cancel
Showing results for 
Search instead for 
Did you mean: 

question about high credit lines excluded from FICO8 scoring

Aim_High
Senior Contributor

Re: question about high credit lines excluded from FICO8 scoring


@tacpoly wrote:

@Aim_High wrote:

... Specifically, I've seen several approvals or limit consolidations in the range of $50K to $100K+ in the recent months.  I've considered doing some consolidation of limits and wanted to be knowledgable of the potential fallout from doing it.   ... I'm wondering if this is a strategy that could cause complications.  Even if I open or consolidate some cards into higher-limit accounts, should I purposefully keep open and active a certain portion of my cards at lower limits?  Is there one or more credit-limit triggers that impact utilization or FICO that I should be aware of?   


From what I understand from this thread (and feel free to correct me):

- Fico8 and Fico 9 considers all revolving primary cards, no matter the limit, when it comes to utilization and revolving account balances. AU and charge cards are not considered. 


- Fico 98 scoring considers only cards below a certain limit (currently narrowed to somewhere between 31K and 34.9K) when it comes to utilization and balance. 

- Fico mortgage scoring sees charge cards and revolving cards (primary and AU) up to a CL of $34.9 and maybe higher.  Although it seems to be insensitive to my $45K limit revolver. 

- All accounts count with regard to # of accounts with balances for all scoring models (is this right?)

 

So, it seems if you're not going to do anything that would require institutions to look at your mortgage scores, having all high limit cards probably won't hurt. If you want to be safe, keep 2 cards below $35K.  I've always had high limit cards (my first credit limits when I applied for cards after I turned 18 were all well above $50K).  Although I didn't know my scores until recently, I never had an issue getting a loan or credit cards (I did lower limits after identity theft and fraudulent charges). 


Thanks for the reply, @tacpoly! Smiley Happy  It sounds like you and @Birdman7 are on the same page with this scenario.






Total Length of Credit > 35 years; AoOA (Currently open accounts) > 27 years
AAoA > 7 years; AoYA less than 1 year (Aug 2020)
Credit Limits: Total > $573K. Average > $28K. Utilization 1%.
Total Inquiries (TU:3 ~ EQ:4 ~ EX:7); Scorable Inquiries (TU:1 ~ EQ:2 ~ EX:4)
New Accounts: 1/6 months; 4/12 months; 11/24 months (as of 01/11/21)
* Hover cursor over each card to see name & CL, or press & hold on mobile app.
** Gardening since 08/15/20. Garden Goal ACHIEVED!!: Gold Spade on 02/15/21
Message 51 of 79
Aim_High
Senior Contributor

Re: question about high credit lines excluded from FICO8 scoring


@Birdman7 wrote:

@Aim_High To be honest, all you need is one revolver with a credit limit of $31,000 or less to use as an AZEO card to avoid the

AZ loss on all 3 mortgage scores.

 

If you're extra paranoid have 2, but if you really got in a pinch, you could always request a CLD, you know if your only sub $50,000 account was a Sam's M/C and Synchrony pulled one of their specials. 😉

 

Really @tacpoly has a beautiful profile, everything is large except for the one AU that will now work perfectly to avoid the AZ loss on all three bureaus. As a matter of fact, have you posted a balance yet to see how high your scores jump @tacpoly ?

 

But seriously @Aim_High, it's great you're utilization is hid with big cards, your only issue is you need one low limit card just to show revolving activity, so you don't get the point loss from all zero.

 

So really, all you need is one revolver that is $31,000 or less CL, just one. As a matter fact, I recall you *%@&$#!£? about one lower CL you got somewhere at the end of your run somewhere, right? Well turn that frown upside down and make that you're AZEO card! You need one lower limit card, it serves it's AZEO purpose. Other than that, don't expend any more brain cells on it, lol😉


Thanks for the advice @Birdman7!   I just need to clarify a couple of points. 

 

I know the AZEO principle but IF I were to only have ONE card below $31K, would it need to be reporting or not reporting a monthly balance?  Reporting and paid-in-full?  I guess I was more concerned about overall utilization calculations if large limits were excluded.  If all cards over $35K for example, were excluded, then my apparent utilization across cards would show much higher if I reported a signficant balance on one or a handful of lower-limit cards.  So the idea would be to report only a SMALL balances on the lower-limit cards?  And those lower limits only affect the older scoring models (which are mainly used for mortgage scoring now)?   And for use of current FICO models used for credit and auto loans, the low-limit cards don't really do anything special for me, correct?

 

I don't need to do a CLD as I have a few cards that will probably never get above $25K.  They are (or at least were) at the lender caps for that card.  (AFBA/UMB, AOD FCU, and my local CU card.)    While I had considered closing any card below $25K and maybe even some AT $25K (such as my Capital One Quicksilver), I doubt I would want to take downsizing to that extreme.    At least if the 3% benefit isn't nerfed, I can't imagine closing the AOD and the AFBA/UMB has good rewards and is one of my oldest cards.  I also may shift limits on some of my BofA or Chase cards a little as I reallocate the higher limit cards with them, which could keep up to three other cards at lower limits (CR, CFU, CF.)   I had toyed with the idea of greatly streamlining my profile by closing all those secondary cards with BofA and Chase and consolidating at very high limits, but it was more of a passing thought.  I still appreciate the rewards and this discussion has reinforced that some lower limits may serve a purpose.  So keeping one or more cards open below $31K is probably not a problem.  I just wanted to make sure that having most cards at/above $35K would not cause issues.

 

Yeah, I griped at a couple of low approvals.  My two lowest were a second Discover card, a MILES card I was approved for in Nov 2019 with a whopping $1K limit even though I had a $50K limit card with them already! Smiley Sad   I just closed it instead of trying to grow it.  Instead, DW applied and got a more useful $9K limit and added me as AU.  (That card doesn't reflect in my profile.)  Plus, Navy FCU approved me for a Platinum Visa with a lower limit than I had hoped for on a first card, $10K.  It was at the end of many other applications and I was a new member, so probably why they were my most conservative approval besides that Discover.  I've since grown it to $22.5K and hope to grow it to $25K to $50K range.

 

Just to reiterate ... do cards that exceed $50K or $100K - or some other benchmark higher than $35K for older FICO models - ever exclude utilization in calculating later model FICO scores?  Are there any other profile disadvantages to having those high-limit cards dominate a profile?   I have seen $50K or $100K referenced vaguely several times on My FICO and didn't know what were the potential impacts.  Maybe the references were more regarding that $31-$35K mark and the exact figure was misquoted?






Total Length of Credit > 35 years; AoOA (Currently open accounts) > 27 years
AAoA > 7 years; AoYA less than 1 year (Aug 2020)
Credit Limits: Total > $573K. Average > $28K. Utilization 1%.
Total Inquiries (TU:3 ~ EQ:4 ~ EX:7); Scorable Inquiries (TU:1 ~ EQ:2 ~ EX:4)
New Accounts: 1/6 months; 4/12 months; 11/24 months (as of 01/11/21)
* Hover cursor over each card to see name & CL, or press & hold on mobile app.
** Gardening since 08/15/20. Garden Goal ACHIEVED!!: Gold Spade on 02/15/21
Message 52 of 79
Birdman7
Super Contributor

Re: question about high credit lines excluded from FICO8 scoring


@Aim_High wrote:

@Birdman7 wrote:

@Aim_High To be honest, all you need is one revolver with a credit limit of $31,000 or less to use as an AZEO card to avoid the

AZ loss on all 3 mortgage scores.

 

If you're extra paranoid have 2, but if you really got in a pinch, you could always request a CLD, you know if your only sub $50,000 account was a Sam's M/C and Synchrony pulled one of their specials. 😉

 

Really @tacpoly has a beautiful profile, everything is large except for the one AU that will now work perfectly to avoid the AZ loss on all three bureaus. As a matter of fact, have you posted a balance yet to see how high your scores jump @tacpoly ?

 

But seriously @Aim_High, it's great you're utilization is hid with big cards, your only issue is you need one low limit card just to show revolving activity, so you don't get the point loss from all zero.

 

So really, all you need is one revolver that is $31,000 or less CL, just one. As a matter fact, I recall you *%@&$#!£? about one lower CL you got somewhere at the end of your run somewhere, right? Well turn that frown upside down and make that you're AZEO card! You need one lower limit card, it serves it's AZEO purpose. Other than that, don't expend any more brain cells on it, lol😉


Thanks for the advice @Birdman7!   I just need to clarify a couple of points. 

 

I know the AZEO principle but IF I were to only have ONE card below $31K, would it need to be reporting or not reporting a monthly balance?  Reporting and paid-in-full?  I guess I was more concerned about overall utilization calculations if large limits were excluded.  If all cards over $35K for example, were excluded, then my apparent utilization across cards would show much higher if I reported a signficant balance on one or a handful of lower-limit cards.  So the idea would be to report only a SMALL balances on the lower-limit cards?  And those lower limits only affect the older scoring models (which are mainly used for mortgage scoring now)?   And for use of current FICO models used for credit and auto loans, the low-limit cards don't really do anything special for me, correct?

 

I don't need to do a CLD as I have a few cards that will probably never get above $25K.  They are (or at least were) at the lender caps for that card.  (AFBA/UMB, AOD FCU, and my local CU card.)    While I had considered closing any card below $25K and maybe even some AT $25K (such as my Capital One Quicksilver), I doubt I would want to take downsizing to that extreme.    At least if the 3% benefit isn't nerfed, I can't imagine closing the AOD and the AFBA/UMB has good rewards and is one of my oldest cards.  I also may shift limits on some of my BofA or Chase cards a little as I reallocate the higher limit cards with them, which could keep up to three other cards at lower limits (CR, CFU, CF.)   I had toyed with the idea of greatly streamlining my profile by closing all those secondary cards with BofA and Chase and consolidating at very high limits, but it was more of a passing thought.  I still appreciate the rewards and this discussion has reinforced that some lower limits may serve a purpose.  So keeping one or more cards open below $31K is probably not a problem.  I just wanted to make sure that having most cards at/above $35K would not cause issues.

 

Yeah, I griped at a couple of low approvals.  My two lowest were a second Discover card, a MILES card I was approved for in Nov 2019 with a whopping $1K limit even though I had a $50K limit card with them already! Smiley Sad   I just closed it instead of trying to grow it.  Instead, DW applied and got a more useful $9K limit and added me as AU.  (That card doesn't reflect in my profile.)  Plus, Navy FCU approved me for a Platinum Visa with a lower limit than I had hoped for on a first card, $10K.  It was at the end of many other applications and I was a new member, so probably why they were my most conservative approval besides that Discover.  I've since grown it to $22.5K and hope to grow it to $25K to $50K range.

 

Just to reiterate ... do cards that exceed $50K or $100K - or some other benchmark higher than $35K for older FICO models - ever exclude utilization in calculating later model FICO scores?  Are there any other profile disadvantages to having those high-limit cards dominate a profile?   I have seen $50K or $100K referenced vaguely several times on My FICO and didn't know what were the potential impacts.  Maybe the references were more regarding that $31-$35K mark and the exact figure was misquoted?


@Aim_High trust me, all you need is one card that is $31,000 CL or lower. Yes, that is your AZEO card, that is the card that you want to post a balance between $5 and $100. You don't have to worry about overall utilization because you're only going to post a small balance on the low CL card, as referenced.

 

This is just to save you on the mortgage scores, the new scores take everything into account, I got a jump in the shower. I'll hit another post.

-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 53 of 79
SouthJamaica
Super Contributor

Re: question about high credit lines excluded from FICO8 scoring


@Birdman7 wrote:

@Aim_High wrote:

@Birdman7 wrote:

@Aim_High To be honest, all you need is one revolver with a credit limit of $31,000 or less to use as an AZEO card to avoid the

AZ loss on all 3 mortgage scores.

 

If you're extra paranoid have 2, but if you really got in a pinch, you could always request a CLD, you know if your only sub $50,000 account was a Sam's M/C and Synchrony pulled one of their specials. 😉

 

Really @tacpoly has a beautiful profile, everything is large except for the one AU that will now work perfectly to avoid the AZ loss on all three bureaus. As a matter of fact, have you posted a balance yet to see how high your scores jump @tacpoly ?

 

But seriously @Aim_High, it's great you're utilization is hid with big cards, your only issue is you need one low limit card just to show revolving activity, so you don't get the point loss from all zero.

 

So really, all you need is one revolver that is $31,000 or less CL, just one. As a matter fact, I recall you *%@&$#!£? about one lower CL you got somewhere at the end of your run somewhere, right? Well turn that frown upside down and make that you're AZEO card! You need one lower limit card, it serves it's AZEO purpose. Other than that, don't expend any more brain cells on it, lol😉


Thanks for the advice @Birdman7!   I just need to clarify a couple of points. 

 

I know the AZEO principle but IF I were to only have ONE card below $31K, would it need to be reporting or not reporting a monthly balance?  Reporting and paid-in-full?  I guess I was more concerned about overall utilization calculations if large limits were excluded.  If all cards over $35K for example, were excluded, then my apparent utilization across cards would show much higher if I reported a signficant balance on one or a handful of lower-limit cards.  So the idea would be to report only a SMALL balances on the lower-limit cards?  And those lower limits only affect the older scoring models (which are mainly used for mortgage scoring now)?   And for use of current FICO models used for credit and auto loans, the low-limit cards don't really do anything special for me, correct?

 

I don't need to do a CLD as I have a few cards that will probably never get above $25K.  They are (or at least were) at the lender caps for that card.  (AFBA/UMB, AOD FCU, and my local CU card.)    While I had considered closing any card below $25K and maybe even some AT $25K (such as my Capital One Quicksilver), I doubt I would want to take downsizing to that extreme.    At least if the 3% benefit isn't nerfed, I can't imagine closing the AOD and the AFBA/UMB has good rewards and is one of my oldest cards.  I also may shift limits on some of my BofA or Chase cards a little as I reallocate the higher limit cards with them, which could keep up to three other cards at lower limits (CR, CFU, CF.)   I had toyed with the idea of greatly streamlining my profile by closing all those secondary cards with BofA and Chase and consolidating at very high limits, but it was more of a passing thought.  I still appreciate the rewards and this discussion has reinforced that some lower limits may serve a purpose.  So keeping one or more cards open below $31K is probably not a problem.  I just wanted to make sure that having most cards at/above $35K would not cause issues.

 

Yeah, I griped at a couple of low approvals.  My two lowest were a second Discover card, a MILES card I was approved for in Nov 2019 with a whopping $1K limit even though I had a $50K limit card with them already! Smiley Sad   I just closed it instead of trying to grow it.  Instead, DW applied and got a more useful $9K limit and added me as AU.  (That card doesn't reflect in my profile.)  Plus, Navy FCU approved me for a Platinum Visa with a lower limit than I had hoped for on a first card, $10K.  It was at the end of many other applications and I was a new member, so probably why they were my most conservative approval besides that Discover.  I've since grown it to $22.5K and hope to grow it to $25K to $50K range.

 

Just to reiterate ... do cards that exceed $50K or $100K - or some other benchmark higher than $35K for older FICO models - ever exclude utilization in calculating later model FICO scores?  Are there any other profile disadvantages to having those high-limit cards dominate a profile?   I have seen $50K or $100K referenced vaguely several times on My FICO and didn't know what were the potential impacts.  Maybe the references were more regarding that $31-$35K mark and the exact figure was misquoted?


@Aim_High trust me, all you need is one card that is $31,000 CL or lower. Yes, that is your AZEO card, that is the card that you want to post a balance between $5 and $100. You don't have to worry about overall utilization because you're only going to post a small balance on the low CL card, as referenced.

 

This is just to save you on the mortgage scores, the new scores take everything into account, I got a jump in the shower. I'll hit another post.


TMI

Message 54 of 79
Birdman7
Super Contributor

Re: question about high credit lines excluded from FICO8 scoring


@Aim_High wrote:

@Birdman7 wrote:

@Aim_High To be honest, all you need is one revolver with a credit limit of $31,000 or less to use as an AZEO card to avoid the

AZ loss on all 3 mortgage scores.

 

If you're extra paranoid have 2, but if you really got in a pinch, you could always request a CLD, you know if your only sub $50,000 account was a Sam's M/C and Synchrony pulled one of their specials. 😉

 

Really @tacpoly has a beautiful profile, everything is large except for the one AU that will now work perfectly to avoid the AZ loss on all three bureaus. As a matter of fact, have you posted a balance yet to see how high your scores jump @tacpoly ?

 

But seriously @Aim_High, it's great you're utilization is hid with big cards, your only issue is you need one low limit card just to show revolving activity, so you don't get the point loss from all zero.

 

So really, all you need is one revolver that is $31,000 or less CL, just one. As a matter fact, I recall you *%@&$#!£? about one lower CL you got somewhere at the end of your run somewhere, right? Well turn that frown upside down and make that you're AZEO card! You need one lower limit card, it serves it's AZEO purpose. Other than that, don't expend any more brain cells on it, lol😉


Thanks for the advice @Birdman7!   I just need to clarify a couple of points. 

 

I know the AZEO principle but IF I were to only have ONE card below $31K, would it need to be reporting or not reporting a monthly balance?  Reporting and paid-in-full?  I guess I was more concerned about overall utilization calculations if large limits were excluded.  If all cards over $35K for example, were excluded, then my apparent utilization across cards would show much higher if I reported a signficant balance on one or a handful of lower-limit cards.  So the idea would be to report only a SMALL balances on the lower-limit cards?  And those lower limits only affect the older scoring models (which are mainly used for mortgage scoring now)?   And for use of current FICO models used for credit and auto loans, the low-limit cards don't really do anything special for me, correct?

 

I don't need to do a CLD as I have a few cards that will probably never get above $25K.  They are (or at least were) at the lender caps for that card.  (AFBA/UMB, AOD FCU, and my local CU card.)    While I had considered closing any card below $25K and maybe even some AT $25K (such as my Capital One Quicksilver), I doubt I would want to take downsizing to that extreme.    At least if the 3% benefit isn't nerfed, I can't imagine closing the AOD and the AFBA/UMB has good rewards and is one of my oldest cards.  I also may shift limits on some of my BofA or Chase cards a little as I reallocate the higher limit cards with them, which could keep up to three other cards at lower limits (CR, CFU, CF.)   I had toyed with the idea of greatly streamlining my profile by closing all those secondary cards with BofA and Chase and consolidating at very high limits, but it was more of a passing thought.  I still appreciate the rewards and this discussion has reinforced that some lower limits may serve a purpose.  So keeping one or more cards open below $31K is probably not a problem.  I just wanted to make sure that having most cards at/above $35K would not cause issues.

 

Yeah, I griped at a couple of low approvals.  My two lowest were a second Discover card, a MILES card I was approved for in Nov 2019 with a whopping $1K limit even though I had a $50K limit card with them already! Smiley Sad   I just closed it instead of trying to grow it.  Instead, DW applied and got a more useful $9K limit and added me as AU.  (That card doesn't reflect in my profile.)  Plus, Navy FCU approved me for a Platinum Visa with a lower limit than I had hoped for on a first card, $10K.  It was at the end of many other applications and I was a new member, so probably why they were my most conservative approval besides that Discover.  I've since grown it to $22.5K and hope to grow it to $25K to $50K range.

 

Just to reiterate ... do cards that exceed $50K or $100K - or some other benchmark higher than $35K for older FICO models - ever exclude utilization in calculating later model FICO scores?  Are there any other profile disadvantages to having those high-limit cards dominate a profile?   I have seen $50K or $100K referenced vaguely several times on My FICO and didn't know what were the potential impacts.  Maybe the references were more regarding that $31-$35K mark and the exact figure was misquoted?


@Aim_High OK I apologize, I was a bit busy, a little traveling with the holidays and all, but now I'm back so I can give you my non-rushed response. 😊

 

I know you're aware of the AZEO principal, but it actually serves several purposes. 1. It reduces the number of accounts with a balance, 2. it reduces revolving utilization, 3. it reduces revolving balances, 4. it ensures you don't get the AZ loss by ensuring at least one eligible revolver has a balance, 5. it reduces reduces total amount owed, 6. And it ensures there's no penalty for a retail balance and maybe other things we're unaware of.

 

Now here's the deal, as you said, it appears all revolvers factor on the new versions, but only revolvers under the cutoff CL factor in #2 and #3 (revolver utilization & revolver balances) on the mortgage versions. Since you have to have revolving balances in order to avoid #4 (AZ loss), you have to have a balance on an eligible revolver (bankcard under the cutoff) in order to avoid the AZ loss on the mortgage scores. 

so, correct, you would need to report a small balance on one bankcard with a credit limit of $31,000 or less to avoid the AZ loss on the mortgage scores.

 

There is no need for 2, and there's no need to report high utilization on your AZEO card, that's why the recommendation is for a balance under $100 reported on your AZEO card, to keep utilization and balances in check. But since the mortgage scores don't see the high CL cards, you can still use those if you're only trying to maximize the mortgage scores.

 

you asked if it helped with the newer scores, yes it does. To maximize the newer scores, AZEO is also recommended. The only difference is, when you're trying to maximize the newer scores, you're going to have to zero out the high CL cards as well (unless your scores are high enough without doing so).

 

The only difference is, you have to use the low CL card as your AZEO card for the mortgage scores; for the new scores, you could use any bankcard, BUT you have to mind your utilization & balances on the high CL cards with the new scores.

 

so the simplest thing is to simply use the low CL card as the AZEO card all the time, no matter what version. When you need to maximize 8/9, have the high CL cards report $0.

 

so if the mortgage scores didn't exist, you wouldn't even need a low limit card, but since they do you need the one, and while the low limit card may not do anything special for you on 8/9, it serves the same purpose because you use it as your AZEO card. So you're making it serve a purpose there, even though another card could serve that purpose.

 

So in conclusion, as far as I know, there is no cutoff for the newer versions. I believe they all count unless someone can give us some information to the contrary. There are no disadvantages to having some or all high credit limit cards for the newer versions, but you do need one lower credit limit card for the mortgage scores.

 

I have no idea where the $50,000 and $100,000 numbers came from unless people were misquoting as you said or guessing as to an increased cutoff number. If there is some significance to those numbers I'm unaware of it. 

 

Apologize for my late response but I was a little busy hope you had a great new 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 55 of 79
Aim_High
Senior Contributor

Re: question about high credit lines excluded from FICO8 scoring


@Birdman7 wrote:  

@Aim_High  OK I apologize, I was a bit busy, a little traveling with the holidays and all, but now I'm back so I can give you my non-rushed response. 😊

 

I know you're aware of the AZEO principal, but it actually serves several purposes. 1. It reduces the number of accounts with a balance, 2. it reduces revolving utilization, 3. it reduces revolving balances, 4. it ensures you don't get the AZ loss by ensuring at least one eligible revolver has a balance, 5. it reduces reduces total amount owed, 6. And it ensures there's no penalty for a retail balance and maybe other things we're unaware of.

 

Now here's the deal, as you said, it appears all revolvers factor on the new versions, but only revolvers under the cutoff CL factor in #2 and #3 (revolver utilization & revolver balances) on the mortgage versions. Since you have to have revolving balances in order to avoid #4 (AZ loss), you have to have a balance on an eligible revolver (bankcard under the cutoff) in order to avoid the AZ loss on the mortgage scores. 

so, correct, you would need to report a small balance on one bankcard with a credit limit of $31,000 or less to avoid the AZ loss on the mortgage scores.

 

There is no need for 2, and there's no need to report high utilization on your AZEO card, that's why the recommendation is for a balance under $100 reported on your AZEO card, to keep utilization and balances in check. But since the mortgage scores don't see the high CL cards, you can still use those if you're only trying to maximize the mortgage scores.

 

you asked if it helped with the newer scores, yes it does. To maximize the newer scores, AZEO is also recommended. The only difference is, when you're trying to maximize the newer scores, you're going to have to zero out the high CL cards as well (unless your scores are high enough without doing so).

 

The only difference is, you have to use the low CL card as your AZEO card for the mortgage scores; for the new scores, you could use any bankcard, BUT you have to mind your utilization & balances on the high CL cards with the new scores.

 

so the simplest thing is to simply use the low CL card as the AZEO card all the time, no matter what version. When you need to maximize 8/9, have the high CL cards report $0.

 

so if the mortgage scores didn't exist, you wouldn't even need a low limit card, but since they do you need the one, and while the low limit card may not do anything special for you on 8/9, it serves the same purpose because you use it as your AZEO card. So you're making it serve a purpose there, even though another card could serve that purpose.

 

So in conclusion, as far as I know, there is no cutoff for the newer versions. I believe they all count unless someone can give us some information to the contrary. There are no disadvantages to having some or all high credit limit cards for the newer versions, but you do need one lower credit limit card for the mortgage scores.

 

I have no idea where the $50,000 and $100,000 numbers came from unless people were misquoting as you said or guessing as to an increased cutoff number. If there is some significance to those numbers I'm unaware of it. 

 

Apologize for my late response but I was a little busy hope you had a great new year!


Thanks for the detailed response, @Birdman7!  It's a lot more complex than I thought.  So all of those six or more purposes factor independently into the scoring model?  

 

From my understanding, the AZEO bump is fairly small anyway, isn't it? If my FICO score 8's/9's are between 825 and 850, then the benefit from doing AZEO to maximize scores probably won't really make a huge difference in getting approved for credit or getting the best terms, would it?  I guess I always thought that AZEO was more something people did who were rebuilding and on the cusp on getting approved for a card. 

 

I was more concerned about whether higher limits would be completely ignored in scoring model's utilization calculations, which would have a much much larger impact from my understanding beyond the AZEO penalty.  I purposefully ran my utilization up on one new card last year (my NFCU Platinum card) to take advantage of a no-fee, 0% BT offer so that I could hopefully build payment history with Navy.I I ran a 98% utilization on that single card ($9800 balance on $10K limit) and my FICO scores temporarily dropped about 35 points, I believe, even though my overall utilization was still fairly low.   (I paid off the BT over three months.)   So my concern would be, what if I had TCL of $600K but I had shifted $400K of that into the higher limit cards.  If FICO were to ignore high limits that cross a certain threshold, my utilization calculation would be based on the remaining $200K, in my example.  

 

From what you said, though, it sounds like that is a false concern and nothing to worry about.

 

I had a great Christmas and New Year's and hope your travels went well!   Now, back to the grind ... Smiley Tongue






Total Length of Credit > 35 years; AoOA (Currently open accounts) > 27 years
AAoA > 7 years; AoYA less than 1 year (Aug 2020)
Credit Limits: Total > $573K. Average > $28K. Utilization 1%.
Total Inquiries (TU:3 ~ EQ:4 ~ EX:7); Scorable Inquiries (TU:1 ~ EQ:2 ~ EX:4)
New Accounts: 1/6 months; 4/12 months; 11/24 months (as of 01/11/21)
* Hover cursor over each card to see name & CL, or press & hold on mobile app.
** Gardening since 08/15/20. Garden Goal ACHIEVED!!: Gold Spade on 02/15/21
Message 56 of 79
Birdman7
Super Contributor

Re: question about high credit lines excluded from FICO8 scoring


@Aim_High wrote:

@Birdman7 wrote:  

@Aim_High  OK I apologize, I was a bit busy, a little traveling with the holidays and all, but now I'm back so I can give you my non-rushed response. 😊

 

I know you're aware of the AZEO principal, but it actually serves several purposes. 1. It reduces the number of accounts with a balance, 2. it reduces revolving utilization, 3. it reduces revolving balances, 4. it ensures you don't get the AZ loss by ensuring at least one eligible revolver has a balance, 5. it reduces reduces total amount owed, 6. And it ensures there's no penalty for a retail balance and maybe other things we're unaware of.

 

Now here's the deal, as you said, it appears all revolvers factor on the new versions, but only revolvers under the cutoff CL factor in #2 and #3 (revolver utilization & revolver balances) on the mortgage versions. Since you have to have revolving balances in order to avoid #4 (AZ loss), you have to have a balance on an eligible revolver (bankcard under the cutoff) in order to avoid the AZ loss on the mortgage scores. 

so, correct, you would need to report a small balance on one bankcard with a credit limit of $31,000 or less to avoid the AZ loss on the mortgage scores.

 

There is no need for 2, and there's no need to report high utilization on your AZEO card, that's why the recommendation is for a balance under $100 reported on your AZEO card, to keep utilization and balances in check. But since the mortgage scores don't see the high CL cards, you can still use those if you're only trying to maximize the mortgage scores.

 

you asked if it helped with the newer scores, yes it does. To maximize the newer scores, AZEO is also recommended. The only difference is, when you're trying to maximize the newer scores, you're going to have to zero out the high CL cards as well (unless your scores are high enough without doing so).

 

The only difference is, you have to use the low CL card as your AZEO card for the mortgage scores; for the new scores, you could use any bankcard, BUT you have to mind your utilization & balances on the high CL cards with the new scores.

 

so the simplest thing is to simply use the low CL card as the AZEO card all the time, no matter what version. When you need to maximize 8/9, have the high CL cards report $0.

 

so if the mortgage scores didn't exist, you wouldn't even need a low limit card, but since they do you need the one, and while the low limit card may not do anything special for you on 8/9, it serves the same purpose because you use it as your AZEO card. So you're making it serve a purpose there, even though another card could serve that purpose.

 

So in conclusion, as far as I know, there is no cutoff for the newer versions. I believe they all count unless someone can give us some information to the contrary. There are no disadvantages to having some or all high credit limit cards for the newer versions, but you do need one lower credit limit card for the mortgage scores.

 

I have no idea where the $50,000 and $100,000 numbers came from unless people were misquoting as you said or guessing as to an increased cutoff number. If there is some significance to those numbers I'm unaware of it. 

 

Apologize for my late response but I was a little busy hope you had a great new year!


Thanks for the detailed response, @Birdman7!  It's a lot more complex than I thought.  So all of those six or more purposes factor independently into the scoring model?  

 

From my understanding, the AZEO bump is fairly small anyway, isn't it? If my FICO score 8's/9's are between 825 and 850, then the benefit from doing AZEO to maximize scores probably won't really make a huge difference in getting approved for credit or getting the best terms, would it?  I guess I always thought that AZEO was more something people did who were rebuilding and on the cusp on getting approved for a card. 

 

I was more concerned about whether higher limits would be completely ignored in scoring model's utilization calculations, which would have a much much larger impact from my understanding beyond the AZEO penalty.  I purposefully ran my utilization up on one new card last year (my NFCU Platinum card) to take advantage of a no-fee, 0% BT offer so that I could hopefully build payment history with Navy.I I ran a 98% utilization on that single card ($9800 balance on $10K limit) and my FICO scores temporarily dropped about 35 points, I believe, even though my overall utilization was still fairly low.   (I paid off the BT over three months.)   So my concern would be, what if I had TCL of $600K but I had shifted $400K of that into the higher limit cards.  If FICO were to ignore high limits that cross a certain threshold, my utilization calculation would be based on the remaining $200K, in my example.  

 

From what you said, though, it sounds like that is a false concern and nothing to worry about.

 

I had a great Christmas and New Year's and hope your travels went well!   Now, back to the grind ... Smiley Tongue


@Aim_High The first 5 of those 6 are scoring metrics at all three bureaus, yes. The 6th one I believe is at Equifax only as far as retail goes, but I also left the "and possible other metrics we don't know" language in there, so there could be more, hard to speak in absolutes with proprietary secrets. 

A lot of people think of AZEO as only having one card with a balance but that necessarily requires you to reduce balances and utilization across-the-board, and even on that card, if it's properly followed. So, it ends up optimizing multiple metrics, yes.

 

you asked if the AZEO bump was minimal. Well, that all depends on where and in what condition the profile was before it was implemented.


If one had 90% aggregate utilization across 10 out of 12 cards with 95% highest individual utilization, with $30,000 in revolving balances, I would think AZEO would have a quite pronounced effect, bringing that down to one card with a balance under $100. Look at how many points you lost, just for having one card maxed out. Imagine then if your aggregate was maxed out and you had 10 or 12 cards with a balance.

 

In contrast, someone who regularly keeps their balances and utilization in check and maybe has a few cards report balance, well, for them implementing AZEO just means zeroing a couple of cards and maybe paying down a few thousand dollars and balances. Their score change may not be very significant because they were already 95% of the way to AZEO to begin with, you see?

 

"The effect of AZEO is directly proportional to the profile's distance from AZEO," to try to summarize and give a little aphorism for the matter. In other words, the closer you are to AZEO, the less points it's worth; the further you are from it, the more it's worth. 

Think about that and let that sink in, now that you know all the metrics it optimizes and consider a profile in the condition I delineated above. 

Now if you're FICO 8/9 is between 825 and 850, then your profile is in pretty good condition and much closer to AZEO than its opposite. And if you're already at 825, increasing your score any more is redundant. You're not gonna get any better rates in my opinion.

 

But the reason that your score is that high already in part is because you have utilization, balances, and number of accounts in check, correct? When you think of AZEO, you think of simply going from 3 to 5 cards with a balance to one card with a balance, but as we discussed above, that actually optimizes many metrics that you are not already abusing, so they don't require any remediation to begin with, you see?

 

yes, it is a concept expressed to people on the cusp who need a few more points and others. You don't need any more points, that's why it's not directed to you. However, AZEO is the epitome of a profile optimized via the Amounts Owed metrics (over which one has control). 

at the other end of the spectrum, the antithesis would be a profile with every Amounts Owed Metric abused to its fullest, every account with a balance, Revolving utilization (aggregate & individual) maxxed, Revolving Balances extremely high, etc...

 

so really it depends on how you look at it, where are you are between AZEO and it's opposite, basically is the adjustable range of your score absent changing other metrics like grabbing new accounts or inquiries or taking late.

 

yes, in the mortgage Scores the high limit cards are completely ignored and if you were to have high balances and utilization on eligible low limit cards, then yes you would suffer score loss.


Same on 8/9, if you were to have high utilization on 8/9. That's why my recommendation is to have 2 worksheets or workbooks, one for the old scores and one for the new scores. That way you always know where you're at on everything. Ccquest's workbook is great, btw.

 

yes if out of $600,000 in CL, only $200,000 were in low CL cards, then your utilization for the mortgage scores would be based on that $200,000, yes. But again, if you're about to make an application that uses an old score, you simply execute AZEO and you will see your best scores. But as good as your profile is, you may not even need to optimize that far. 

just keep in mind, AZEO is a optimization ideal. Whether you have to go that far depends on your starting point.

 

I hope that helps, if you have anymore questions, you know I'm here. 

-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 57 of 79
lyTENciL
Regular Contributor

Re: question about high credit lines excluded from FICO8 scoring

Thank you all for this discussion! You really saved me from potential headache, as I was considering pursuing CLI on my 25K card which sometimes doubles as my AZEO. I'm most concerned about my mortgage scores, so that move could have set me up for a confounding all-zero penalty.

 

@Birdman7 @Thomas_Thumb 

After my mortgage endeavors later this year, I'm in a good position to test this out for you all. I'm close to the thresshold on that one revolver. It's Navy though, and I've seen reports here that they give substantially more than is requested, lol. Advice on how to be sure to isolate this variable? I need to get my limit in the 31-34K range to try to find the mystery threshhold? Presumably I'll need the score plus reason codes at the higher CL, both with all zero, and with that card as my AZEO. Any other advice?



FICO8 (1/21): EXP 786. TU 825. EQ 807.
Mortgage (1/21): EX2 771. EQ5 786. TU4 unk.
Profile: Clean/thick?/aged/new. Revolvers: 4 open, 1 closed. 1 Install (7%).
AoOA/RA 17y. AAoA 3.5y. AoYA/RA 2m. TCL $35K.
Free Monthly FICOs:
Message 58 of 79
Birdman7
Super Contributor

Re: question about high credit lines excluded from FICO8 scoring


@lyTENciL wrote:

Thank you all for this discussion! You really saved me from potential headache, as I was considering pursuing CLI on my 25K card which sometimes doubles as my AZEO. I'm most concerned about my mortgage scores, so that move could have set me up for a confounding all-zero penalty.

 

@Birdman7 @Thomas_Thumb 

After my mortgage endeavors later this year, I'm in a good position to test this out for you all. I'm close to the thresshold on that one revolver. It's Navy though, and I've seen reports here that they give substantially more than is requested, lol. Advice on how to be sure to isolate this variable? I need to get my limit in the 31-34K range to try to find the mystery threshhold? Presumably I'll need the score plus reason codes at the higher CL, both with all zero, and with that card as my AZEO. Any other advice?


@lyTENciL i'm glad that you found the discussion beneficial. Glad to be of assistance. Yes that would be awesome to test it out to further refine where that cut off is.

 

Yes you would need to have a card in that range and use it as your AZEO card and see if you get the AZ loss and resulting no revolving activity reason code at EX2. (It wouldn't matter if you had balances on the cards with credit limits $35,000 or over, as long as all other revolvers were zero that are below the cut off, except the card your testing.)

 

You would want the score and codes the day before reported & the day it reported.

 

As far as how to box your increase in that range, I don't know. I know they haven't been giving over $4000 recently, I think. 


BTW, @AllZero @M_Smart007 @Slabenstein @LaHossBoss @CassieCard EX2 cutoff was inaccurate and has been revised. It is over $31,000, and under $34,900. EQ5 & TU4 is $35,000, of course. So AZEO for mortgage should be bankcard with CL of $31,000 or less.  Best recommendation as of now.

-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 59 of 79
lyTENciL
Regular Contributor

Re: question about high credit lines excluded from FICO8 scoring


@Birdman7 wrote:

As far as how to box your increase in that range, I don't know. I know they haven't been giving over $4000 recently, I think. 

 


Oh that's right, those are the max SP DPs as of late iirc. Well I'll be sure to report if I'm in a position to give good data. I don't believe I'll pass any aging thresholds for some time. YRA=YA at 1mo, ORA=OA at 17y, AAoA is over 3y right now. In roughly 4 years that oldest account is going to drop off for being closed, then I'll be able to get some good DPs on aging metrics. Hopefully the world won't have ended and we all will still be around for that!



FICO8 (1/21): EXP 786. TU 825. EQ 807.
Mortgage (1/21): EX2 771. EQ5 786. TU4 unk.
Profile: Clean/thick?/aged/new. Revolvers: 4 open, 1 closed. 1 Install (7%).
AoOA/RA 17y. AAoA 3.5y. AoYA/RA 2m. TCL $35K.
Free Monthly FICOs:
Message 60 of 79
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.