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How to AZEO?

Regular Contributor

How to AZEO?

Friends: I'm planning to implement AZEO (All Zero Except One) on my credit cards. But I've never done this and would appreciate some advice on how to go about it, and how quickly.

 

As I understand it, the idea is to pay down all cards except one to a zero balance before their monthly statement closing (reporting) dates. Can I pay all but one of my cards down to zero at once without a penalty? Or should I do this over time, card-by-card?

 

I've got a lot of Chase cards and I understand Chase reports immediately upon paying them down to a zero balance. Is there any special procedures you would recommend when paying Chase cards to AZEO?

 

Or would you recommend an alternative strategy? Such as paying all my cards down to below 8.9 percent utilization first before going AZEO?

 

Currently, my utilization on most cards is below 30% but some are around 50-60%. Current FICO 8 scores: EQ 704 TU 708 EX 692.

 

I'd appreciate your advice and counsel!

16 REPLIES
Community Leader
Valued Contributor

Re: How to AZEO?

Are you planning an important app? 

Because if you're not, you're wasting your time and money 

 

 

Message 2 of 17
Valued Contributor

Re: How to AZEO?



@Remedios wrote:

Are you planning an important app? 

Because if you're not, you're wasting your time and money 

 

 


Remedios, respectfully, I would not say it is a waste of time and money if you do not have an immediate app, as if that is an absolute blanket thought.  Not saying your thought is incorrect.  But there are many variables that can go into why someone chooses to do this, which I why I think there is no blanket answer on it being a waste.  I certainly see why you would say that, but in my opinion, it doesn't necessarly apply to everyone. 

 

Like myself, I have no apps coming and have made this my way of handling my cards long ago, just because that is what I'd rather do.  It also gives me a goal to shoot for in maintaing my balances and not letting them get out of hand.  The Op may just want to stop paying interest on multiple cards, or may like the score boost (even if minimal).  Some want to get in the habit of doing it so that later on down the road, when an important app is coming, they are already mentally trained to handle the AZEO method.  As I said, I do it, but I do it because I know it keeps my cards/spending in order. 

 

I personally would rather use the AZEO method whether I have anything coming up or not.  I feel like if I don't, I am introducing more of a chance for my balances to get out of control.  But that is what works for me.  To each their own Smiley Very Happy


 

                                            

Total Credit: $218,900Utilization: 1%AAoA: 5yrs, 5mthsInstallments: Car Lease, Marcus LoanBaddies: 0On Chop Block: Nobody NA

             
             
                          DSC-27.1K | NFC-25K | ALI-25k | WAL-10k | BoA-22k | BB-12k | NFL-15k | LOW-35k | AMX-19.3k | CHA-10k | PF-8.8k | C-DC-9.7k
Message 3 of 17
Valued Contributor

Re: How to AZEO?

Op, to answer your question, there is no penalty by using this method and paying down your cards except one to zero. I think there is no need to pay all the cards down to below 9% (the alternative method you suggested) if you are willing and have the means to use the AZEO method in the first place.
                                            

Total Credit: $218,900Utilization: 1%AAoA: 5yrs, 5mthsInstallments: Car Lease, Marcus LoanBaddies: 0On Chop Block: Nobody NA

             
             
                          DSC-27.1K | NFC-25K | ALI-25k | WAL-10k | BoA-22k | BB-12k | NFL-15k | LOW-35k | AMX-19.3k | CHA-10k | PF-8.8k | C-DC-9.7k
Message 4 of 17
Valued Contributor

Re: How to AZEO?


@ridgebackpilot wrote:

Friends: I'm planning to implement AZEO (All Zero Except One) on my credit cards. But I've never done this and would appreciate some advice on how to go about it, and how quickly.

 

As I understand it, the idea is to pay down all cards except one to a zero balance before their monthly statement closing (reporting) dates. Can I pay all but one of my cards down to zero at once without a penalty? Or should I do this over time, card-by-card? 

 

I've got a lot of Chase cards and I understand Chase reports immediately upon paying them down to a zero balance. Is there any special procedures you would recommend when paying Chase cards to AZEO? 

 

Or would you recommend an alternative strategy? Such as paying all my cards down to below 8.9 percent utilization first before going AZEO? 

 

Currently, my utilization on most cards is below 30% but some are around 50-60%. Current FICO 8 scores: EQ 704 TU 708 EX 692.

 

I'd appreciate your advice and counsel!


Once you get those higher util cards down to AZEO you will see a pretty good size bump in your score. Hope this helps. Post was edited due to trying give advise and others had better ways. GL.



My posts are JMHO. I DO NOT claim to be a FICO expert. Just sharing my experiences from rebuild to recovery. It can be done!
Message 5 of 17
Community Leader
Senior Contributor

Re: How to AZEO?

The value in doing AZEO is so the OP knows how to do it when he needs to. He can also compare his AZEO score to more "natural" reporting. He might find he really wants AZEO for the time being, that more natural reporting is fine, or maybe something in between.

 

@ridgebackpilot, you can bring your cards to AZEO as quickly as you want. To implement AZEO:

  • Leave a small balance on one card. That balance should be at least $5 but not much more. The rest of one's cards should report zero.
  • The card with the small balance should be a major revolver rather than a store card, charge card, or line of credit.
  • It's easier to simply let Chase cards report zero vs. attempting to maintain a positive balance at all times.

You can test "alternatives," such as going over 8.9% overall or letting more than one card report report a positive balance. Find out how your scores are affected compared to AZEO. You'll probably see dings, but you may find that those dings are acceptable in exchange for more flexibility.

 

You're definitely going to want to improve on what you have now. Smiley Happy "Responsible" borrowing is defined at 28.9% or below, both overall and on individual cards. And your scores are somewhat less than ideal. Watch your scores rise as you move toward AZEO, then reach AZEO, then decide if you want to do further testing.

Message 6 of 17
Valued Contributor

Re: How to AZEO?

OP, to answer your question, utilization has no memory so it makes no difference if you implement AZEO in one shot or gradually, no one except you would know or care how you come to AZEO and the temporary effects (if any) on scores would be the same. This is why I agree with Remedio that it's a waste of time and money if you have no immediate plans to apply, implementing AZEO the cycle prior to credit applications would suffice, why put on your expensive suit everyday when you work from home?

 

There are costs in maintaining AZEO/micromanaging UTI at all times in time, energy and money, not to mention stress that comes with.  I like to put everything on autopilot, let all charges post to statements and set autopay for full statement balance on due date while my money collects interest in high APY accounts through grace period, no stress no fuss. I can always make a mid-cycle payment after making a LARGE purchase if I wish, or implement AZEO the month before major applications like auto or mortgage if I deem necessary to squeeze the few extra points.

 

Don't work so hard for your credit, put your credit to work for you.

Message 7 of 17
Mega Contributor

Re: How to AZEO?


@HeavenOhio wrote:

The value in doing AZEO is so the OP knows how to do it when he needs to. 

 

 


Or "if he needs to"!

 

I agree somewhat but I think that  Remedios's reply is also useful, because from reading these forums it's easy to get the impression that AZEO is a must if you are going to do things "right".   As people (including me!) have commented, AZEO has an real opportunity cost (month after month you are giving up the float on several cards) and people need to be aware of this vs whatever benefits they may expect.

Message 8 of 17
Community Leader
Valued Contributor

Re: How to AZEO?

OP asked for alternative strategies, also. 

 OP has cards in the 50-60% utilization range. If he drops that below 28.9%, or ideally 8.9%, he'll experience by far more significant scoring gain than from AZEO

 

 

I used to think that AZEO  gain is huge, till I tested it.

 

With aggregate utilization staying under 8.9% and 3 out of 7 cards reporting, I lost whooping 11 points and sky did not fall.  This is on a young file, very sensitive to utilization changes. 

 

In my opinion, AZEO is more of a philosophy versus credit management, however, everybody is different, and should do whatever works for them. 

 

Good luck OP with whichever way you chose to tackle this issue 

 

 

 

 

 

 

Message 9 of 17
Community Leader
Senior Contributor

Re: How to AZEO?


@Remedios wrote:

I used to think that AZEO  gain is huge, till I tested it.


That's why I suggested that the OP test. Smiley Happy I think that many or most will find that they can get close enough to their AZEO scores without doing AZEO. And of that group, many will find that they can comfortably deviate quite a bit from AZEO.

 

Given the OP's current scores, I'd definitely suggest AZEO before applying for a car loan or mortgage. For a credit card application, improving on what he has now without necessarily reaching AZEO would be fine. Overall utilization that's under 28.9% with no card over 28.9% is generally a pretty look. But if that look doesn't produce satisfactory scores, go lower.

 

We didn't ask the OP if he's currently paying interest. If that's the case, he wants to pay off balances ASAP to reduce the amount of future interest. Also, due to trailing interest, it'll probably take a couple of months to reduce the number of cards reporting positive balances.

Message 10 of 17