Questions about FICO

[KatieKatie]

Hi, hoping for some insight and guidance. I recently obtained a pre approval for a mortgage with prime rates based on scores. In order to avoid a credit score refresh I would need to close by 1/18/2025 to avoid a score refresh. This may or may not be possible depending on negotiations with the seller. In the meantime my mortgage scores just dropped 10,6,&5 points on these models respectively on this model which might put my middle score in a different tier. No change whatsoever in reason codes and one of them is The amount owed on your revolving and/or open-ended accounts is too high.

2 things happen from last month to this month. I went from AZE2 to AZEO on revolving cards (last month utilizing 5500/15000 on one card and $89/35,000 this month only 5000 out of  15,000  - overall utilization is about 3%)

I also had an AMEX Plat balance report at $1884 whereas prior month reported at $1117.

Question 1+) Does my charge account balance impact AZEO or AZE2? I plan to make sure the AMEX reports with a 0 balance this cycle but would love to know if that will be helpful. Am I penalized for the charge card balance in the 5,4,2 models?

Question 2) Is there a benefit of having the card reporting with a balance attributed to a bank card versus a store card? I can easily change this but I was taking advantage of a 0% financing offer and the balance is on a store card. I can eliminate this balance entirely but I need to carry a balance somewhere and figured the best place was a 0% option.  I was also worried that if I take it below 9% of the balance it will put my overall utilization as less than 1%. Would appreciate any guidance on best approach here as statement closes 12/21 and I can do whatever will optimize the score with this balance even if it's eliminating it.

Question 3) Is AZE2 better than AZEO for 5,4,2? I had 2 revolving balances reporting last month when  the score was a bit higher. 

Thanks for any guidance on this.

[GZG]

amex can off-cycle update your platinum balance if you give them a call and ask, if you want to pay that down to $0 and see if you get your points back

you might need to call during biz hours though to get to the credit reporting department

[KatieKatie]

Thanks! This is helpful to know for the future, as I was not aware AMEX would do a mid-cycle update.  Not necessary this time as my cycle closes in a few days so I'm going to go with a zero balance on it if pending transactions settle in time for me to pay them off. Super helpful to know for the future though or if I wind up with a small residual balance because of pending stuff.

[FicoMike0]

If you have an account reporting $5000/$15000, that's 33%, getting below 29% should help a little.

[SouthJamaica]

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@KatieKatie wrote:

Hi, hoping for some insight and guidance. I recently obtained a pre approval for a mortgage with prime rates based on scores. In order to avoid a credit score refresh I would need to close by 1/18/2025 to avoid a score refresh. This may or may not be possible depending on negotiations with the seller. In the meantime my mortgage scores just dropped 10,6,&5 points on these models respectively on this model which might put my middle score in a different tier. No change whatsoever in reason codes and one of them is The amount owed on your revolving and/or open-ended accounts is too high.

2 things happen from last month to this month. I went from AZE2 to AZEO on revolving cards (last month utilizing 5500/15000 on one card and $89/35,000 this month only 5000 out of  15,000  - overall utilization is about 3%)

I also had an AMEX Plat balance report at $1884 whereas prior month reported at $1117.

Question 1+) Does my charge account balance impact AZEO or AZE2? I plan to make sure the AMEX reports with a 0 balance this cycle but would love to know if that will be helpful. Am I penalized for the charge card balance in the 5,4,2 models?

Question 2) Is there a benefit of having the card reporting with a balance attributed to a bank card versus a store card? I can easily change this but I was taking advantage of a 0% financing offer and the balance is on a store card. I can eliminate this balance entirely but I need to carry a balance somewhere and figured the best place was a 0% option.  I was also worried that if I take it below 9% of the balance it will put my overall utilization as less than 1%. Would appreciate any guidance on best approach here as statement closes 12/21 and I can do whatever will optimize the score with this balance even if it's eliminating it.

Question 3) Is AZE2 better than AZEO for 5,4,2? I had 2 revolving balances reporting last month when  the score was a bit higher. 

Thanks for any guidance on this.

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1. Yes the charge card counts as an account with balance.

2. Yes and no. Theoretically there is no difference between a store card reporting a balance and a bank card reporting a balance, BUT some store cards are disregarded in AZEO type calculations, so it's not safe to rely on a store card as your only balance-reporting card.

3. No. For the mortgage scores, AZEO is better than AZE2.

[KatieKatie]

Thanks! Do you know if the 5,4,2 models have a score penalty for charge card balances?

Would it better to carry my 8.9% utilization or less on 1 bank card versus a store card?

[Thomas_Thumb]

AMEX charge card balances are not part of aggregate utilization calculations on mortgage Ficos.

The individual charge card balance is considered for card utilization on EX score 2 but not TU score 4 or EQ score 5. In the case of EX score 2 utilization is calculated based on highest balance (HB) ever reported. Card UT = 100× CB/HB where CB is current balance.

If your card has a POT limit, it has no bearing on this calculation. If current balance is $1.5k, high balance is $2k and POT limit is $30k, card UT would be 75% on EX score 2.

AMEX npsl charge cards are open accounts with 1 month terms. They are not revolving accounts. Therefore, you will be penalized for "no recent revolving activity" if it is the only card reporting a balance

P.S. a bankcard is best for reporting a balance. However, cobranded store cards are safe as well. Store only cards sometimes get coded differently.

[KatieKatie]

So helpful! Thank you!

[KatieKatie]

Just updating data points for future reference (probably my own). AMEX updated with a $0 charge balance and there was no change in the EQ mortgage score, as expected. The messaging changed slightly from a reference to amounts owed on revolving / charge card balances being too high to simply high revolving balances.

I have paid off my store card balance which was at 30% and that should report this week. I expect my scores will tank temporarily because it's my only account reporting with a balance. I have charged $1500 on a bank card with a $35k limit which will report around the 3rd of the month. Curious to see how many points this will restore when it all updates.