out.

[Anonymous]

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@SouthJamaica wrote:

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In Experian, "High Credit Usage" dropped out.

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Interesting.  Clearly that reason statement doesn't just look at aggregate utilization then.  What was that statement replaced with for you?

[SouthJamaica]

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@Anonymous wrote:

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@SouthJamaica wrote:

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In Experian, "High Credit Usage" dropped out.

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Interesting.  Clearly that reason statement doesn't just look at aggregate utilization then.  What was that statement replaced with for you?

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Nothing. It went from 3 negative reason codes to 2.

[Anonymous]

Very interesting.  It would be cool to see some more testing on this.  Was it the 58% account crossing the 48.9% threshold?  Perhaps landing somewhere in the 28.9%-48.9% range would be insightful if that's a possibility at some point.