How many CCs can report small balance without Fico degradation?

[Anonymous]

If you have multiple Chase CCs you can test this out very easily in one month...

1. Leave a small balance on one non-Chase card.
2. Leave small balances also on every other Chase card.
3. Let statements post.  Then wait a few days and PIF one Chase card to $0.  Pull FICO scores.
4. Then slowly repeat step 3 with all the rest of your Chase cards.
5. Once all your Chase cards are $0 you'll have the AZEO FICO score.

Should work well with those who have multiple Chase cards.  I only have one so I can't really do much testing.

Would also work with any other vendors that midcycle update if you PIF -- not sure who else does other than Chase.

[Anonymous]

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@Glen_M wrote:

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I have 3/3 revolvers reporting small % balances and two FICO8 scores have continued to go up each month (EQ saw a small ding when the third posted, but at 2 saw a larger increase).  Perhaps I'd see a bigger increase with AZEO, but it doesn't appear to be such a severe penalty that it would trump everything else.  I'll find out with the next cycle when I'm back to AZEO.

I just wanted all the accounts to show a little activity.  

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I couple of quick points in response to what you said above.  First, it's important to understand that allowing over 50% of your revolvers to report balances will in no way help your score.  It's only suggested that it may not hurt your score.  If you allowed 3 of 3 of your revolvers to report small balances and you saw 2 scores increase while one decreased, it's important to know that allowing 3 of 3 to report balances didn't help those 2 scores go up.  No doubt they went up from other factors.  Second, using a card during a cycle and allowing it to report a $0 balance still constitutes activity.  I just didn't want you to think that you needed to let a card report a balance in order to show activity on it.

[xenon3030]

Here are some daily EX Fico number changes (the changes are calculated vs day1), all in this month:

• Day 1: Loan1=11%, Loan2=8%, CC1=5$, Reward Card=50$.
• Day 5: Loan1=11%, Loan2=8%, CC1=5$, Reward Card=0$ (payed off) --> Fico8 change=0, Mortgate Fico2=+2, Auto Fico8=0, Auto Fico2=-10, BankCard Fico8=0.
• Day 9: Loan1=0% (payed off), Loan2=8%, CC1=5$, Reward Card=0$ (payed off)  --> Fico8=+19, Mortgate Fico2=+12, Auto Fico8=+21, Auto Fico2=-1, BankCard Fico8=+34.

Note sure whether reducing the number of acconts reporting a balance from 4 to 2 can have a visible impact on Fico8 but having a single reporting loan of <9% with the best configuaration of AZEO helped me to increase my Fico8 of +19, Mortgate Fico2 of +12 and Auto Fico8 of +21.

I am not sure why Auto Fico2 is responding negatively to either paying off one of the loans or reducing the number of reporting accounts with balance. Is it a bug?

[Thomas_Thumb]

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@xenon3030 wrote:

Here are some daily EX Fico number changes (the changes are calculated vs day1), all in this month:

Day 1: Loan1=11%, Loan2=8%, CC1=5$, Reward Card=50$.

Day 5: Loan1=11%, Loan2=8%, CC1=5$, Reward Card=0$ (payed off) --> Fico8 change=0, Mortgate Fico2=+2, Auto Fico8=0, Auto Fico2=-10, BankCard Fico8=0.

Day 9: Loan1=0% (payed off), Loan2=8%, CC1=5$, Reward Card=0$ (payed off)  --> Fico8=+19, Mortgate Fico2=+12, Auto Fico8=+21, Auto Fico2=-1, BankCard Fico8=+34.

Note sure whether reducing the number of acconts reporting a balance from 4 to 2 can have a significant impact on Fico8 but having a single reporting loan of <9% with the best configuaration of AZEO helped me to increase my Fico 8 of +19, Mortgate Fico2 of +12 and Auto Fico8 of +21.

I am not sure why Auto Fico2 is responding negatively to either paying off one of the loans or reducing the number of reporting accounts with balance. Is it a bug?

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xenon -

Fico looks at aggregated balance to loan ratio in scoring. On day 1 what was your aggregated B/L %, (B1 + B2)/(L1 + L2)? Prior testing by others shows a major point gain, typically 20 points, can be realized on Fico 8 when aggregate B/L drops below 9%. This has been tested with SSL and Auto loans.

There is no evidence to suggest going from 2 open loans to 1 open loan would impact score. Your aggregate B/L did go down to 8% and it appears that aggregate B/L was above 9.0% prior to paying off the 11% loan. Thus, you crossed below the 9% threshold and that would be the primary reason for the score boost.

As an illustration, if you paid off the 8% loan so only the 11% reported odds are you would have not seen a score improvement.

Side note: Mortgages with a long payment history appear to be treated differently relative to B/L. Data indicates one or more B/L threshold above 60% for mortgages. There has been no data confirming a major point gain at the 9% B/L level for a mortgage.

Not sure how many cards you have in total and how many are reporting on Day 1. Nonetheless, the reduction in # cards reporting between Day 1 and Day 5 did not benefit your Fico scores. Unfortunately there is nothing to conclude between Day 5 and Day 9 relating to impact of cards reporting. The overriding factor is the change in loans.

Generally the impact associated with # cards reporting small balances is rather small with Fico 8. Therefore testing of this factor requires other variables be held essentially constant to isolate score changes to cards reporting.

[HeavenOhio]

My Equifax score takes a ding whenever I let a second card report a positive balance. That happens currently when I let two of six cards report. And it happened previously when I'd let two of eight cards report. Currently, the difference is 797 with two cards and 802 with one.

For the first time since I've been actively monitoring my scores, my TransUnion score seems to be doing this too. This change is too recent to know for sure, though. I'm currently at 792 with one card reporting. My score recently decreased to 788 when a second card reported, and it bounced back to 792 when I went back to one. A second card will report a balance in a few days. We'll see if my score goes back to 788.

My Experian score seems to go unchanged. I've shifted between 1 of 8, 2 of 8, 3 of 8, 1 of 6, and 2 of 6 without score changes.

I usually allow two cards to report positive balances. Occasionally, it'll be only one. I can usually attribute score changes to the number of cards reporting as other changes have happened independently of that. There may be some added scoring activity this month, though, as I'll have three accounts reaching one year of age.

I have no installment loans, so they're not a factor. Most of the time, the cause of a score change is pretty clear.

[Anonymous]

HO, that's the first time I've heard of someone seeing a scoring penalty from number of cards reporting balances for less than 50% of cards... in your case, 25% or 33%.

[xenon3030]

Here are balance/debt ratios. Cards: 9 CCs and one rewards card without CL (PRG). Note: In day 1, balances were on one CC and one reward card.

Day 1~ 50%

Day 5: ~0.5%

Day 9 ~ 5%

I also have a rental account (payyourrent.com) that it shows up as "other" account type. I don't know why it shows always a balance. I have not included it in the calculations above.

So, to maximize some non-Fico8 score gains while having both CC and loan, is it recommended to keep b/d<9%? Does it work also on Fico9 (have not monitored yet)?

Why does Auto Fico2 respond negatively to the above changes?

Is there any room to improve Fico scores further?

[Thomas_Thumb]

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@HeavenOhio wrote:

My Equifax score takes a ding whenever I let a second card report a positive balance. That happens currently when I let two of six cards report. And it happened previously when I'd let two of eight cards report. Currently, the difference is 797 with two cards and 802 with one.

For the first time since I've been actively monitoring my scores, my TransUnion score seems to be doing this too. This change is too recent to know for sure, though. I'm currently at 792 with one card reporting. My score recently decreased to 788 when a second card reported, and it bounced back to 792 when I went back to one. A second card will report a balance in a few days. We'll see if my score goes back to 788.

My Experian score seems to go unchanged. I've shifted between 1 of 8, 2 of 8, 3 of 8, 1 of 6, and 2 of 6 without score changes.

I usually allow two cards to report positive balances. Occasionally, it'll be only one. I can usually attribute score changes to the number of cards reporting as other changes have happened independently of that. There may be some added scoring activity this month, though, as I'll have three accounts reaching one year of age.

I have no installment loans, so they're not a factor. Most of the time, the cause of a score change is pretty clear.

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@HeavenOhio,

I suspect some of the sensitivity you see in score relative to cards reporting relates to newness of accounts. Your general observation regarding EQ being more responsive than TU which is more responsive than EX is in-line with what I see in how the CRAs tweak the Fico models.

Once your cards are a year old, your pure play CC file is an ideal profile for testing impact of # cards reporting across all three CRAs. As you know, both utilization and # cards reporting balances have only a point in time impact on score - no lingering impact. Any interest in testing 1, 2. 3, 4, 5 and 6 cards reporting small balances to generate some response curves? For this to be a clean test avoiding new accounts and hard inquiries would be critical.

[xenon3030]

In the AZEO method, is there a recommendation to keep a balance on a specific CC? Should it be 1+ year old? Is there a specific connection between the age of this account and Fico scores?

[HeavenOhio]

I'd be happy to test, but there's a likelihood that I'll be opening new accounts and taking hard pulls. I'm interested in obtaining one more card if I can find one I like. And I'm thinking of asking Chase for a CLI if they don't increase me on their own. And sooner than later, I plan on opening a checking account that will be an Equifax hard pull. I've been delaying the pull for checking until I sort out the card situation.

But in case none of this happens, I have four accounts (two closed) that are reaching a year old just about now. And the other new account will become a year old in February or March. Would this test occur after all of my accounts are a year old? Would it take six months to test all of the conditions?