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Utilization 9% --> 8%; FICO 8 +7

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SouthJamaica
Mega Contributor

Re: Utilization 9% --> 8%; FICO 8 +7


@Anonymous wrote:

@iv wrote:

@Anonymous wrote:

With that method of rounding, using what is commonly called 'precision 0' in back end financial software, 8.50 becomes 8.0, 8.51 would be 9.0.  A 9.50 would be 10.0.


Except that there is absolutely no reason for that rounding method to be used in a scoring model.

 

The issues that it is meant to address don't exist here, and I've seen no compelling evidence to show that FICO scoring models actually round at all (vs truncation/threshold).

This confuses me a little, because so many posts say to stay under 8.99% , which I assume is playing it safe to avoid possible rounding and crossing into the [9, 29) utilization interval. (Or [9,19) according to some other posts.)

 

As of today, my score has been calculated based on a 0.47% real utilization using 40/8500. Most people say that gets rounded up to 1% utilization according to FICO. So if my next statement balances show 179.90 and 584.68 for balances on my 2 cards with a combined credit limit of 8500, did I just cross into that [9,29) interval with this new 8.995% aggregate utilization?



@iv wrote:
@Anonymous wrote:

Of course, there might be presentation view rounding - what we see - that is separate from the actual real percentage used as an input to the FICO algorithm, which might be rounding to 2 or 4 decimal places. 


Not "might be". There is clearly zero relationship between how any particular end-user display chooses to round, not round, or as can frequently happen, actually display different data entirely (AU vs non-AU, etc), compared to the real scoring models.

Yes, this much is certain. I can see how one part of Experian's report shows my 0.47% real utilization as 0% on one section and 1% on another. So obviously the report value should never be used when trying to test utilization intervals for score changes.

 


@iv wrote:

@Anonymous wrote:
I'm just playing it safe and never going above 8.50 utilization.

Nothing wrong with that - couldn't hurt to aim for even lower, if you were concerned about how other, less well-known models might react, too.

And here I thought everything in the [1,9) interval was treated the same. I saw a post where someone thought 5% was a threshold. In about 10 days, my 2 cards will be reporting 6.75% and 7.00% statement balances and I'll post the changes to 32 different scores. Then next month it will be 6/6 and then 5/5 after that. It seems that the general consensus is that I shouldn't see very much of a score change from now through April, when I get that 5/5 report.


After 3 months of watching my EX scores and reports on a daily basis it is IMHO indisputable that EX scores are using their rounded percentage, rather than the actual percentage, in their algorithms.


Total revolving limits 651200 (530700 reporting) FICO 8: EQ 706 TU 714 EX 715

Message 11 of 29
Anonymous
Not applicable

Re: Utilization 9% --> 8%; FICO 8 +7


@SouthJamaica wrote:


After 3 months of watching my EX scores and reports on a daily basis it is IMHO indisputable that EX scores are using their rounded percentage, rather than the actual percentage, in their algorithms.


But that's based on what you see on the report, and it's very possible that's not how the FICO algorithm is using those numbers.

I mean, @iv could be right and FICO might just truncate percentage calculations.

 

Let's say we're calculating aggregate utilization and the raw data is a $123.25 statement balance with a $2000.00 credit limit.

 

Those two values can go to the FICO scoring algorithm  and the 'presentation view' software separately, and in fact this is most likely due to a very common software practice called 'separation of concerns'. What the presentation software does with those values could definitely be different from what the actual algorithm does with them.

 

So it could very well be that the best way to test utilization brackets is to use 123.25/2000 value, or 0.061625 (6.1625%) - not whatever these various credit monitoring reports say.

Message 12 of 29
SouthJamaica
Mega Contributor

Re: Utilization 9% --> 8%; FICO 8 +7


@Anonymous wrote:

@SouthJamaica wrote:


After 3 months of watching my EX scores and reports on a daily basis it is IMHO indisputable that EX scores are using their rounded percentage, rather than the actual percentage, in their algorithms.


But that's based on what you see on the report, and it's very possible that's not how the FICO algorithm is using those numbers.

I mean, @iv could be right and FICO might just truncate percentage calculations.

 

Let's say we're calculating aggregate utilization and the raw data is a $123.25 statement balance with a $2000.00 credit limit.

 

Those two values can go to the FICO scoring algorithm  and the 'presentation view' software separately, and in fact this is most likely due to a very common software practice called 'separation of concerns'. What the presentation software does with those values could definitely be different from what the actual algorithm does with them.

 

So it could very well be that the best way to test utilization brackets is to use 123.25/2000 value, or 0.061625 (6.1625%) - not whatever these various credit monitoring reports say.


As I said my conclusion isn't based on theory, it's based on daily observation of what does and doesn't move the score. And it has been whole number changes based on the rounded scores.


Total revolving limits 651200 (530700 reporting) FICO 8: EQ 706 TU 714 EX 715

Message 13 of 29
NRB525
Super Contributor

Re: Utilization 9% --> 8%; FICO 8 +7

SJ, your observation method came into the last three months with your fixated belief that your file does not respond when individual card utilization remains below 30% and more than 0%. In other words, you think yourself unique in not being affected when crossing 10% individual utilization. I am not sure how you developed this theory but it is complete nonsense.  

 

You also tried to make the case on separate occasions you had found some new aggregate thresholds, at each of 6% and 7%, when the only real change at those times was card movement across the individual 10% threshold.  

 

Individual card utilization at the 10% level IS what is moving your score, even when you have other cards at higher individual utilization.

High Bal Jan 2009 $116k on $146k limits 80% Util.
Oct 2014 $46k on $127k 36% util EQ 722 TU 727 EX 727
April 2018 $18k on $344k 5% util EQ 806 TU 810 EX 812
Jan 2019 $7.6k on $360k EQ 832 TU 839 EX 831
March 2021 $33k on $312k EQ 796 TU 798 EX 801
May 2021 Paid all Installments and Mortgages, one new Mortgage EQ 761 TY 774 EX 777
April 2022 EQ=811 TU=807 EX=805 - TU VS 3.0 765
Message 14 of 29
SouthJamaica
Mega Contributor

Re: Utilization 9% --> 8%; FICO 8 +7

Individual utilization changes not crossing the 30% line, unaccompanied by overall utilization changes in the rounded percentages, have not moved my FICO 8 score even a single point.


Total revolving limits 651200 (530700 reporting) FICO 8: EQ 706 TU 714 EX 715

Message 15 of 29
NRB525
Super Contributor

Re: Utilization 9% --> 8%; FICO 8 +7

So you still think you have an aggregate threshold at 6%, at 7%, and at 8%?
High Bal Jan 2009 $116k on $146k limits 80% Util.
Oct 2014 $46k on $127k 36% util EQ 722 TU 727 EX 727
April 2018 $18k on $344k 5% util EQ 806 TU 810 EX 812
Jan 2019 $7.6k on $360k EQ 832 TU 839 EX 831
March 2021 $33k on $312k EQ 796 TU 798 EX 801
May 2021 Paid all Installments and Mortgages, one new Mortgage EQ 761 TY 774 EX 777
April 2022 EQ=811 TU=807 EX=805 - TU VS 3.0 765
Message 16 of 29
SouthJamaica
Mega Contributor

Re: Utilization 9% --> 8%; FICO 8 +7

I have never claimed to know where the aggregate thresholds are. I have merely reported on certain events which have moved the score significantly.

 

 

 

 

 


Total revolving limits 651200 (530700 reporting) FICO 8: EQ 706 TU 714 EX 715

Message 17 of 29
Anonymous
Not applicable

Re: Utilization 9% --> 8%; FICO 8 +7


@NRB525 wrote:

 

Individual card utilization at the 10% level IS what is moving your score, even when you have other cards at higher individual utilization.


Isn't the common belief on this forum that the FICO algorithm after aggregate utilization looks to your trade line with the highest individual utilization?  If one has a single card at (say) 30+% utilization, wouldn't that make a different revolver going from something like 25% utilization down to 5% utilization (across 10%) a non-factor in terms of individual card utilization in the eyes of the algorithm?  This is of course going under the assumption that no aggregate utilization threshold is crossed.  The only asterisk that I'd otherwise put on this excercise would be that the 25% card in this example when crossing 10% wouldn't be able to report $0, as that would introduce another variable in a change in the number/percentage of accounts with a balance.

Message 18 of 29
NRB525
Super Contributor

Re: Utilization 9% --> 8%; FICO 8 +7

See my notes added to the thread discussing DTI and Closed accounts. In the process of logging every alert, there are score changes happening at lower individual card thresholds when other cards have higher utilization at the same time.
High Bal Jan 2009 $116k on $146k limits 80% Util.
Oct 2014 $46k on $127k 36% util EQ 722 TU 727 EX 727
April 2018 $18k on $344k 5% util EQ 806 TU 810 EX 812
Jan 2019 $7.6k on $360k EQ 832 TU 839 EX 831
March 2021 $33k on $312k EQ 796 TU 798 EX 801
May 2021 Paid all Installments and Mortgages, one new Mortgage EQ 761 TY 774 EX 777
April 2022 EQ=811 TU=807 EX=805 - TU VS 3.0 765
Message 19 of 29
SouthJamaica
Mega Contributor

Re: Utilization 9% --> 8%; FICO 8 +7

Confirming that the flip from rounded 9% to rounded 8% in aggregate utilization actually affected FICO 8, today the aggregate utilization oscillated back from 8% to 9% .... and 7 points dropped off.

 

There was no change in number of accounts reporting balance, since it was caused by a small balance going to a 15% balance.

 

There was no change in higher utilization accounts, as those stayed the same.

 


Total revolving limits 651200 (530700 reporting) FICO 8: EQ 706 TU 714 EX 715

Message 20 of 29
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