Mortgage Fico Scoring help please

[Thomas_Thumb]

Mortgage Ficos and Fico 08/09 all have a metric relating to # of open accounts with balances. Charge cards having balances reporting are included in this count for all CRAs (EQ, TU and EX)

A NPSL charge card's reported balance (B) to high balance (HB) ratio is only looked at for scoring for the EX score 2 mortgage Fico - which is Fico 98. The other two mortgage Ficos EQ score 5 and TU score 4 are both based on the Fico 04 algorithm. This algorithm does not look at charge card B/HB.

Let's say you have a classic AMEX charge card (green, gold or platinum) and the most you have charged in a given month over the past two years is $1000. Then $1000 would be your high balance. Even if your hidden limit is $35 or $50k - it is the $1000 that is used for B/HB purposes. Now, if you make a purchase on your AMEX for $1000 on your AMEX and allow the $1500 to report on your statement, your B/HB will be 100%. 1500 (B)/1500 (new HB).

I allowed my AMEX B/HB to report 100% in July/August. Impact on EX Fico scores was as follows: before => during => after

1) EX Fico 08 (score 8): 850 => 850 => 850

2) EX Fico 04 (score 3): 830 => 830 => 830

3) EX Fico 98 (score 2): 837 => 815 => 837

As to whether your charge card balance and high balance count toward aggregate revolving account utilization, there are different points of view on the matter. I would advise having a non charge card report some balance to avoid the potential for a score drop associated with no recent use of revolving credit.

[pat0812]

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@Thomas_Thumb wrote:

Mortgage Ficos and Fico 08/09 all have a metric relating to # of open accounts with balances. Charge cards having balances reporting are included in this count for all CRAs (EQ, TU and EX)

A NPSL charge card's reported balance (B) to high balance (HB) ratio is only looked at for scoring for the EX score 2 mortgage Fico - which is Fico 98. The other two mortgage Ficos EQ score 5 and TU score 4 are both based on the Fico 04 algorithm. This algorithm does not look at charge card B/HB.

Let's say you have a classic AMEX charge card (green, gold or platinum) and the most you have charged in a given month over the past two years is $1000. Then $1000 would be your high balance. Even if your hidden limit is $35 or $50k - it is the $1000 that is used for B/HB purposes. Now, if you make a purchase on your AMEX for $1000 on your AMEX and allow the $1500 to report on your statement, your B/HB will be 100%. 1500 (B)/1500 (new HB).

I allowed my AMEX B/HB to report 100% in July/August. Impact on EX Fico scores was as follows: before => during => after

1) EX Fico 08 (score 8): 850 => 850 => 850

2) EX Fico 04 (score 3): 830 => 830 => 830

3) EX Fico 98 (score 2): 837 => 815 => 837

As to whether your charge card balance and high balance count toward aggregate revolving account utilization, there are different points of view on the matter. I would advise having a non charge card report some balance to avoid the potential for a score drop associated with no recent use of revolving credit.

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My high balance is $3400 and my balance in my last statement was $1074

So about 27%

Will that also have a bad effect on EX Fico 98 or the score drop is mainly when the B/HB is at a high % ?

[Thomas_Thumb]

I lost 5 points on EX Fico 98 (score 2) when AMEX B/HB reported 49.3% on a different occassion. Best guess is B/HB under 30% won't cost you points.

[Anonymous]

Hi Thom Thumb.  HIs B/HB is actually 31.6%.  He writes:

My high balance is $3400 and my balance in my last statement was $1074

So about 27%

1074 / 3400 = 31.6%.

I realize you are going by his 27% figure but his arithmetic was off. 

[pat0812]

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@Anonymous wrote:

Hi Thom Thumb.  HIs B/HB is actually 31.6%.  He writes:

My high balance is $3400 and my balance in my last statement was $1074

So about 27%

1074 / 3400 = 31.6%.

I realize you are going by his 27% figure but his arithmetic was off. 

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Sorry my HB is $3,868