My FICO 8 is 841 but my FICO 2 is 771 how to improve FICO 2

[scwhite]

Cars paid for, payment history is perfect, not good but perfect. Have Credit utilzation is 2-4% month in and month out, plenty of accounts all perfect. Have mortgage 8 year with about 40% equity and 3 previous perfect mortgages. Plenty of different types of accounts in the mix all perfect. One mortgage loan pull last year but decided against becuase of rates to hold off for a year. 

The FICO 8 registers as near perfect (841) as it should but FICO 2 is 771. This only a couple points into getting very best mortgage terms so anything at all could drop it a point or two and suddenly be in that next level down for some lenders. Since everything is perfect not sure why the 70 point difference but more importantly I can't see any way to raise the score. The only thing I can think of is that I do have about 10k on my student loans. Wasn't sure if they were going to get forgiven so haven't cleared out with the Biden plan. Very low locked in interest of I think 3% so was going to do so after I buy my next house.

If everything is perfect how do you get the FICO 2 score up?

[Junejer]

How many cards have a balance? The so-called mortgage scores are very sensitive to the number of cards with balances.

[SouthJamaica]

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@scwhite wrote:

Cars paid for, payment history is perfect, not good but perfect. Have Credit utilzation is 2-4% month in and month out, plenty of accounts all perfect. Have mortgage 8 year with about 40% equity and 3 previous perfect mortgages. Plenty of different types of accounts in the mix all perfect. One mortgage loan pull last year but decided against becuase of rates to hold off for a year. 

The FICO 8 registers as near perfect (841) as it should but FICO 2 is 771. This only a couple points into getting very best mortgage terms so anything at all could drop it a point or two and suddenly be in that next level down for some lenders. Since everything is perfect not sure why the 70 point difference but more importantly I can't see any way to raise the score. The only thing I can think of is that I do have about 10k on my student loans. Wasn't sure if they were going to get forgiven so haven't cleared out with the Biden plan. Very low locked in interest of I think 3% so was going to do so after I buy my next house.

If everything is perfect how do you get the FICO 2 score up?

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Everything is obviously not perfect.

What @Junejer is getting at is that you might be able to increase your mortgage scores by reducing the percentage of revolving accounts which report a balance. The mortgage scores like to see a lot of zero balances.

[scwhite]

I have 2 credit cards and an AX. One is used for business and usually has a grand or so on it tops and the other is empty. I always leave a little bit becuase I once cleared them completley and my score dropped 10 points even with the business card there is never more than around 3% of credit usage . I use AX for a few thousand monthly expenses that is paid off monthly and we get points and there is the 10k student loan that is paid monthly. The student loan is the only thing I can think of that would have one at near perfect 841 and the other on the low side of very good at 771. 

[scwhite]

There are no revolving accounts and CC are at 3% or less. Do you think I am wrong about the student loan being the culprit?

[SouthJamaica]

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@scwhite wrote:
I have 2 credit cards and an AX. One is used for business and usually has a grand or so on it tops and the other is empty. I always leave a little bit becuase I once cleared them completley and my score dropped 10 points even with the business card there is never more than around 3% of credit usage . I use AX for a few thousand monthly expenses that is paid off monthly and we get points and there is the 1ok student loan that is paid monthly. The student loan is the only thing I can think of that would have one at near perfect 841 and the other on the low side of very good at 771.
[and]

There are no revolving accounts and CC are at 3% or less. Do you think I am wrong about the student loan being the culprit?

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I'm sorry, I couldn't understand your last 2 posts.

1. You say you have 2 credit cards and an AX. What is an AX? An American Express charge card?

2. You say you have "no revolving accounts" but you have 2 credit cards and an AX. It appears that you have 3 revolving accounts.

3. You say one of your cards is "used for business". That doesn't help us, because we need to know which of the 3 cards it is, whether it's a credit card or a charge card, and if it's (a) a personal card (b) a business card that does not report to personal credit, or (c) a business card that does report to personal credit.

4. You say one card "has a grand or so on it". That doesn't help us because we need to know not how much is on it, but how much is the reported balance.

5. I don't know what "I always leave a little bit" means.

6. I don't think the student loans would hurt you in your mortgage scores. If they are paid down to less than 10% of the original amounts, they might be giving you a boost in your FICO 8's that doesn't exist in your mortgage scores. But that wouldn't be anything approaching 70 points.

7. If you are using an American Express charge card which is a personal card, we would need to know your previous "high balance" on it.

So if you can clarify the above, I imagine we can start giving you some ideas on how to improve your mortgage scores.

[Thomas_Thumb]

EX Fico score 2 looks at AMEX charge card balances. EQ Fico score 5 and TU Fico score 4 do not. Utilization on the charge card is based on current balance divided by high balance.

If your AMEX is a charge card with a balance above 50% of HB it will hurting your EX score. If balance is above 80% the card would be classified as maxed out and depress score further.

It also appears you have few true revolving credit cards. If they are low limit cards then the balance on the AMEX may cause an elevated aggregate utilization which could further drive down EX score 2.

Curious, what is your EQ score 5 "mortgage Fico" score? It is the most sensitive to # or % of accounts with balances.

Side note: AMEX charge cards are excluded in revolving account activity for Fico 8 and newer models. So, those cards don't count toward demonstrating recent revolving account activity.

I have an AMEX charge card. My solution to avoiding annoying score drops on EX score 2 was:

* Boost the HB on the card by using it heavily during a target month. Goal for me was to boost HB 4x.

* When the abnormally high current balance reports it will become the new HB for use in future calculations. Sure, score will drop that 1st month because current balance divided by high balance is 100%. However, in future months, B/HB will be low due to the increased HB.

[scwhite]

I am sorry if my post are not clear enough. I have no reson to intentionally mislead on this board about my report as I am here seeing if any of you have any insight that might help me and I do appreciate the help, I really do, but not if it upsets you or my post just don't give you enough to go on. I do understand if you don't have any suggestions that might help me figure this out. I understand basic credit reporting but I am not familiar with FICO 2/FICO 8 differences and my little research so far hasn't helped but I will keep surfing and reading any articles I can find.

The 70 point difference is between the Experian FICO 8 and Experian FICO 2. I only have the Advantage scores from the other 2 and those are 825/823 and I assume are probably more alligned with the FICO 8.

The Experian FICO 8 score is 841 and the Experian FICO 2 score is 771. I do have a perfect credit history dating back to the 80s so the issue is in the mix of accounts. I have 2 active VISA credit cards and an Americian Express card that I have had for probably 20 years, one VISA I use for a small business but it is a personal card. Sometimes the balance is as high as few thousand for a couple of months if I am breaking a business purchase into a couple of payments but it is normally well under a thousand. The 2nd VISA credit card has a few hundred tops whenever it is reported and I just use lightly when cash won't work. The bulk of my monthly expenses (about $3k) I charge on my Americian Express and pay in full each month. My credit usage is never more than  6-7% and almost always less than 3%.

The reason I think student loan is the hit is becuase there is nothing else other than the Americian Express. I do know that Americian Express is not counted against credit usuage if paid in full each month for FICO 8\Advantage but I don't know if FICO 2 uses it. With that added my usage most months pop up to maybe 10% and 15% every so often when I am buying something and paying over a couple of payments.

It seems to be either the Americian express card I pay in full each month or the student loan. I would clear the two credit cards each month but I did that for a while and my FICO 8 score dropped 20 points. I started leaving a small balance on each and the score went back up as my research said it would.

This is the first time I have seen the FICO 2 and was just very surprised that it was so much lower so I came on this board to see if you guys had some advice. At 771 it seems to be about 10 points over what I need to get best mortgage terms so I might have to just live with it. If I could zoom in on exactly what is causing such a drop I could consider changing that. I could clear the student loan I guess and see if that causes a pop and if not change how I pay my monthly bills to see it Americian Express is the issue. I would rather not change either right now so trying to see if I can figure our exactly what it is. 

I appreciate any help you might provide!

[Thomas_Thumb]

AMEX follow-up example.

Assume the credit cards have $3k and $5k limits. Assume the npsl AMEX has a $30k POT. Further assume AMEX monthly expenses are typically $2k to $3k and the card has a reported HB of $3k.

Every month you let $2k to $2.8k report on the AMEX. In that case the EX score 2 utilization will be 67% to 100% month to month. You really want to keep it below 29%.

If we assume prepaying to reduce statement balance is not an option, then you must boost HB to $10k. The only way to do that is to run up charges on the card and let them report. Your CB/HB will be 100% that month. However, with the HB now at $10k, future months will show as 20% to 28% utilization.

P.S. Do not allow balances to report on 100% of your cards. Doing so will hurt all your mortgage scores even though EX Fico 8 typically will not drop.

You need to look at your EQ and TU mortgage scores. Purchase a Fico 3B report to get them.

[scwhite]

Hey thanks! Ya know my AX though added to my other two still would never be over 15% credit usage. The score is still in the very good range, just not excellent as I would like. But maybe that's it. I don't know what my FICO 5 is. My mortgage dashboard started showing what the FICO 2 is so I saw that for the first time a few days ago and started trying to figure out why it was so much lower then the FICO 8 that I see here on myFICO.