Testing "all-zero-but-one" theory -- Never mind, dropping this experiment. Too much work.

[Revelate]

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@NRB525 wrote:

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@Revelate wrote:

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@NRB525 wrote:

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@Revelate wrote:

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Whoa dude you have 770+ TU FICO 8 with that many balances reporting?  Go zero most of your accounts, take that 800 if your file is anything like LG's who tested this previously.

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The 775 is nice, but the more important number is $26,889. I'd rather see that go down, then 800 will be here soon enough.

And, I am in these cards for the long term, meaning they all get some form of use. Not smelly socks

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Maybe a dumb question since I don't know your goals within a year, but with your scores and today's cheap money environment, why haven't you just gone and airstruck those balances with a debt consolidation loan from any number of lenders who'd be falling over themselves to give you one in the current market?

Is that 26K sitting on 0% offers or something?

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Yes. Most all of the historically high balances were taking advantage of Forever offers at low APR during the credit bubble. Some ended up on less favorable but not terrible rates like 7.9% on my BofA AMEX. As of mid-2014 I started getting the 0% offers again.

BofA MC $4,000 0% to Nov 2016 (re-upped after that expired in May 2015) 4% fee.

BofA AX $5,400 0% to May 2016, was 4% fee, renewal planned

USBk $5,500 0% to Feb 2016, 3% fee. Latest USBank are 2.99% on 3% fee. This was the one 0% that came available so I jumped on it.

Each of the above three was at very high utilization when the 0% was taken. All below 50% now.

Chase Slate $5,000 on 4.99% Forever offer since Feb 2008 when it was $16k.

The rest are shorter term low APR "keep the card busy" items, but my list of PIF cards is growing.

The CapOne is my BT resource. The no BT Fee allows me to park the items off an expiring BT, then pay the 3% or 4% fee to get the funds back on the longer term 0% or low APR offer. Even if the funds stay there, it's only 10.9%APR, so 1% per month.

The two closed cards are $1k at 7.99% on locked terms and $1.6k at 1.99% on a Forever offer, both maintaining the accounts to extend the year 2000 card history as long as possible.

Interest cost for June was $85 including $27 on the LOC I took a cash advance on and am paying down. Average monthly interest in 2015 has been $125.

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Hrm, to really determine financial winning scenario, you have to account those fees as part of your math too... and I think you wind up behind quickly compared to taking out a 6%ish installment line, though sunk money argument now.  

In your shoes before the next re-up fee comes, I'd take a good look at the numbers.

[NRB525]

Not when the 3% or 4% fee goes toward an 18-19 month loan. 

Also, with the balances I have had, I doubt a 6% rates would be offered. $2k, sure, no problem. $30k, um, maybe not 6%

My scores were only 720ish in late 2014, and maybe a bit higher earlier in 2014, but then closer to $50k balances.

So, now that I'm back on a roll with BofA, they are getting back to their helpful ways of sending a 0% offer every month. It's all smooth sailing from here, i'll just keep patronizing BofA.

[Revelate]

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@NRB525 wrote:

Not when the 3% or 4% fee goes toward an 18-19 month loan. 

Also, with the balances I have had, I doubt a 6% rates would be offered. $2k, sure, no problem. $30k, um, maybe not 6%

My scores were only 720ish in late 2014, and maybe a bit higher earlier in 2014, but then closer to $50k balances.

So, now that I'm back on a roll with BofA, they are getting back to their helpful ways of sending a 0% offer every month. It's all smooth sailing from here, i'll just keep patronizing BofA.

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Not sure, I was sitting on a <7% pre-approval from LC at one point for 25K - I know that isn't gospel but you know my file ain't pretty.

Admittedly if you have the cash flow to airstrike 25K in the course of a year, you'll be OK.

[Anonymous]

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@SouthJamaica wrote:

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@Anonymous wrote:

Hey SJ.  What do you mean by "jump my utilization"? 

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I meant that the experiment is to start adding small balances to all the accounts as they post rather than to get the utilization up to a certain number to start.

Right now the total utilization is .3%. If over the next 30 days, each account posts at 1%, the total will be 1% at the end of the 30 days, but before then it will be something less than that until lthe 30 days are over.

The only thing I'm testing for is the theory that zero balances are better than small balances.

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Great!  Thanks for the clarification, SJ.  In your initial post, you mentioned that you might be posting all the ten other accounts at 2% each.  It struck me that this could easily cause your final total utilization to be a bit greater than 1%, if which case you would end up with the beginning of the experiment having a total U of 1% and at the end a total U of 2 or 3% (after rounding).

The key point I was making is that you want to have the same integer value in both cases: start and end of experiment.  Otherwise, if your scores drop, we can't know whether it was because of an increase in total U or an increase in the number of non-zero accounts.

As Revelate observes, you can solve this by having the other ten accounts having an extremely small amount on them, e.g. $3-4.  That way you can be confident that the final total U will still be < 0.99% and therefore (after rounding) the same at beginning and end.

[mrgoattoo]

I dont know about the theories, but what I do know is all my FICO scores are over 800 now from using the crap out of my credit cards every month and paying them off.

I even got a 'balance transfer' for $4500 or so on my citibank card at 0% APR some time back to buy a car and it bare scratched my overall scores.

I think not using your cards at all is worse than using them a lot and paying the balances off. 

[Anonymous]

Hey mrGTT.  (Nice screenname, btw.)

Just for clarity, there's no question that you are right about what could be called "the long game."  As a long term strategy, it's a great thing to use your cards naturally for as many things as you ordinarily want to buy (including charges like Netflix, cell phone bills, cable bills, whatever).  And then let those cards report their balances to the credit bureaus as normal, but make sure you "pay in full" the amount on the statement.  As a long term stratgey, that's awesome and nobody disputes it.

The question is about a very particular short-term strategy, something you do in the month or two before you need to get a really important credit pull, just to squeeze out every few extra points you can on your FICO score.  The general advice for that short-term strategy is:

     (1) Make sure that all of your cards (except 1) are reporting a $0 balance to the credit bureaus

     (2) On the remaining card, keep the reporting balance to < 9% of that card's credit limit.

The reason that many people think that #1 may get you some extra points, is that it seems as though FICO may use that as a factor in their scoring.  I.e. if you owe $100 total on 10 cards, you might get a little score boost from having it on exactly one card rather than spread out over all 10 cards.

The OP for this thread is interested in testing that idea out: is there even a small score boost in the short term from having most of his cards have a zero balance?

But pretty much everyone agrees that as a long term strategy, the one you mentioned is great. 

[masscredit]

How long does it take to get to the long term benefits?  I've been rebuilding for the last few years and doing what I can to maximize my scores for my current credit profile. I got to the point where I'm able to just let one card report each month.  Totaly utilization is usually 1-2%. Most of my other cards are used during the month then paid off before the statements close. I guess it's a form of instant gratification. Getting the most points possible at the time but it also sounds like some points and maybe higher credit limits can be lost down the road by doing that. 

[Anonymous]

Hey MassCredit.  You are rebuilding you say.  So I am guessing that you have some negative items: lates, collections, etc.  The real issue you are facing is that and as you know that's a time issue.  Eventually the bad stuff will all fall off.  But until then, nothing is going to help a lot. 

The "long term strategy" of just using your cards naturally is your best bet, but not because there's some special scoring power it has.  That is, something where FICO remembers that you have been using your cards, perhaps a lot, each month and so over time gives you extra points for it.  I am skeptical about that, though some people believe it happens,  The only history that FICO "remembers" for sure is the chronicle of negative events -- and those in painful detail (e.g. one late payment six years ago).

The CRAs began collecting detailed month by month payment history a few years ago for many credit cards.  (E.g. what was your reported balance five months ago on your Chase Slate and of that exactly how much did you pay?)  So down the road (FICO 10 maybe?) their models might begin to incorporate that kind of "positive" information, especially since people who "pay in full" each month are known to be far less risky than those who carry a balance (statistically speaking).

But still the Long Game strategy  that mrGTT mentioned is great for other reasons.  It's easy.  You don't have to do all the labor of zeroing things out.  It does show the CRAs and your CCCs that you can be billed and pay it in full regularly (whatever value that has -- and it may have substantial value in future models).  And it keeps you from every getting into trouble again: being late or building up debt.

My advice, for what it is worth, is to focus on negative stuff dropping off.  Make a list of the main events and when they are supposed to go.  Look at your score as the stuff falls off (and make sure it is really getting off your reports).

In the meantime just allow your accounts to age.  You realize you have plenty of cards from a a scoring perspective, right?  That more cards won't help you -- they'll just lower your AAoA?  The only thing that might help you, if you have no history of installment loans, is to get a credit builder or shared secure loan.

One final thought: using your CCs to pay for anything that you normally really want or need is fine.  The one thing I would advise againt sharply is trying to buy more stuff than you really want or need, in the mistaken belief that using your cards a lot will help your score.  That's the trap that CCCs use with rewards cards.  I myself think rewards cards are fine.  But the reason CCCs like issuing them is that they induce people (psychologically) to buy more stuff, thinking that they are getting Rewarded for it.  But they aren't.  Every time you buy something you don't really need it's a bad idea.  So the Long Game strategy of using cards naturally is fine, as long as that means using them to get the stuff that you need or want anyway: groceries, gas, paying the cell phone bill, etc.

[masscredit]

Thanks for the suggestions! It sounds like I'm on the right path! I had a BK in 2009 and a bunch of tax liens from the period. Took care of the state liens. Still have some Federal. They won't be going anywhere. The status of limitations will run out on the big one in a few years. I have a list of all of my included in backruptcy accounts broken down by each credit bureau and when they should age off.  I request early deleations when I can. The last one will be off of my reports early next year. I keep track of all of my scores and note if they change. Don't like applying for new credit because I don't want any inquiries (just have one reporting) and I don't want to reduce my AAoA. I also keep notes for all of my credit cards. Date opened, when I received a CLI,  how I received the increase (automatic, Luv Button or if I called the EO) and when I'm due for the next one. I use my cards for normal monthly expenses and keep utilization low. I spread the usage between cards to keep them active and hoping that helps for more CLIs as time goes on. I have two goals. One is to get all of my scores over 700 and the other is to get a few of my cards to limits over $10K. One of my Barclay cards made it there a couple of months ago. The Cap 1 cards are close. I think each of them will crest that mark when they receive their next increase (one in Aug and one in Dec).

I have 8 cards and one auto loan. It's actually my forth auto loan since 2011. First loan was for a car purchase. 17.1% through Cap 1. Refinanced with DCU in '13 and qualified for their best rate (1.9%).  Then bought a new car at the beginning of last year. That was totalled 7 months later so I had to replace it. Those two loans are also with DCU. I've wondered if a person loan would help me. I tried to get one from DCU when I was going to be paying off my state ax liens last year. I was declined because... I have tax liens. They told me that I can be approved for an auto loan because it's secured by the vehicle but personal loans have no security. 

The only thing that I feel that I have left to fine tune my scores is utilization so Ive been playing around with that. I've got to the point where they don't move with the all zero but one method (1-2% utilization). I'm starting to let my main card report a balance and then a few report smaller balances at the same time to see if that does anything. None of my scores changed doing that this month.

[NRB525]

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@masscredit wrote:

Thanks for the suggestions! It sounds like I'm on the right path! I had a BK in 2009 and a bunch of tax liens from the period. Took care of the state liens. Still have some Federal. They won't be going anywhere. The status of limitations will run out on the big one in a few years. I have a list of all of my included in backruptcy accounts broken down by each credit bureau and when they should age off.  I request early deleations when I can. The last one will be off of my reports early next year. I keep track of all of my scores and note if they change. Don't like applying for new credit because I don't want any inquiries (just have one reporting) and I don't want to reduce my AAoA. I also keep notes for all of my credit cards. Date opened, when I received a CLI,  how I received the increase (automatic, Luv Button or if I called the EO) and when I'm due for the next one. I use my cards for normal monthly expenses and keep utilization low. I spread the usage between cards to keep them active and hoping that helps for more CLIs as time goes on. I have two goals. One is to get all of my scores over 700 and the other is to get a few of my cards to limits over $10K. One of my Barclay cards made it there a couple of months ago. The Cap 1 cards are close. I think each of them will crest that mark when they receive their next increase (one in Aug and one in Dec).

I have 8 cards and one auto loan. It's actually my forth auto loan since 2011. First loan was for a car purchase. 17.1% through Cap 1. Refinanced with DCU in '13 and qualified for their best rate (1.9%).  Then bought a new car at the beginning of last year. That was totalled 7 months later so I had to replace it. Those two loans are also with DCU. I've wondered if a person loan would help me. I tried to get one from DCU when I was going to be paying off my state ax liens last year. I was declined because... I have tax liens. They told me that I can be approved for an auto loan because it's secured by the vehicle but personal loans have no security. 

The only thing that I feel that I have left to fine tune my scores is utilization so Ive been playing around with that. I've got to the point where they don't move with the all zero but one method (1-2% utilization). I'm starting to let my main card report a balance and then a few report smaller balances at the same time to see if that does anything. None of my scores changed doing that this month.

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You should do a share-secued loan. You put up basic funds in a savings account at a CU, then get a small term loan against it. That should start reporting Term Loan activity. DCU has their Savings-Secured loan for as little as a $200 loan, 3.5% APR.

How long have you been doing "all cards but zero except 1" ? How many months of that in a string?