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The 'All At Just Under 8.99% Utilization' experiment

Your FICO® Scores can impact your loan interest rates, terms, approvals and more.
Regular Contributor

The 'All At Just Under 8.99% Utilization' experiment

[EDIT: March 8, 2019: The 'Lucky Three' update of 28 FICO scores, moving from 7% utilization on each card to 6% on each.

 

24 FICO scores gained +8 to as much as +25 points. Middle mortgage score up +17. It's definitely a scorecard change.

 

Table with 32 scores in my latest reply to this post

https://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/The-All-At-Just-Under-8-99-Utilization-e...

]


For the first 12 billing cycles on my 2 new credit cards, I am going to have them both report their utilization ratios at 8% before paying them in full. (2000/6500 cl's, 160/520 (8%) self-imposed spending limits.)

 

Hypothesis: Excellent payment history and a reported maximum credit utilization of just under 8.99% for 12 contiguous billing cycles on 100% of only 2 cards, with no other credit accounts, will change my FICO 8 score from 'good' to 'excellent' range. (Reported maximum means 'High Balance' never goes above 8% of credit limit on each card. I understand that FICO doesn't use the high balance.) 

 

(Note: This is just a test of a hypothesis formed from reading several posts of some rather unusual positive FICO score changes from maintaining low utilization for several months at a time on a 'thin credit file'. I don't even think this hypothesis will be shown to be correct. I'll be happy if I end up with a FICO 8 750 in January 2020.)

 

The Plan:

  1. Start at $0 balance.
  2. Spend until reaching 8% of the credit limit on each card.
  3. Wait for statement balances to be reported to all 3 credit bureaus.
  4. Pay in full.
  5. Go to Step 1.

I'm using the myFICO Ultimate 3B+ subscription ($39.95 monthly) as my primary source for FICO credit scores.

Also using Experian CreditWorks Premium until February. ECP is an excellent service, and I wish TransUnion had something similar.


Lessons Learned / Mistakes Made:
  1.  Don't ever pay for monthly credit score updates that are based on Vantage Score 3.0 or TransUnion TransRisk. I did this last year when I was just starting out with the secured loan. A month after starting the loan, these 3 bureau scores were all 650. Apparently, I wouldn't have even had a FICO score until 6 months after 12/7/2017, when the loan was opened. I should have just waited and got the real credit score.
  2. I applied for a store credit card way too soon. I'm not sure exactly what lenders see when they do a hard pull (HP) on someone that just started a credit file (the loan, a month prior), but whatever it is, it's printed on a big red flag. Again, should have waited.
  3. Use a credit score reporting service that has a low cost trial option. Creditchecktotal.com has this for a $1 charge. Experian has a $4.99 first month trial. I use myFICO Ultimate 3B+ monthly reporting now (which is excellent), but in the beginning, when you're just trying to get approved for that first credit card, use one of the trial offers. 
  4. When you are about to make the final payment on a 'credit builder'/secured loan from your credit union, actually go in to see someone in person and ask if it can be kept open longer, at less than or equal to 8.50% utilization. (Not 8.51 or more, because this is half-even banker's rounding with precision 0, and 8.51 goes up to 9. 8.50 goes down to 8. You don't want 9.) It turns out I may have been able to keep mine open a few months longer, due to some weird automatic checking deduction payment amount not matching up precisely with the full payoff amount. It's really worth asking about. I just said, "Oh, go ahead and close it with a full payment from my checking right now." That was dumb.
  5. 'Pending' charges, as shown by logging in to your card issuers website, CAN (not will, just CAN) show up on a statement balance that is reported to the 3 bureaus. I charged the first month of my myFICO 3B+ subscription on December 31, 2018, and that charge said 'pending' until 2 days after I received Experian alerts to score changes and a balance update showing the $39.95 myFICO charge on a statement balance that was reported on January 2nd. 

Progress report (usually much more detail in my latest replies to this post):

  • Started with clean credit history on 12/7/2017. (Zero accounts, never a derogatory, no HP's )
  • 1 hard pull (HP) on that date to open a checking account with a local credit union. ('Fair' credit. I only know a Vantage Score 3.0 here: 650 across the board.
  • Opened checking, savings, and money market accounts. Took out a $500 'credit builder' (secured) loan.
  • January 23, 2018, hard pull and denied for Target Red Card. (Obviously, short credit history, no revolving account history, stupid to try.)
  • Continued making monthly payments of $42.35 on the secured loan.
  • December 4, 2018:  (11 payments made on secured loan, but only 10 showing on credit report. myFico 1B report for Transunion. FICO 8 at 666.
  • December 20, 2018: Decided to try for a credit card from my credit union. This would be my first revolving account on my credit history. I made the final payment (#12) on my secured loan, and they did a HP minutes after that: Transunion FICO 8 728. Approved for $2000CL/15.75% bank-issued Mastercard. (Installment loan utilization dropped to 8.47% from 17%, +62 point FICO 8 score gain.)
  • December 23, 2018: Signed up for the $1 free trial at creditchecktotal.com . Creditchecktotal.com (FICO 8): 748 EX, 750 EQ, 728 TU . Applied online for a bank-issued Visa card. Approved: $6500 CL/17.24% APR
  • December 28, 2018: I have a total of 4 HP's on my credit history now. 2 from this past week, 1 over a year ago, and 1 about to hit the 1 year mark in less than 4 weeks. FICO 8 Experian dropped from 748 to 729 due to 1 new inq/HP (was 0 inq at EX). I haven't received either of the 2 new cards yet.
  • December 31, 2018: Now using myFICO Ultimate 3B+ monthly monitoring. FICO 8 Scores are now: 729 EX, 728 TU, 730 EQ. A 19pt drop on Experian, 20 point drop on Equifax, no drop on TU from the 2 recent hard pulls for the 2 newly approved cards. Installment loan still on report and showing $42 left. No revolving card accounts yet. I just used my new credit union $2000CL Mastercard to pay for the first month of the Ultimate 3B+ subscription.
  • January 3, 2019: -81 DROP from the secured loan being reported closed. And then, in the same Experian credit alert report, I see a +51 GAIN from one new credit card reporting 2% utilization! I only had the card 3 days! See long reply from me below. Final score after all that is FICO 8 Experian 699. Second card still hasn't arrived in mail. myFICO Ultimate 3B+ monthly hasn't alerted me to any FICO score changes. Today's data is from Experian CreditWorks Premium monitoring, which is spooky fast.
  • January 4, 2019: Card 2 shows up on Experian report. No change in score, still 699. See my latest reply to this post for a lot of extra EX scores and reasons why adding a second card didn't change my EX score. myFICO Ultimate 3B+ monthly alerted me to an Experian FICO score change: 699. The 'FICO Score 8 Ingredients' for this update do not match with updated information on Experian's current report as of today. For example: "You have no qualifying accounts to calculate your revolving utilization %". Experian's shows 2 revolving, $40 out of $8500 balance, 1% total utilization, etc.
  • January 5, 2019: myFICO Ultimate 3B+ alert: LOAN PAID. That was the secured loan reporting closed. The FICO 8 Score changes already happened at Experian, ending up at 699 as I updated previously. Also an Equifax update: the paid off loan was reported and Card 1 was added on EQ. EQ FICO 8 Score now 684. Credit Karma alert for Equifax updates: loan paid, and both cards are showing now. More on this in the long form reply/update to this post.
  • January 6, 2019: Credit Karma alert that Transunion (TU) was updated. +84 point gain. 629 to 713 Vantage Score 3.0. This might actually stick, because it says that the closed loan and 1 new card at $6500 CL is on the report. I still think it's going to drop 35 points or more when the loan closing is factored in. [EDIT: Yep..it did... -41 to 672.] These Vantage Score updates that I post are just for people trying to figure out the scoring methodology.
  • January 7, 2019: myFICO alert to Transunion updates. 1 card showing there, along with the loan closure. New FICO 8 Score: TU 689. Updated scores in my latest reply to this post.
  • January 21, 2019: TransUnion changed its mind about 1 of 2 cards with a balance that it used on January 7 to calculate my score. -4 point change today, reported by myFICO alerts. 'Too many accounts with balances' was added as a factor. That factor is surprisingly not listed on EX or EQ reports.
  • January 22, 2019: Now tracking 32 scores with reason code text on 28 FICO scores. Table in latest reply to this post.
  • January 23, 2019: Another myFICO score alert to TU score change. +4 points. So back to 689. I think it's due to an inquiry from January 23, 2018 moving past the 1 year mark.
  • January 31, 2019: TU went up +7 points before any new statement balances were reported. Possibly due to 1 inquiry ageing past 1 year on January 23rd.
  • February 3, 2019: EX went down -3 points with the first of 2 statement balances reporting an increase in balance from $40 to $135 (2% to 7% individual utilization with the other card balance still at $0. No other changes. This was observed at Experian CreditWorks, not from myFICO alerts alone. ECP shows you a new report every single day, so it's easy to see the differences.
  • [EDIT] February 9, 2019: New table of 32 scores posted with updates on moving from 1 card with balance to 2 cards with a balance. 7/7/7% utilization. https://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/The-All-At-Just-Under-8-99-Utilization-e...

Tags: utilization, new credit

Lowly turtle of the myFICO community.Bank-Issued Mastercard $2,000Bank-Issued Visa $6,500In the lab until January 2020
Message 1 of 49
48 REPLIES 48
Frequent Contributor

Re: The 'All At Just Under 8.99% Utilization' experiment

You must be a scientist; I like your hypothesis-based experiment! Your strategy is almost exactly what I've been doing for several months in a similar experiment of my own.

 

My approach is a little less complex: I simply assure that all my cards report less than 8.9% utilization each month. I keep track of three monthly dates for each card: Payment due date; statement closing date; and reporting date. Regardless of the due dates, I make sure that all cards are paid down to below 8.9% each month before their statements close. What you do after the statement cuts is immaterial; paying in full won't affect your score. It's the statement amount that they report.

 

That strategy has resulted in major FICO score increases, which makes sense since 30 percent of your FICO score is determined by amount of debt (utilization). Keep your utilization low and your score will go up.

 

My file is a lot thicker than yours, but the principle is the same no matter what your history. Good luck and please keep us posted on your experiment!

 

Message 2 of 49
Regular Contributor

Re: The 'All At Just Under 8.99% Utilization' experiment


@ridgebackpilot wrote:
My approach is a little less complex: I simply assure that all my cards report less than 8.9% utilization each month. I keep track of three monthly dates for each card: Payment due date; statement closing date; and reporting date. Regardless of the due dates, I make sure that all cards are paid down to below 8.9% each month before their statements close. It's the statement amount that they report.

 Oh I'm so glad you replied! I really need to know when the statement balances have been reported, so that I know when I can start spending again. I never want either card issuer (my credit union or Citi) to see a balance above 8% utilization. I know that most people will say this condition is pointless, but I want to see if it has any effect on CLI's.

 

How do you keep track of the reporting date? Does it work for all 3 bureaus? I don't mind paying for credit score monitoring to make this work - I just want to use the right service for it.

 

That strategy has resulted in major FICO score increases, which makes sense since 30 percent of your FICO score is determined by amount of debt (utilization). Keep your utilization low and your score will go up.


I've found more than a few posts concerning experiments like ours where someone found that 'Payment History + Low Utilization' was the most important factor, and it didn't matter if one of their cards were used, half the cards were used or all of them were used.

 

Assuming you were checking your FICO 8 score monthly, how much of an increase did you see each month? Quarterly?

Lowly turtle of the myFICO community.Bank-Issued Mastercard $2,000Bank-Issued Visa $6,500In the lab until January 2020
Message 3 of 49
Frequent Contributor

Re: The 'All At Just Under 8.99% Utilization' experiment

Finding out when your statements are cut is relatively easy. Most credit card companies will notify you when your statement is available, and its also noted in your account on their websites. Make note of the statement date as it will be the same each month.

 

Determining your reporting date with any accuracy is more challenging. You definitely need to subscribe to a free or paid credit monitoring service (like myFICO) that tells you when your cards report. However, it's important to realize that not all of these services give you real-time information. Even myFICO doesn't always report in a timely manner. (Note that Chase will report to the credit bureaus anytime you ask them to, but I believe they're the only bank willing to do that).

 

Some credit card companies offer free credit monitoring and some of these services report in real-time. For example, with Capital One's CreditWise program, I was notified within moments of a hard pull on my TU report earlier this week. By contrast, myFICO doesn't always report changes in a timely manner. However, their reporting dates seem to be accurate. Just make sure you sign up for a service that gives you information in real-time if you can.

 

I keep a spreadsheet with dates and balances for each of my cards. That may seem too onerous, but it helps ensure you never miss a payment, you know exactly when your statements close each month, and approximately when each card reports to the credit bureaus.

Message 4 of 49
Valued Contributor

Re: The 'All At Just Under 8.99% Utilization' experiment


@CassieCard wrote:

@ridgebackpilot wrote:
My approach is a little less complex: I simply assure that all my cards report less than 8.9% utilization each month. I keep track of three monthly dates for each card: Payment due date; statement closing date; and reporting date. Regardless of the due dates, I make sure that all cards are paid down to below 8.9% each month before their statements close. It's the statement amount that they report.

 Oh I'm so glad you replied! I really need to know when the statement balances have been reported, so that I know when I can start spending again. I never want either card issuer (my credit union or Citi) to see a balance above 8% utilization. I know that most people will say this condition is pointless, but I want to see if it has any effect on CLI's.

 

How do you keep track of the reporting date? Does it work for all 3 bureaus? I don't mind paying for credit score monitoring to make this work - I just want to use the right service for it.

 

That strategy has resulted in major FICO score increases, which makes sense since 30 percent of your FICO score is determined by amount of debt (utilization). Keep your utilization low and your score will go up.


I've found more than a few posts concerning experiments like ours where someone found that 'Payment History + Low Utilization' was the most important factor, and it didn't matter if one of their cards were used, half the cards were used or all of them were used.

 

Assuming you were checking your FICO 8 score monthly, how much of an increase did you see each month? Quarterly?


 

With the exception of a few outliers like U.S. Bank and Elan Financial Services (owned by U.S. Bank), most card issuers report to the credit reporting agencies on the same date the statement closes.  Citi's Statement Close date is usually 4 days after the Payment Due date, and their reporting date is the same as the Statement Close date.





Message 5 of 49
Regular Contributor

Re: The 'All At Just Under 8.99% Utilization' experiment


@MaizeandBlue wrote:

With the exception of a few outliers like U.S. Bank and Elan Financial Services (owned by U.S. Bank), most card issuers report to the credit reporting agencies on the same date the statement closes.  Citi's Statement Close date is usually 4 days after the Payment Due date, and their reporting date is the same as the Statement Close date.


Thank you for that Citi info. I probably won't have the card until next week, so I can't sign in to the card services portal yet.

 

I naturally assume that all banks and computer programs are non-deterministic entities that should never be trusted (lol), so I'm looking for a way to find out if/when that statement closing balance has been included in my credit report. I mean, Citi could 'report' it and that date is easy enough to find out, but when does it actually get merged into my credit file? With all the reports these bureaus receive, I find it hard to believe they all do it instantly.

Lowly turtle of the myFICO community.Bank-Issued Mastercard $2,000Bank-Issued Visa $6,500In the lab until January 2020
Message 6 of 49
Regular Contributor

Re: The 'All At Just Under 8.99% Utilization' experiment


@ridgebackpilot wrote:
Determining your reporting date with any accuracy is more challenging. You definitely need to subscribe to a free or paid credit monitoring service (like myFICO) that tells you when your cards report. However, it's important to realize that not all of these services give you real-time information. Even myFICO doesn't always report in a timely manner.

I think will just start using the myFICO Ultimate 3B+ at $39.95 monthly.

 

Some credit card companies offer free credit monitoring and some of these services report in real-time. For example, with Capital One's CreditWise program, I was notified within moments of a hard pull on my TU report earlier this week. By contrast, myFICO doesn't always report changes in a timely manner. However, their reporting dates seem to be accurate.

I was at my credit union when they did a hard pull right in front of me and within minutes I got a notification of that from Credit Karma. Thanks for the info on myFICO.

 

I keep a spreadsheet with dates and balances for each of my cards. That may seem too onerous, but it helps ensure you never miss a payment, you know exactly when your statements close each month, and approximately when each card reports to the credit bureaus.


 Too onerous? lol I set up a Microsoft Flow template in Office 365 already for mobile push notifications of important dates and email received from either my credit union or Citi. I already made the Excel sheet with chart ready to go.

 

You should make a post with some of your findings! I'm sure your data points would help a lot of people.

Lowly turtle of the myFICO community.Bank-Issued Mastercard $2,000Bank-Issued Visa $6,500In the lab until January 2020
Message 7 of 49
Valued Contributor

Re: The 'All At Just Under 8.99% Utilization' experiment


@CassieCard wrote:

@MaizeandBlue wrote:

With the exception of a few outliers like U.S. Bank and Elan Financial Services (owned by U.S. Bank), most card issuers report to the credit reporting agencies on the same date the statement closes.  Citi's Statement Close date is usually 4 days after the Payment Due date, and their reporting date is the same as the Statement Close date.


Thank you for that Citi info. I probably won't have the card until next week, so I can't sign in to the card services portal yet.

 

I naturally assume that all banks and computer programs are non-deterministic entities that should never be trusted (lol), so I'm looking for a way to find out if/when that statement closing balance has been included in my credit report. I mean, Citi could 'report' it and that date is easy enough to find out, but when does it actually get merged into my credit file? With all the reports these bureaus receive, I find it hard to believe they all do it instantly.



My experience is that Experian is the quickest to update their files, followed by Equifax, with TransUnion being the slowest.  All three CRAs update their files at midnight Pacific Time.  So, for example, if Citi closes a statement on 12/25 and sends the information the CRAs, Experian would display the updated info at 12:01 a.m. on 12/27, Equifax about 2-3 days later, and TransUnion about 5 days later.  I've also noticed that it varies if there's an intervening weekend. Your experience may vary from that though.

 

 





Message 8 of 49
Regular Contributor

Re: The 'All At Just Under 8.99% Utilization' experiment


@MaizeandBlue wrote:

My experience is that Experian is the quickest to update their files, followed by Equifax, with TransUnion being the slowest.  All three CRAs update their files at midnight Pacific Time.  So, for example, if Citi closes a statement on 12/25 and sends the information the CRAs, Experian would display the updated info at 12:01 a.m. on 12/27, Equifax about 2-3 days later, and TransUnion about 5 days later.  I've also noticed that it varies if there's an intervening weekend. Your experience may vary from that though.


Thank you - that is very helpful!

Lowly turtle of the myFICO community.Bank-Issued Mastercard $2,000Bank-Issued Visa $6,500In the lab until January 2020
Message 9 of 49
Valued Contributor

Re: The 'All At Just Under 8.99% Utilization' experiment


@CassieCard wrote:

For the first 12 billing cycles on my 2 new credit cards, I am going to have them both report their utilization ratios at 8% before paying them in full. (2000/6500 cl's, 160/520 (8%) self-imposed spending limits.)

 

Hypothesis: Excellent payment history and a reported maximum credit utilization of just under 8.99% for 12 contiguous billing cycles on 100% of only 2 cards, with no other credit accounts, will change my FICO 8 score from 'good' to 'excellent' range.

 

The Plan:

  1. Start at $0 balance.
  2. Spend until reaching 8% of the credit limit on each card.
  3. Wait for statement balances to be reported to all 3 credit bureaus.
  4. Pay in full.
  5. Go to Step 1.

The big question: Is there a way to know exactly when all 3 bureaus have that updated balance?

 

Would the myFico Ultimate 3B+ at $39.95 monthly show me this?


Credit profile info:

  • Started with clean credit history on 12/7/2017. (Zero accounts, never a derogatory, no HP's )
  • 1 hard pull (HP) on that date to open a checking account with a local credit union. ('Fair' credit. I only know a Vantage Score 3.0 here: 650 across the board.
  • Opened checking, savings, and money market accounts. Took out a $500 'credit builder' (secured) loan.
  • January 23, 2018, hard pull and denied for Target Red Card. (Obviously, short credit history, no revolving account history, stupid to try.)
  • Continued making monthly payments of $42.35 on the secured loan.
  • December 4, 2018:  (11 payments made on secured loan, but only 10 showing on credit report. myFico 1B report for Transunion. FICO 8 at 666.
  • December 20, 2018: Decided to try for a credit card from my credit union. This would be my first revolving account on my credit history. I made the final payment (#12) on my secured loan, and they did a HP minutes after that: Transunion FICO 8 728. Approved for $2000CL/15.75% Mastercard. (Installment loan utilization dropped to 8.47% from 17%, +60 point FICO 8 score gain.)
  • December 23, 2018: Signed up for the $1 free trial at creditchecktotal.com . Creditchecktotal.com (FICO 8): 748 EX, 750 EQ, 728 TU . Applied online for Costco Anywhere Visa Card by Citi. Approved: $6500 CL/17.24% APR
  • December 28, 2018 (Today): I have a total of 4 HP's on my credit history now. 2 From a week ago, 1 over a year ago, and 1 about to hit the 1 year mark in less than 4 weeks. FICO 8 Experian dropped from 748 to 729 due to the 2 new HP's. I haven't received either of the 2 new cards yet.

#2 of your plan doesn't make sense to me.  Its quite possible to spend up to 100% of your credit limit in any given month, then pay down the balance by reporting date so the lender only reports a small (< 8.9%) balance.  Limiting your spend to 8% of your card limit, especially if you'll spend cash in excess of that amount, is a sub-optimal strategy when you can always make multiple payments during the month to pay down your card balance and optimize the balance reported by the lender.  There's no rule that says you can only make one payment per month.

 

I don't intend to rain on your parade but I doubt you will move to Excellent (defined as a FICO score > 800) on all three CRAs in one year.  FICO scores are essentially logarithmic so it becomes more difficult to increase scores rapidly once you're above a 700 score.  Not to mention you have a loan that will be reported as paid, and two new credit accounts.  All three events will negatively affect your score and with a thin profile the effects are magnified.  The loss of the loan affects your credit mix (10% of FICO score), and the two new accounts will temporarily decrease your score because they initially represent increased risk.





Message 10 of 49