How to Improve FICO via revolving accounts.....

Anonymous · ‎11-03-2009

I just pulled my FICO and see it is 780. A year ago it was 824. The myFICO report said that my grading under Revolving Accounts was only Good because I have no revolving account activity. Yet it also shows my credit card that is used on a daily/weekly basis and paid in full every month. This card has a very high limit ($40k+) and has been active for 9 years and is actively used.

Can anyone tell me why my FICO reflects no revolving credit and thus is bringing my FICO down? What can I do to get my FICO up to above 800?

MarineVietVet · ‎11-03-2009

@Anonymous wrote:
I just pulled my FICO and see it is 780. A year ago it was 824. The myFICO report said that my grading under Revolving Accounts was only Good because I have no revolving account activity. Yet it also shows my credit card that is used on a daily/weekly basis and paid in full every month. This card has a very high limit ($40k+) and has been active for 9 years and is actively used.

Can anyone tell me why my FICO reflects no revolving credit and thus is bringing my FICO down? What can I do to get my FICO up to above 800?

Welcome to the forums.

It sounds like you may be paying the balance off before the statement posts each month. Is that the case? FICO likes to see small utilization (<9%) but frowns on zero balances.

Optimal credit utilization for FICO scoring purposes seems to be:

Total revolving utilization > 0 and < 9%, the lower the better, and
Reporting a balance on less than half of your revolving TL's, and
Reporting a balance on half or less of all TL's.

(myfico)
7/09 TU-742 EQ- 779
8/09 TU-765 EQ- 783
9/09 EX pulled by lender 802

CC interest free as of 8/09
Time can heal all wounds and a low FICO.
"Hello my name is Sandy and I'm a recovering crediholic".

Anonymous · ‎11-03-2009

I wait until the statement is posted and I pay my cc off in full approx. 2 to 3 days before the actual due date. My usage ranges between 2 - 10% per month and I have used as much as 20% but only once or twice since the limit is so high. So am I correct in understanding that because I pay it off in full I am hurting my FICO score? There is never a month with zero usage. Thus my confusion with why myFICO report would show no Revolving Account activity and lower my rating to Good.

MarineVietVet · ‎11-03-2009

@Anonymous wrote:
I wait until the statement is posted and I pay my cc off in full approx. 2 to 3 days before the actual due date. My usage ranges between 2 - 10% per month and I have used as much as 20% but only once or twice since the limit is so high. So am I correct in understanding that because I pay it off in full I am hurting my FICO score? There is never a month with zero usage. Thus my confusion with why myFICO report would show no Revolving Account activity and lower my rating to Good.

It sounds like you are using your util correctly. I use the same technique. I'm stumped (which occurs quite often). I'll be curious what other opinions you get.

Jazzzy · ‎11-03-2009

The problem may be the high limit on your card. In some cases, HELOCs and credit cards with high balances are not counted as revolving credit.

You are doing OK by not carrying a balance. Carrying a balance will not improve your scores.

You may want to try a couple of months of using a credit card with a lower balance. I believe that will show the use of revolving credit.

MarineVietVet · ‎11-03-2009

@LynetteM wrote:
The problem may be the high limit on your card. In some cases, HELOCs and credit cards with high balances are not counted as revolving credit.

You are doing OK by not carrying a balance. Carrying a balance will not improve your scores.

You may want to try a couple of months of using a credit card with a lower balance. I believe that will show the use of revolving credit.

Good point. I had forgotten about that. CL's above a certain level are sometimes shown as installment loans.

Nice job Lynette!!!

RobertEG · ‎11-03-2009

The comments offered with CRs are quite often ludicrous and contradictory. If your overall revolving % util is under 10%, the % util on each card is under 10%, and less than half of your accounts report zero blance, you are doing everthinig right!

Anonymous · ‎11-06-2009

Since my total % util is typically less than 10% and I only have the one personal cc; there is nothing more I can do to get my FICO higher than the 780? My total avail limit is $48k Should I request it be lowered? I've had this cc for 8 years which means I have strong history. I have had other cards in the past and have never had a late pay on any debt. I've had auto loans that I've paid off all never having a late payment. The only other debt I have is my mortgage which has never had a late pay. My FICO was 824 about two years ago. The only thing I've done since that time is pay off a vehicle loan and cancel some old department store charge cards that I didn't even know were there until I pulled my credit report. Could just cancelling a couple department store charge cards have dropped my FICO 40 points?

llecs · ‎11-07-2009

iamcally wrote:
Since my total % util is typically less than 10% and I only have the one personal cc; there is nothing more I can do to get my FICO higher than the 780? My total avail limit is $48k Should I request it be lowered? I've had this cc for 8 years which means I have strong history. I have had other cards in the past and have never had a late pay on any debt. I've had auto loans that I've paid off all never having a late payment. The only other debt I have is my mortgage which has never had a late pay. My FICO was 824 about two years ago. The only thing I've done since that time is pay off a vehicle loan and cancel some old department store charge cards that I didn't even know were there until I pulled my credit report. Could just cancelling a couple department store charge cards have dropped my FICO 40 points?

Your CL doesn't matter. If you had a $100 or $100,000 CL CC, the result would be the same. It is how you use that CL that determines the impact to your score. So is this your only open CC? If so, I'd suggest the following:

Mix of credit, IMO, is a big part of scoring. Those store cards didn't help your utilization at all, but the mix of credit did. Is there any way to reopen those cards? Better yet, were they yours? If not, don't reopen them.

If you opt not to reopen those cards, then you may benefit in the long-term by opening a new store charge card. If you apply and when it reports, your score will likely drop. But within a year's time, your score will have rebounded and maybe even hit 800.

If this is your only open CC, then you are taking a ding for having 100% of your CCs report a balance if you carry one (even if $1). Unfortunately, you are also taking a ding for carrying $0 on 100% of your CCs, which also results in a ding. Having another CC will help in that one can report $0 and the other report $1 and, believe it or not, will result in a slightly higher score too.

ETA....I personally think that 780 is fantastic. You wouldn't see any added benefit by hitting above 800. Now if it is a sense of accomplishment, well then......

Message Edited by llecs on 11-07-2009 07:06 AM