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Testing Credit Card Utilization Thresholds

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Senior Contributor

Re: Testing Credit Card Utilization Thresholds


@mowglidude wrote:

@Thomas_Thumb wrote:

Yes, in the range of 5 to 10 points. Commonly accepted thresholds for % of cards reporting are:

1) crossing above 30% (or 33%) depending on who you talk to

2) crossing above 50% (some people think hitting 50% is the milestone - not in my book)

 - I saw no change going from 2 of 6 to 3 of 6 cards with balances. However, I did see a drop on EQ Fico going to 4 of 6 (going from 50% to above 50%)

 

Other thresholds not as widely accepted but with some supporting data include:

1) Going above 20% of cards reporting balances

2) Going above 80% of cards reporting balances

3) Having 100% of cards report balances (profiles with only one card should report a balance on it). The all zero penalty is far greater than 1 of 1 cards reporting a balance.

 

Side note: Fico also looks at NUMBER of accounts with balances. Accounts are all inclusive with the possible exception of AU accounts. Too many accounts with balances can result in a score penalty independent of % of cards with balances.

 


So it looks like I went below 50% reporting. I can even go down to about 23% reporting and see if that does anything.


I think paying off the 3 cards with under $100 balances is a good test. That will have minimal impact on aggregate utilization but takes you below the 33% (and 30%) levels.

Fico 9: .......EQ 850 TU 850 EX 850
Fico 8: .......EQ 850 TU 850 EX 850
Fico 4 .....:. EQ 809 TU 823 EX 830 EX Fico 98: 842
Fico 8 BC:. EQ 892 TU 900 EX 900
Fico 8 AU:. EQ 887 TU 897 EX 899
Fico 4 BC:. EQ 826 TU 858, EX Fico 98 BC: 870
Fico 4 AU:. EQ 831 TU 872, EX Fico 98 AU: 861
VS 3.0:...... EQ 835 TU 835 EX 835
CBIS: ........EQ LN Auto 940 EQ LN Home 870 TU Auto 902 TU Home 950
Message 91 of 119
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Senior Contributor

Re: Testing Credit Card Utilization Thresholds


@Birdman7 wrote:

@Thomas_Thumb those could likely be the thresholds you may very well be correct. 


@Birdman7 

After looking at my data again, no change 2 or 6 (33%) to 3 of 6 (50%) kind of rules out 40% for me. Also the OP's score change going from 7/13 (54%) to 6/13 (46%) re-enforces 50% as a boundry.

 

Now I do see score drops on mortgage ficos going from 4 of 6 (67%) to 5 of 6 (83%) and again going from 5 of 6 to 6 of 6 (100%). I do believe 100% cards reporting is a threshold as all my mortgage Ficos took a significant hit going from 5 of 6 to 6 of 6.

Fico 9: .......EQ 850 TU 850 EX 850
Fico 8: .......EQ 850 TU 850 EX 850
Fico 4 .....:. EQ 809 TU 823 EX 830 EX Fico 98: 842
Fico 8 BC:. EQ 892 TU 900 EX 900
Fico 8 AU:. EQ 887 TU 897 EX 899
Fico 4 BC:. EQ 826 TU 858, EX Fico 98 BC: 870
Fico 4 AU:. EQ 831 TU 872, EX Fico 98 AU: 861
VS 3.0:...... EQ 835 TU 835 EX 835
CBIS: ........EQ LN Auto 940 EQ LN Home 870 TU Auto 902 TU Home 950
Message 92 of 119
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Super Contributor

Re: Testing Credit Card Utilization Thresholds

I definitely think 20%, 50% and 100%; the only question is what’s in between there to me, varying by version of course. And it probably varies by scorecard. 30%, 33%? Would be nice to know.

And the 80%? Cool dp,! I recall a reference to 75% or 88% somewhere I think.

For a collection of our current FICO scoring wisdom, updated as we learn, read the following. Watch the revision dates on the bottom of the first 8 posts as they are regularly updated: Link to Scoring Primer.


RIP:

Oldest/average age varies by bureau. Estimates above.


Updated Oct 2020, unless otherwise noted.

(Forgive typos, mobile.)(Everything said is Just IMHO.)

In order to better answer your questions and record your DPs, please provide your profile stats: Any baddies? Severity and recency? (clean/dirty), Number of accounts, both open and closed on CRs (thick/thin), AoOA? (Mature/young), AOYRA-Age of Youngest Revolving Account (new accounts/no new accounts)? Open/closed loan on CR?
For example, mine is clean/thick/mature/new account, with open loan on record.
If you don't know where you fall, just detail any baddies, your number of open and closed accounts, AoOA, AOYRA and whether you have a loan on record to start.

For utilization questions, list individual and aggregate utilizations, revolving and installment, please.
Message 93 of 119
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Valued Contributor

Re: Testing Credit Card Utilization Thresholds


@mowglidude wrote:


I'm going to go below 8% aggregate UT next billing cycle for my card. I was thinking maybe try first under 8.499% and see if it rounds down to 8%, maybe like 8.35%. What do you think? I have one more card that posts the next day, if all goes according to schedule, that I can bring that I can pay down, to arrive below 8% aggregate UT.


Based on what the Principal Scientist at FICO told us in the AMA, anything less than 9.50% should keep util from the 10% threshold.

 

He didn't directly say that the algorithm uses the typical midpoint rounding, but he did say that my example 9.02% would round to the nearest integer, or 9% in that case.

(Midpoint rounding is also called round half away from zero or commercial rounding. Anything (x).5 to less than (x+1).5 will be (x+1).0 , where x is an integer or whole number.

 

I'm setting up my own test for this on 2 cards reporting on the 2nd and 5th. First one will be at 9.450%, and the second at 9.492%.

 

Unless I got trolled by FICO's principal scientist, that won't cause any score change.

My total balances will only change around +$50 from the highest I've ever let report - $1688 - which didn't affect my score a few months ago.

27 FICO Scores + 3 VS3. MTG (Mortgage), AUT (Auto), and BKC (Bankcard) are scores 5,4, and 2 from the top.

Keeper of the Scrolls of ResilienceEQ FICO Resilience Index Score Leaderboard

46 forum members have shared this new credit score. Share yours today!

Message 94 of 119
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Super Contributor

Re: Testing Credit Card Utilization Thresholds


@CassieCard wrote:

@mowglidude wrote:


I'm going to go below 8% aggregate UT next billing cycle for my card. I was thinking maybe try first under 8.499% and see if it rounds down to 8%, maybe like 8.35%. What do you think? I have one more card that posts the next day, if all goes according to schedule, that I can bring that I can pay down, to arrive below 8% aggregate UT.


Based on what the Principal Scientist at FICO told us in the AMA, anything less than 9.50% should keep util from the 10% threshold.

 

He didn't directly say that the algorithm uses the typical midpoint rounding, but he did say that my example 9.02% would round to the nearest integer, or 9% in that case.

(Midpoint rounding is also called round half away from zero or commercial rounding. Anything (x).5 to less than (x+1).5 will be (x+1).0 , where x is an integer or whole number.

 

I'm setting up my own test for this on 2 cards reporting on the 2nd and 5th. First one will be at 9.450%, and the second at 9.492%.

 

Unless I got trolled by FICO's principal scientist, that won't cause any score change.

My total balances will only change around +$50 from the highest I've ever let report - $1688 - which didn't affect my score a few months ago.


@CassieCard OP did not have a score change when he crossed 9%. He is testing 8, you are testing 9. Unless there's some other reason he did not receive an award. 

For a collection of our current FICO scoring wisdom, updated as we learn, read the following. Watch the revision dates on the bottom of the first 8 posts as they are regularly updated: Link to Scoring Primer.


RIP:

Oldest/average age varies by bureau. Estimates above.


Updated Oct 2020, unless otherwise noted.

(Forgive typos, mobile.)(Everything said is Just IMHO.)

In order to better answer your questions and record your DPs, please provide your profile stats: Any baddies? Severity and recency? (clean/dirty), Number of accounts, both open and closed on CRs (thick/thin), AoOA? (Mature/young), AOYRA-Age of Youngest Revolving Account (new accounts/no new accounts)? Open/closed loan on CR?
For example, mine is clean/thick/mature/new account, with open loan on record.
If you don't know where you fall, just detail any baddies, your number of open and closed accounts, AoOA, AOYRA and whether you have a loan on record to start.

For utilization questions, list individual and aggregate utilizations, revolving and installment, please.
Message 95 of 119
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Super Contributor

Re: Testing Credit Card Utilization Thresholds

Either the thresholds are at 10 or 9 but you’ve got a hit 8 to be under 9 and when he hit 9 he didn’t get anything so is the threshold really at 9 and you have to hit 8 to remain under it?

You would think this is one of the most tested thresholds and that it would have to be 10 because everybody’s been doing it at 8.99% which is 9-according to that information.

The only other thing I can imagine is that he is on a dirty card and maybe maxed out and therefore not receiving a point gain for crossing the threshold.

And anywhere btw 7.5-<8.5 should =8.
For a collection of our current FICO scoring wisdom, updated as we learn, read the following. Watch the revision dates on the bottom of the first 8 posts as they are regularly updated: Link to Scoring Primer.


RIP:

Oldest/average age varies by bureau. Estimates above.


Updated Oct 2020, unless otherwise noted.

(Forgive typos, mobile.)(Everything said is Just IMHO.)

In order to better answer your questions and record your DPs, please provide your profile stats: Any baddies? Severity and recency? (clean/dirty), Number of accounts, both open and closed on CRs (thick/thin), AoOA? (Mature/young), AOYRA-Age of Youngest Revolving Account (new accounts/no new accounts)? Open/closed loan on CR?
For example, mine is clean/thick/mature/new account, with open loan on record.
If you don't know where you fall, just detail any baddies, your number of open and closed accounts, AoOA, AOYRA and whether you have a loan on record to start.

For utilization questions, list individual and aggregate utilizations, revolving and installment, please.
Message 96 of 119
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Valued Contributor

Re: Testing Credit Card Utilization Thresholds


@Birdman7 wrote:
Either the thresholds are at 10 or 9 but you’ve got a hit 8 to be under 9 and when he hit 9 he didn’t get anything so is the threshold really at 9 and you have to hit 8 to remain under it?

The thresholds in the util chart are the ones FICO uses - internal to the algorithm, and the only ones that matter. Those are post-rounding thresholds.

 

For that 10%-19% threshold they list, we would have to have utilization less than 9.5% to avoid that interval, to stay in the [0,9%] rounded interval. 9.50% would be 10% and most likely cause a relatively small loss of points.

 

I'm not seeing much score change in the entire 0-9% interval (post-rounding) on a highly sensitive new credit file, so I don't think anyone else will either. Unless it's due to balances or number of cards reporting. 100% of cards reporting is a significant penalty for my scorecard on EQ/TU 8 (-19/-14) - but nothing on EX 8.

27 FICO Scores + 3 VS3. MTG (Mortgage), AUT (Auto), and BKC (Bankcard) are scores 5,4, and 2 from the top.

Keeper of the Scrolls of ResilienceEQ FICO Resilience Index Score Leaderboard

46 forum members have shared this new credit score. Share yours today!

Message 97 of 119
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Super Contributor

Re: Testing Credit Card Utilization Thresholds

That’s exactly my thoughts on the matter but he crossed the threshold and did not receive any award.
For a collection of our current FICO scoring wisdom, updated as we learn, read the following. Watch the revision dates on the bottom of the first 8 posts as they are regularly updated: Link to Scoring Primer.


RIP:

Oldest/average age varies by bureau. Estimates above.


Updated Oct 2020, unless otherwise noted.

(Forgive typos, mobile.)(Everything said is Just IMHO.)

In order to better answer your questions and record your DPs, please provide your profile stats: Any baddies? Severity and recency? (clean/dirty), Number of accounts, both open and closed on CRs (thick/thin), AoOA? (Mature/young), AOYRA-Age of Youngest Revolving Account (new accounts/no new accounts)? Open/closed loan on CR?
For example, mine is clean/thick/mature/new account, with open loan on record.
If you don't know where you fall, just detail any baddies, your number of open and closed accounts, AoOA, AOYRA and whether you have a loan on record to start.

For utilization questions, list individual and aggregate utilizations, revolving and installment, please.
Message 98 of 119
Highlighted
Super Contributor

Re: Testing Credit Card Utilization Thresholds

So my only thought was the threshold might possibly be 9 instead of 10 because if not, he must be maxed out on the dirty card.

True enough utilization is weighted less on a dirty card.
For a collection of our current FICO scoring wisdom, updated as we learn, read the following. Watch the revision dates on the bottom of the first 8 posts as they are regularly updated: Link to Scoring Primer.


RIP:

Oldest/average age varies by bureau. Estimates above.


Updated Oct 2020, unless otherwise noted.

(Forgive typos, mobile.)(Everything said is Just IMHO.)

In order to better answer your questions and record your DPs, please provide your profile stats: Any baddies? Severity and recency? (clean/dirty), Number of accounts, both open and closed on CRs (thick/thin), AoOA? (Mature/young), AOYRA-Age of Youngest Revolving Account (new accounts/no new accounts)? Open/closed loan on CR?
For example, mine is clean/thick/mature/new account, with open loan on record.
If you don't know where you fall, just detail any baddies, your number of open and closed accounts, AoOA, AOYRA and whether you have a loan on record to start.

For utilization questions, list individual and aggregate utilizations, revolving and installment, please.
Message 99 of 119
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Frequent Contributor

Re: Testing Credit Card Utilization Thresholds


@Birdman7 wrote:
So my only thought was the threshold might possibly be 9 instead of 10 because if not, he must be maxed out on the dirty card.

True enough utilization is weighted less on a dirty card.

From what I understand, I have a clean card. I posted my stats earlier and I have no negs, etc...

Starting Score: 589/599/598 5/8/14
FICO® Score 8: EX 707 TU 705 EQ 708 06/19/20
Goal: 740 across all bureuas
Message 100 of 119
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