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question about high credit lines excluded from FICO8 scoring

Birdman7
Super Contributor

Re: question about high credit lines excluded from FICO8 scoring


@SouthJamaica wrote:

@Birdman7 wrote:

@SouthJamaica wrote:

Today I got buried, losing 7 points in both EX FICO 2 and FICO 8,  when one of my large limit (30k) credit union accounts went from under 50% to over 50%.  The reason codes yesterday and today were identical in both scoring metrics. And the experian.com site listed the correct number of "accounts with balances", excluding none of my credit union accounts and none of my larger limit accounts.

 

The theories which some of you espouse, that credit union accounts are disregarded for some purposes, and that larger limit accounts are disregarded for some purposes, are simply theories, and for me they do not hold water.

 

 


@SouthJamaica maybe you misunderstand? The high credit limit cutoff does not exclude an account from revolving utilization nor number of accounts with a balance. So, of course it would show up in your utilization and number of accounts with a balance!

 

It excludes them from revolving balances, which are what used to trigger the AZ loss. Now if you would like to prove to yourself that it's not a theory, really all you have to do is go back and read the old thread where you got the no revolving activity code when you had No balances on cards with credit limits under the cut off for EX2. 

The fact that you will get an AZ loss when you have no balance on a card below the cut off for EX2, and the negative reason code shift is explicit. So are the plethora of data points proving it. 

 

But we can agree to disagree my friend. 


Yes I did misunderstand what you were saying.


@SouthJamaica(I reserve the right to revise my theories based on new information or data.)

 

But, I think we have established as fact, I cautiously say, that these cutoff's do exist and exclude accounts from "revolving activity."

 

My theory is that the "revolving activity" metric is determined solely by revolving balances and that HELOCS and other revolvers above the cutoff are excluded from revolving balances.

 

Who knows, they could be excluded from the number of accounts with a balance metric? I express no opinion either way on that really now that I think about it and solicit the Community's opinion on that.

 

Apparently they're not excluded from utilization if you had no other changes on your profile? I had initially thought they were hid from utilization as well. But the main purpose of knowing this is to avoid the AZ loss on mortgage scores. 


Back to fact: if the accounts above the cutoff are the only revolver(s) with a balance, you get the AZ loss, which supports my theory.

 

@tacpoly can you determine whether the utilization on your primary cards affected any mortgage scores? There's no doubt that you have to place a small balance on your AU to avoid the AZ point loss, but now we're trying to determine whether the accounts are also excluded from utilization as well as Revolving activity/balances. TIA. 

-Our Community’s updated scoring wisdom: Link to Scoring Primer.
-For Negative Reason Codes see: CassieCard’s Score Factors thread.
-ccquest’s workbook to calculate metrics for you: Link to Workbook.

Correct Ag.Util. under 5% all times. (Oldest/avg varies. Estimates above.)
Real world mortgage maxes are: EQ5-818, TU4-839, EX2-844.

RIP:

(Everything said is JMHO and is not endorsed by FICO or MF. I have no affiliation with either, just a grateful member.)
Message 31 of 79
SouthJamaica
Super Contributor

Re: question about high credit lines excluded from FICO8 scoring


@Birdman7 wrote:

@SouthJamaica wrote:

@Birdman7 wrote:

@SouthJamaica wrote:

Today I got buried, losing 7 points in both EX FICO 2 and FICO 8,  when one of my large limit (30k) credit union accounts went from under 50% to over 50%.  The reason codes yesterday and today were identical in both scoring metrics. And the experian.com site listed the correct number of "accounts with balances", excluding none of my credit union accounts and none of my larger limit accounts.

 

The theories which some of you espouse, that credit union accounts are disregarded for some purposes, and that larger limit accounts are disregarded for some purposes, are simply theories, and for me they do not hold water.

 

 


@SouthJamaica maybe you misunderstand? The high credit limit cutoff does not exclude an account from revolving utilization nor number of accounts with a balance. So, of course it would show up in your utilization and number of accounts with a balance!

 

It excludes them from revolving balances, which are what used to trigger the AZ loss. Now if you would like to prove to yourself that it's not a theory, really all you have to do is go back and read the old thread where you got the no revolving activity code when you had No balances on cards with credit limits under the cut off for EX2. 

The fact that you will get an AZ loss when you have no balance on a card below the cut off for EX2, and the negative reason code shift is explicit. So are the plethora of data points proving it. 

 

But we can agree to disagree my friend. 


Yes I did misunderstand what you were saying.


@SouthJamaica(I reserve the right to revise my theories based on new information or data.)

 

But, I think we have established as fact, I cautiously say, that these cutoff's do exist and exclude accounts from "revolving activity."

 

My theory is that the "revolving activity" metric is determined solely by revolving balances and that HELOCS and other revolvers above the cutoff are excluded from revolving balances.

 

Who knows, they could be excluded from the number of accounts with a balance metric? I express no opinion either way on that really now that I think about it and solicit the Community's opinion on that.

 

Apparently they're not excluded from utilization if you had no other changes on your profile? I had initially thought they were hid from utilization as well. But the main purpose of knowing this is to avoid the AZ loss on mortgage scores. 


Back to fact: if the accounts above the cutoff are the only revolver(s) with a balance, you get the AZ loss, which supports my theory.

 

@tacpoly can you determine whether the utilization on your primary cards affected any mortgage scores? There's no doubt that you have to place a small balance on your AU to avoid the AZ point loss, but now we're trying to determine whether the accounts are also excluded from utilization as well as Revolving activity/balances. TIA. 


All I can say is that I firmly believe that all of my open revolving accounts, including both larger credit limit accounts, and my credit union accounts, are counted for purposes of number of accounts with balances, and for determining percentage utilization, in both EX FICO 8 and EX FICO 2, which are the scores I monitor daily.

 

I have no firm opinion on whether they are counted for purposes of assessing the all zero penalty, because it's been too long since I've been in that neighborhood.

 

 

 

 

Message 32 of 79
Birdman7
Super Contributor

Re: question about high credit lines excluded from FICO8 scoring


@SouthJamaica wrote:

@Birdman7 wrote:

@SouthJamaica wrote:

@Birdman7 wrote:

@SouthJamaica wrote:

Today I got buried, losing 7 points in both EX FICO 2 and FICO 8,  when one of my large limit (30k) credit union accounts went from under 50% to over 50%.  The reason codes yesterday and today were identical in both scoring metrics. And the experian.com site listed the correct number of "accounts with balances", excluding none of my credit union accounts and none of my larger limit accounts.

 

The theories which some of you espouse, that credit union accounts are disregarded for some purposes, and that larger limit accounts are disregarded for some purposes, are simply theories, and for me they do not hold water.

 

 


@SouthJamaica maybe you misunderstand? The high credit limit cutoff does not exclude an account from revolving utilization nor number of accounts with a balance. So, of course it would show up in your utilization and number of accounts with a balance!

 

It excludes them from revolving balances, which are what used to trigger the AZ loss. Now if you would like to prove to yourself that it's not a theory, really all you have to do is go back and read the old thread where you got the no revolving activity code when you had No balances on cards with credit limits under the cut off for EX2. 

The fact that you will get an AZ loss when you have no balance on a card below the cut off for EX2, and the negative reason code shift is explicit. So are the plethora of data points proving it. 

 

But we can agree to disagree my friend. 


Yes I did misunderstand what you were saying.


@SouthJamaica(I reserve the right to revise my theories based on new information or data.)

 

But, I think we have established as fact, I cautiously say, that these cutoff's do exist and exclude accounts from "revolving activity."

 

My theory is that the "revolving activity" metric is determined solely by revolving balances and that HELOCS and other revolvers above the cutoff are excluded from revolving balances.

 

Who knows, they could be excluded from the number of accounts with a balance metric? I express no opinion either way on that really now that I think about it and solicit the Community's opinion on that.

 

Apparently they're not excluded from utilization if you had no other changes on your profile? I had initially thought they were hid from utilization as well. But the main purpose of knowing this is to avoid the AZ loss on mortgage scores. 


Back to fact: if the accounts above the cutoff are the only revolver(s) with a balance, you get the AZ loss, which supports my theory.

 

@tacpoly can you determine whether the utilization on your primary cards affected any mortgage scores? There's no doubt that you have to place a small balance on your AU to avoid the AZ point loss, but now we're trying to determine whether the accounts are also excluded from utilization as well as Revolving activity/balances. TIA. 


All I can say is that I firmly believe that all of my open revolving accounts, including both larger credit limit accounts, and my credit union accounts, are counted for purposes of number of accounts with balances, and for determining percentage utilization, in both EX FICO 8 and EX FICO 2, which are the scores I monitor daily.

 

I have no firm opinion on whether they are counted for purposes of assessing the all zero penalty, because it's been too long since I've been in that neighborhood.

 

 

 

 


@SouthJamaica I can go for that. But to refresh your recollection if you will re-read the thread I posted linked above, you will recall when you did not have a balance on any cards under the threshold, you received the penalty and the negative reason code for no revolving activity. 


while you were not at all zero, you were for purposes of the EX2 algorithm because you had no cards under the credit limit with a balance.

-Our Community’s updated scoring wisdom: Link to Scoring Primer.
-For Negative Reason Codes see: CassieCard’s Score Factors thread.
-ccquest’s workbook to calculate metrics for you: Link to Workbook.

Correct Ag.Util. under 5% all times. (Oldest/avg varies. Estimates above.)
Real world mortgage maxes are: EQ5-818, TU4-839, EX2-844.

RIP:

(Everything said is JMHO and is not endorsed by FICO or MF. I have no affiliation with either, just a grateful member.)
Message 33 of 79
SouthJamaica
Super Contributor

Re: question about high credit lines excluded from FICO8 scoring


@Birdman7 wrote:

@SouthJamaica wrote:

@Birdman7 wrote:

@SouthJamaica wrote:

@Birdman7 wrote:

@SouthJamaica wrote:

Today I got buried, losing 7 points in both EX FICO 2 and FICO 8,  when one of my large limit (30k) credit union accounts went from under 50% to over 50%.  The reason codes yesterday and today were identical in both scoring metrics. And the experian.com site listed the correct number of "accounts with balances", excluding none of my credit union accounts and none of my larger limit accounts.

 

The theories which some of you espouse, that credit union accounts are disregarded for some purposes, and that larger limit accounts are disregarded for some purposes, are simply theories, and for me they do not hold water.

 

 


@SouthJamaica maybe you misunderstand? The high credit limit cutoff does not exclude an account from revolving utilization nor number of accounts with a balance. So, of course it would show up in your utilization and number of accounts with a balance!

 

It excludes them from revolving balances, which are what used to trigger the AZ loss. Now if you would like to prove to yourself that it's not a theory, really all you have to do is go back and read the old thread where you got the no revolving activity code when you had No balances on cards with credit limits under the cut off for EX2. 

The fact that you will get an AZ loss when you have no balance on a card below the cut off for EX2, and the negative reason code shift is explicit. So are the plethora of data points proving it. 

 

But we can agree to disagree my friend. 


Yes I did misunderstand what you were saying.


@SouthJamaica(I reserve the right to revise my theories based on new information or data.)

 

But, I think we have established as fact, I cautiously say, that these cutoff's do exist and exclude accounts from "revolving activity."

 

My theory is that the "revolving activity" metric is determined solely by revolving balances and that HELOCS and other revolvers above the cutoff are excluded from revolving balances.

 

Who knows, they could be excluded from the number of accounts with a balance metric? I express no opinion either way on that really now that I think about it and solicit the Community's opinion on that.

 

Apparently they're not excluded from utilization if you had no other changes on your profile? I had initially thought they were hid from utilization as well. But the main purpose of knowing this is to avoid the AZ loss on mortgage scores. 


Back to fact: if the accounts above the cutoff are the only revolver(s) with a balance, you get the AZ loss, which supports my theory.

 

@tacpoly can you determine whether the utilization on your primary cards affected any mortgage scores? There's no doubt that you have to place a small balance on your AU to avoid the AZ point loss, but now we're trying to determine whether the accounts are also excluded from utilization as well as Revolving activity/balances. TIA. 


All I can say is that I firmly believe that all of my open revolving accounts, including both larger credit limit accounts, and my credit union accounts, are counted for purposes of number of accounts with balances, and for determining percentage utilization, in both EX FICO 8 and EX FICO 2, which are the scores I monitor daily.

 

I have no firm opinion on whether they are counted for purposes of assessing the all zero penalty, because it's been too long since I've been in that neighborhood.

 

 

 

 


@SouthJamaica I can go for that. But to refresh your recollection if you will re-read the thread I posted linked above, you will recall when you did not have a balance on any cards under the threshold, you received the penalty and the negative reason code for no revolving activity. 


while you were not at all zero, you were for purposes of the EX2 algorithm because you had no cards under the credit limit with a balance.


I too reserve the right to change, learn, evolve, and grow.  I used to repeat a lot of things I'd heard in this forum which my experiences later disproved.I don't say them any more.

 

If I find data points which may tend to support or tend to contradict theories that have been proposed, I may point them out.

 

I frequently find myself thinking something might possibly be true, and then later learning that it's not true, or may not be true.

 

So as long as we are not privy to the mysteries of what goes into the FICO algorithms, we are all in a speculative guessing game.  And should be wary of passing along as gospel what are merely hypotheses.

Message 34 of 79
Birdman7
Super Contributor

Re: question about high credit lines excluded from FICO8 scoring

@SouthJamaica but you've got to admit we have came a long way this year. 

-Our Community’s updated scoring wisdom: Link to Scoring Primer.
-For Negative Reason Codes see: CassieCard’s Score Factors thread.
-ccquest’s workbook to calculate metrics for you: Link to Workbook.

Correct Ag.Util. under 5% all times. (Oldest/avg varies. Estimates above.)
Real world mortgage maxes are: EQ5-818, TU4-839, EX2-844.

RIP:

(Everything said is JMHO and is not endorsed by FICO or MF. I have no affiliation with either, just a grateful member.)
Message 35 of 79
Thomas_Thumb
Senior Contributor

Re: question about high credit lines excluded from FICO8 scoring

Here is what I know regarding revolving CLs, card types and treatment on the various Fico models.

1) AU cards are not subject to anti-abuse algorithms on the earlier Fico 98 and Fico 04 models. As a result, they will be included in individual and aggregate credit utilization calculations unless they are above a certain limit. Additionally, they will be included in card count with balances - again unless CL is above a limit.

1a) My $34,900 AU card does not count on Fico 98 (Experian score 2) but does count on Fico 04 (Experian score 3), (TransUnion score 4) and (Equifax score 5).

* On multiple occassions my EX score 2 has actually gone up slightly when my EX score 3, TU score 4 and EQ score 5 results dropped substantially due to a high monthly balance reporting on the AU card. [side note: my Fico 8 scores were unaffected - AU card not counting due to anti abuse algorithm)

* On one occassion when only my AU and AMEX charge reported balances, my EQ/TU/EX Fico 8 scores dropped as did my EX Fico score 2. My EX Fico score 3, TU Fico score 4 and EQ Fico score 5 did not drop. Why? I experienced the "zero revolvers with a balance penalty".

 

The AU card CL of $34.9k is above the Fico 98 model limit for factoring into utilization and card count. The AMEX charge card is not a revolver. Thus, the zero revolving account activity penalty even though 2 cards had balances.

 

I have multiple data points that show the older Fico 98 model ignores a revolving credit card that has a CL of $34.9k. However, that same card is "seen" and included in Fico 04 revolving account metrics (EX score 3, TU score 4 and EQ score 5). I also have a Discover card with a $31k CL. Best I can tell is that account is considered in all Fico model metrics (Fico 98, Fico 04, Fico 8 and Fico 9)

 

In conclusion, Fico 98 does not consider revolving accounts with credit limits of $34.9 or higher in utilization and revolving account with balance metrics. Best I can tell the cutoff should fall between $31k and $34.9k.

 

Although I have never had a PLOC or HELOC, there have been a multitude of posts and threads speaking to Line of credit amount limits above which the account no longer is viewed as a revolver. These threads are generally pre 2014 when the focus was primarily Fico mortgage scores (Fico 98 and Fico 04). The limit was somewhere in the $20k to $50k range.

 

 

Fico 9: .......EQ 850 TU 850 EX 850
Fico 8: .......EQ 850 TU 850 EX 850
Fico 4 .....:. EQ 809 TU 823 EX 830 EX Fico 98: 842
Fico 8 BC:. EQ 892 TU 900 EX 900
Fico 8 AU:. EQ 887 TU 897 EX 899
Fico 4 BC:. EQ 826 TU 858, EX Fico 98 BC: 870
Fico 4 AU:. EQ 831 TU 872, EX Fico 98 AU: 861
VS 3.0:...... EQ 835 TU 835 EX 835
CBIS: ........EQ LN Auto 940 EQ LN Home 870 TU Auto 902 TU Home 950
Message 36 of 79
Birdman7
Super Contributor

Re: question about high credit lines excluded from FICO8 scoring


@Thomas_Thumb wrote:

Here is what I know regarding revolving CLs, card types and treatment on the various Fico models.

1) AU cards are not subject to anti-abuse algorithms on the earlier Fico 98 and Fico 04 models. As a result, they will be included in individual and aggregate credit utilization calculations unless they are above a certain limit. Additionally, they will be included in card count with balances - again unless CL is above a limit.

1a) My $34,900 AU card does not count on Fico 98 (Experian score 2) but does count on Fico 04 (Experian score 3), (TransUnion score 4) and (Equifax score 5).

* On multiple occassions my EX score 2 has actually gone up slightly when my EX score 3, TU score 4 and EQ score 5 results dropped substantially due to a high monthly balance reporting on the AU card. [side note: my Fico 8 scores were unaffected - AU card not counting due to anti abuse algorithm)

* On one occassion when only my AU and AMEX charge reported balances, my EQ/TU/EX Fico 8 scores dropped as did my EX Fico score 2. My EX Fico score 3, TU Fico score 4 and EQ Fico score 5 did not drop. Why? I experienced the "zero revolvers with a balance penalty".

 

The AU card CL of $34.9k is above the Fico 98 model limit for factoring into utilization and card count. The AMEX charge card is not a revolver. Thus, the zero revolving account activity penalty even though 2 cards had balances.

 

I have multiple data points that show the older Fico 98 model ignores a revolving credit card that has a CL of $34.9k. However, that same card is "seen" and included in Fico 04 revolving account metrics (EX score 3, TU score 4 and EQ score 5). I also have a Discover card with a $31k CL. Best I can tell is that account is considered in all Fico model metrics (Fico 98, Fico 04, Fico 8 and Fico 9)

 

In conclusion, Fico 98 does not consider revolving accounts with credit limits of $34.9 or higher in utilization and revolving account with balance metrics. Best I can tell the cutoff should fall between $31k and $34.9k.

 

Although I have never had a PLOC or HELOC, there have been a multitude of posts and threads speaking to Line of credit amount limits above which the account no longer is viewed as a revolver. These threads are generally pre 2014 when the focus was primarily Fico mortgage scores (Fico 98 and Fico 04). The limit was somewhere in the $20k to $50k range.

 

 


@Thomas_Thumb thank you for sharing your knowledge and wisdom. We are grateful. Might I ask a couple questions? 

first, I was going from previous knowledge and posts in the forum that stated the cutoff for EX2 was between $26,000 and $29,000. We have just verified a $28,000 card was not excluded. That is great to know your $31,000 Discover is not excluded by EX2. So that means the cut off is in the range you stated thank you for correcting us.

 

Second, you spoke of exclusion from utilization and number of accounts with a balance. It seems the algorithm triggers the no revolving activity code when revolving balances are $0, not when utilization is 0%. For instance, my utilization can be 0%, but I still have revolving activity. That leads me to believe it's based on balances, not utilization.


So my question is, are you sure that it's also excluded from the revolving utilization and number of accounts with a balance metrics? Because it appears to only be excluded from the revolving balances metric.


For instance, if one only has a balance on an excluded card, they receive the no revolving activity code and if they also had the high credit usage code indicating utilization is high. No revolving activity, but high utilization. Seems to indicate it's excluded from balances but not utilization? Thoughts?

-Our Community’s updated scoring wisdom: Link to Scoring Primer.
-For Negative Reason Codes see: CassieCard’s Score Factors thread.
-ccquest’s workbook to calculate metrics for you: Link to Workbook.

Correct Ag.Util. under 5% all times. (Oldest/avg varies. Estimates above.)
Real world mortgage maxes are: EQ5-818, TU4-839, EX2-844.

RIP:

(Everything said is JMHO and is not endorsed by FICO or MF. I have no affiliation with either, just a grateful member.)
Message 37 of 79
Birdman7
Super Contributor

Re: question about high credit lines excluded from FICO8 scoring

It was my understanding, based on the below thread and others that the purpose of the cut off was actually to exclude HELOCs and that the cut off was between $26,000 and $29,000:

 

https://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/quot-High-credit-usage-quot-vs-quot-High...

-Our Community’s updated scoring wisdom: Link to Scoring Primer.
-For Negative Reason Codes see: CassieCard’s Score Factors thread.
-ccquest’s workbook to calculate metrics for you: Link to Workbook.

Correct Ag.Util. under 5% all times. (Oldest/avg varies. Estimates above.)
Real world mortgage maxes are: EQ5-818, TU4-839, EX2-844.

RIP:

(Everything said is JMHO and is not endorsed by FICO or MF. I have no affiliation with either, just a grateful member.)
Message 38 of 79
Thomas_Thumb
Senior Contributor

Re: question about high credit lines excluded from FICO8 scoring

Zero doubt. I reported on the lack of revolving activity penalty with the AMEX and AU card reporting sizeable balances in 2016. I pasted a screen print with the reason code. This from a Fico 3B report.

 

A month or so ago I presented a table showing a substantial drop in EX Fico score 3, TU Fico score 4 and EQ Fico score 5 when the AU card reported a $5700 balance. In contrast my EX score 2 (Fico 98) and it's industry enhanced counterparts went up.

 

I must conclude the AU card is not being considered as a revolving account in Fico 98 for utilization or revolving account activity. Now my AMEX did cause a notable score drop on EX Fico score 2 only when it reported a B/HB of 100% a couple times. So, it clearly is looked at on an individual utilization basis in Fico 98 but, not Fico 04 or more recent  Fico models. The charge card is not considered in the revolving account activity metric for any Fico algorithm.

 

Point of clarification: The AMEX charge card is obviously an account and as such is included in # of accounts with balances when it has a balance. However, because it is an open account (as opposed to a revolver), it does not count toward "recent revolving account activity".

Fico 9: .......EQ 850 TU 850 EX 850
Fico 8: .......EQ 850 TU 850 EX 850
Fico 4 .....:. EQ 809 TU 823 EX 830 EX Fico 98: 842
Fico 8 BC:. EQ 892 TU 900 EX 900
Fico 8 AU:. EQ 887 TU 897 EX 899
Fico 4 BC:. EQ 826 TU 858, EX Fico 98 BC: 870
Fico 4 AU:. EQ 831 TU 872, EX Fico 98 AU: 861
VS 3.0:...... EQ 835 TU 835 EX 835
CBIS: ........EQ LN Auto 940 EQ LN Home 870 TU Auto 902 TU Home 950
Message 39 of 79
Birdman7
Super Contributor

Re: question about high credit lines excluded from FICO8 scoring

@Thomas_Thumb thank you again for sharing your wisdom and knowledge. So our error came from relying on the previous thread that stated the cut off was between $26,000 and $29,000, when the cut off is actually between $31,000-$34,900.

 

so in sum, the cut off for EX2 is over $31,000 and that explains why @SouthJamaica 's EX2 went down, because the credit limit is below the cutoff as his CL was $30,000. Excluded accounts are from both balances and utilization. Are they also excluded from number of accounts with a balance?

 

yes I do recall the table. 

-Our Community’s updated scoring wisdom: Link to Scoring Primer.
-For Negative Reason Codes see: CassieCard’s Score Factors thread.
-ccquest’s workbook to calculate metrics for you: Link to Workbook.

Correct Ag.Util. under 5% all times. (Oldest/avg varies. Estimates above.)
Real world mortgage maxes are: EQ5-818, TU4-839, EX2-844.

RIP:

(Everything said is JMHO and is not endorsed by FICO or MF. I have no affiliation with either, just a grateful member.)
Message 40 of 79
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