Is there a MINIMUM overall percentage required for AZEO????

[355F1]

I am preparing to buy my first home next March and am versed in AZEO but have a question.

My issue is that I have $237,000 in (Personal) Credit Limits. 

Is there a MINIMUM percentage of overall credit limits that I need to have reported? Like over 1%?

I have a 0% BT balance of about $1,800 (CL of $24,000 so under 8.9% individual utilization) on a card that is good until July 2019, but even so, it's less than 1% of my overall CL. I have the cash to pay this off but I am keeping this balance for the AZEO method.

I haven't played with my FICO scores yet trying to figure out if it dings me so I figured I'd ask here.

All of my FICO 8s are over 800; have not checked my mortgage scores just yet but they should be over 760.

[Anonymous]

All FICO models round percentages up.  Thus, for example, 9.001% is rounded up to 10%, which is why you will see the recommendation to keep your utilization at less than 8.99%.  If you went just a tiny bit over 8.99% you'd end up with a utilization of 10%.

Similarly, 0.002% is rounded by FICO up to 1%.

1% gives you no edge whatsoever compared with (say) 3%.  Therefore the AZEO approach typically involves exactly one card reporting a small positive balance, e.g. $20 say.

What is important is to make sure that the one card that reports a positive balance is....

(a)  A card in your name (not an AU card)

(b)  A true credit card (not a charge card, like the Amex Platinum)

(c)  A card with a credit limit of < 34.9k

(d)  A card with a balance of at least $5.

Criterion (a) may not be essential for the mortgage scores.  But since you surely have a card that meets all four criteria, just go with it.

[Anonymous]

PS.  Since you have a 0% card, I'd not lose the financial advantage of the 0% by paying its $1800 balance to some very small number, like $20.

I would, however, adopt the policy of always making at least $2 more than the minimum payment on any card you have, even if it has a cool 0% promotion going.  Making only the MP is a flag for risk.  Fannie Mae added an algorithm to its Desktop Underwriter algorithm a year ago or more that detects that kind of thing.  Probably would make no difference, but might as well cover all your bases.

Implement AZEO, make sure all the cards are reporting with the balances you want, and then pull your mortgage scores.  Should be easy.

[SouthJamaica]

---

@355F1 wrote:

I am preparing to buy my first home next March and am versed in AZEO but have a question.

My issue is that I have $237,000 in (Personal) Credit Limits. 

Is there a MINIMUM percentage of overall credit limits that I need to have reported? Like over 1%?

I have a 0% BT balance of about $1,800 (CL of $24,000 so under 8.9% individual utilization) on a card that is good until July 2019, but even so, it's less than 1% of my overall CL. I have the cash to pay this off but I am keeping this balance for the AZEO method.

I haven't played with my FICO scores yet trying to figure out if it dings me so I figured I'd ask here.

All of my FICO 8s are over 800; have not checked my mortgage scores just yet but they should be over 760.

---

No there's no minimum amount but you certainly want to keep it at at least $15 or $20 so it doesn't get scored as zero.

[355F1]

Thank you for all your help.

Just pulled my mortgage scores and they are 797, 799, 805.

[HeavenOhio]

The reason for the $5 suggested minimum is that some cards will forgive small balances. That would cause zero to be reported, making your plan backfire.