@EW800 wrote:
Hi All,
I know it is well proven that optimal scoring for most profiles is to show one revolving account with a small balance and all others show $0. When switching from one account to another as far as which account shows a balance, there is likely to be a matter of days where you no accounts reporting a balance or have two accounts showing a balance. I was just wondering if we know which method has the least impact on scoring - zero accounts reporting a balance or two accounts reporting a balance?
Thanks!
Im pretty sure its different for everyone and is dependent on your overall profile and how many open accounts you have. I usually have 2 accounts reporting a balance, I let a 3rd report with a few bucks on it, my Fico 8 did not move at all (18 open showing on CR). We do know all at 0 is a Fico ding and for some it can be significant +20 points. Only way to find out whats best for you is let 2 accounts report and see what happens.
Thanks, Jäger. I suspect you are correct. I am in the midst of a few days where I have no balanced reporting, and my scores have taken a hit of roughly 8 to 14 points. I am thinking it would be less painful to all two accounts to report when I need to switch between reporting cards.
It sure doesn't take much to make the FICO Scoring God's cranky!
It sure doesn't take much to make the FICO Scoring God's cranky!
@EW800 wrote:
Thanks, Jäger. I suspect you are correct. I am in the midst of a few days where I have no balanced reporting, and my scores have taken a hit of roughly 8 to 14 points. I am thinking it would be less painful to all two accounts to report when I need to switch between reporting cards.
It sure doesn't take much to make the FICO Scoring God's cranky!
I think you are talking about two separate classes of credit report file, in each of these three scenarios:
1) No cards reporting any balances is one class, with zero outstanding debt displayed. That will have one impact on the score.
2) The comparison of having one card report, or two cards report at the same time must factor in the overall utilization, across all cards, to be a balanced check in this file status.
There is also the variation of a dormant card coming back to show a balance, coming out of zero, another score change driver.
Any one of the above four situations/occurences needs to allow a couple of months (cycles of that card reporting again) for the scores to stabilize, because getting to each situation is a form of shock to the calculation, that may not be fully recalculated the same day.
I never tested $0 across all my cards, but number of balances starts as a small penalty and then ramps up in my experience.
I'm not entirely certain on my current credit report that I see a difference between 1 and 2 balances (at least on Equifax, my bureau scores under 3B monitoring don't track 1:1 on this metric but it's entirely possible Experian/Transunion don't have the same data resolution as Equifax), but when my report flucturates between 1-3 I usually gain / lose on the order of 3 points. I've never seen any anecdotal report of anyone's $0 across the board be under 10 point swing, so I'd generally tend to state $0's is worse unless something awkward is done balance wise. It is a step function, vis a vis 1, 2-3 same, 4-5 same, and drops when you move to a different range, but it probably depends on total number of revolving tradelines too... I only have 9 personally in my file, YMMV.
Single balance 97%+ utilization from personal experience I know dropped me 14 points (twice, EQ 04, once 11% aggregate, once 27% aggregate) which probably would've been on the order of all $0's, but when we're talking small balances, two tradelines reporting a balance isn't a huge swing in score from my own data at least.
@JagerBombs89 wrote:
@NRB525 wrote:I think you are talking about two separate classes of credit report file, in each of these three scenarios:
1) No cards reporting any balances is one class, with zero outstanding debt displayed. That will have one impact on the score.
2) The comparison of having one card report, or two cards report at the same time must factor in the overall utilization, across all cards, to be a balanced check in this file status.
There is also the variation of a dormant card coming back to show a balance, coming out of zero, another score change driver.
Any one of the above four situations/occurences needs to allow a couple of months (cycles of that card reporting again) for the scores to stabilize, because getting to each situation is a form of shock to the calculation, that may not be fully recalculated the same day.
Wasn't this the title of the thread? 0 cards reporting a balance vs 2 cards reporting a balance and which one has a greater impact? All I was stating was that 2 balances reporting could have a significant impact due to utilization vs having no utilization whatsoever.
Yes, and I'm trying to make the point that No Balances reporting changes the game, thus the bigger likely impact than going from 1 account to 2. Adding a high utilization percentage to one or two cards is another change to the game. Comparisons in FICO need to keep the variables to a minimum.