What FICO 8 likes the best

[vanillabean]

I have been entertained this year so far by various credit scenarios such as 1) a credit card balance with a mortgage and with a heloc balance, 2) a credit card balance with a mortgage, 3) a heloc with no card balances, 4) a ~40k card with no other card balances and with no installment loans, 5) no reported debt of any kind, 6) a credit card balance with no installment loans, 7) looking forward to revisiting a credit card balance or two with a mortgage.

My unsurprising conclusion is that a low number of credit card balances along with at least one installment loan is what FICO 8 likes the best. Combine that with no lates and no new credit, and you’re good.

[Anonymous]

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@vanillabean wrote:

I have been entertained this year so far by various credit scenarios such as 1) a credit card balance with a mortgage and with a heloc balance, 2) a credit card balance with a mortgage, 3) a heloc with no card balances, 4) a ~40k card with no other card balances and with no installment loans, 5) no reported debt of any kind, 6) a credit card balance with no installment loans, 7) looking forward to revisiting a credit card balance or two with a mortgage.

My unsurprising conclusion is that a low number of credit card balances along with at least one installment loan is what FICO 8 likes the best. Combine that with no lates and no new credit, and you’re good.

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I would add to that not just a low number of credit card balances (number of cards with balances), but low utilization as well.  Also I'd say that FICO scoring is kinder to thicker/older files.

[Thomas_Thumb]

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@vanillabean wrote:

I have been entertained this year so far by various credit scenarios such as 1) a credit card balance with a mortgage and with a heloc balance, 2) a credit card balance with a mortgage, 3) a heloc with no card balances, 4) a ~40k card with no other card balances and with no installment loans, 5) no reported debt of any kind, 6) a credit card balance with no installment loans, 7) looking forward to revisiting a credit card balance or two with a mortgage.

My unsurprising conclusion is that a low number of credit card balances along with at least one installment loan is what FICO 8 likes the best. Combine that with no lates and no new credit, and you’re good.

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My experience is utilization rules Fico 8 both on an individual card basis and in aggregate.

Frankly, I can report balances on all my accounts without any impact on Fico 8. Now if aggregate utilization were to cross any threshold a swift and harsh penalty would be extracted. I do have an open installment loan which likely helps my Fico 8 although I have not seen an impact going from over 50% balance to loan to under 30% balance to loan.

[Anonymous]

I agree with what was said above regarding number of cards with balances under FICO 08, as I do not see a penalty in allowing more than 50% of my cards to report small balances so long as I don't cross any thresholds.

[vanillabean]

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@Thomas_Thumb wrote:My experience is utilization rules Fico 8 both on an individual card basis and in aggregate.

Frankly, I can report balances on all my accounts without any impact on Fico 8. Now if aggregate utilization were to cross any threshold a swift and harsh penalty would be extracted. I do have an open installment loan which likely helps my Fico 8 although I have not seen an impact going from over 50% balance to loan to under 30% balance to loan.

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In your experience, which individual and overall utilization thresholds would you stay within to report balances on all your revolving accounts without any impact?

[Thomas_Thumb]

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@vanillabean wrote:

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@Thomas_Thumb wrote:My experience is utilization rules Fico 8 both on an individual card basis and in aggregate.

Frankly, I can report balances on all my accounts without any impact on Fico 8. Now if aggregate utilization were to cross any threshold a swift and harsh penalty would be extracted. I do have an open installment loan which likely helps my Fico 8 although I have not seen an impact going from over 50% balance to loan to under 30% balance to loan.

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 In your experience, which individual and overall utilization thresholds would you stay within to report balances on all your revolving accounts without any impact?

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My experience is aggregate revolving utilization is weighed much more heavily than individual card utilization (particularly at the same UT% threshold).

I always keep aggregate utilization under 9% (really under 6%) and recommend maintaining highest individual card utilization under 29%.

My profile rather insensitive to a high individual card utilization, so I just look at under 49% as a personal benchmark. However, for my highest limit cards, a utilization somewhere in the 30% to 49% range would push aggregate above 9%. So, those cards naturally must report lower utilizations to avoid unduly influencing aggregate.

[Anonymous]

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@Thomas_Thumb wrote:

My experience is aggregate revolving utilization is weighed much more heavily than individual card utilization (particularly at the same UT% threshold).

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Does your aggregate revolving utilization include store card CLs as well?  I assume so.

What's the worst FICO drop you've gotten based on aggregate or individual utilizations?

[Thomas_Thumb]

Yes, I have a real deal Best Buy store card - not cobranded. That's my only open store card and my lowest limit card at $7500. I let it report 51% UT one month back in 2Q 2014 and something like 75% a couple months later. No impact on Fico 8 score either time - card CL back then was $4000. My Fico 8 score has a "buffer" and has never dropped based on individual utilization including the above.

I did see aggregate utilization spike to about 9.5% once - 10/2016. My EQ and EX Classic Fico 8 stayed at 850 but, my TU Classic Fico 8 dropped to 845 (5 points). My TU Fico 8 bankcard enhanced dropped to an all time low of 873 (typical score is 899 or 900). Of course, # cards reporting could have also been an influencing factor on the TU Bankcard score. For comparison, EX Bankcard was at 899 on the same report. Best guess is TU is tweaked differently or it was looking at a different data set.

Other than perhaps Fico NextGen, Fico 98/Fico 04/Fico 8/Fico 9 do not differentiate among revolving credit card accounts. However, I do know my 1 month term AMEX NPSL charge card is treated differently.