Utilization and AAoA Thresholds?

[atarvuzdar]

Hoping someone can help. I've searched the site front and back and can't seem to find anything about the different thresholds for utilization (both overall and individual CC) and AAoA.

Apologies for asking a question which has probably been asked a million times. Anyone have any info on this or could point me to where that info may be?

[Anonymous]

Total Utilization:

        < 8.99% for best results (but with at least one card showing a small balance)

        < 29% is also a breakpoint

        Some people think there are no breakpoints between 9% and 29% but I am not certain that's been proven

        As util gets higher things get worse

Individual Utilization:

        < 29% will eliminate all penalty

        Some people experience no penalty much higher, e.g. at 48%

        Everyone experiences substantial penalty when it gets high enough

AAoA:

        Very little is known for sure here

        I believe the consensus may be that 2.0 is helpful

        And also that an 850 credit score can be achieved with an AAoA of 8.0

[Anonymous]

To add to what CGID said, some believe that total utilization thresholds may exist at 49%, 69% and 89% as well.  There are a ton of different scoring models though, so the chances of a blanket statement covering all possibilities is unlikely.

AAoA thresholds are believe to be at whole numbers... 2.0 years, 3.0 years, etc.  Whether or not one exists at each whole number from 1-8 is arguable and difficult to test.  I believe that T. Thumb reported that maximum scoring can be had at an AAoA of 7 years and 8 months, which to my knowledge is the only break point believed to exist that's not at an actual whole number.

[Anonymous]

New here, just my experience today. Got a myfico notification that there was a change to my report. I got about a 4 point increase in my Experian score when the utilization of my largest balance went down to 89%. Although total utilization is probably somewhere in the 60's%.

[Anonymous]

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@Anonymous wrote:

To add to what CGID said, some believe that total utilization thresholds may exist at 49%, 69% and 89% as well.  There are a ton of different scoring models though, so the chances of a blanket statement covering all possibilities is unlikely.

AAoA thresholds are believe to be at whole numbers... 2.0 years, 3.0 years, etc.  Whether or not one exists at each whole number from 1-8 is arguable and difficult to test.  I believe that T. Thumb reported that maximum scoring can be had at an AAoA of 7 years and 8 months, which to my knowledge is the only break point believed to exist that's not at an actual whole number.

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That's interesting about the AAoA of 7.8 years. I had a 20 points increase on EX this month and couldn't figure out why. I just looked and see that my AAoA is 7.8 years. Maybe that is the reason for the increase.

[tlavery]

What about utilization on installment loans such as student loans?  I read somewhere that once an installment loan drops below 95% that you should see an increase.  Is that true?  I am also interested to know if there is a hit for anything over 100% such as a student loan in deferment (accumulating interest) or on income based payment program where the payment is less than accumulating interest.

[Anonymous]

The primary (possibly only) driver for IU is total installment util, where you consider all open loans together (total amount owed / total original loan amount).

There's no reason to believe that a breakpoint exists at 95%.

Some people have conjectured that there might be some scoring help from going to from > 101% to < 99% but that is highly speculative.

The only breakpoint known for certain for installment utilization is around 9%.  It's possible that you might get some benefit earlier (e.g. 60%?  70%?).

I am guessing you have a good chunk of debt in student loans and that your utilization is > 101%.  Is that right?

[tlavery]

Yes, the student loans have been ignored for 20 years, so the utilization is WELL over 100%.  I just finished a consolidation, so it will be brought back to 100%.  It is over $11,000, so getting it under 9% is going to take quite some time.  I was just hoping to get a little boost when it was no longer over 100%.

[TimFlorida]

FWIW, the following is one of my FICO 8 scoring factors:

Your balances on mortgage and/or non-mortgage installment loans are low or substantially paid off.

FICO® Scores evaluate the total outstanding installment loanbalances in relation to the original loan amounts on those accounts. Having made substantial payments on mortgage and/or non-mortgage installment loans is seen as lower risk. As installment loan balances decrease, they have less impact on a FICO®Score. Note, consolidating or moving debt from one account to another will usually not help a FICO® Score since the same total amount is owed and the score may go down due to opening a new account.

Percentage of principal you have paid down on your open non-mortgage installment loans.35%

FICO High Achievers have paid down an average of 40% of the principal on their non-mortgage installment loans.

[SouthJamaica]

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@atarvuzdar wrote:

Hoping someone can help. I've searched the site front and back and can't seem to find anything about the different thresholds for utilization (both overall and individual CC) and AAoA.

Apologies for asking a question which has probably been asked a million times. Anyone have any info on this or could point me to where that info may be?

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Although the conventional wisdom on overall utilization is that it doesn't affect your score adversely so long as it's 9% or less, I have not found that to be the case. I find that as my revolving utilization moves around from below 1% to more than 4%, my FICO 8 score moves with it. I don't know what a "breakpoint" or "threshold" would be in that region, because I find it to be quite fluid.

On individual card utilization I have found 30% to be a real breakpoint in FICO 8. If I go even 1 percentage point over 30 I get smacked.