I found it amusing what FICO thinks is high utilization

For just about anything you want to get off your chest about credit cards.
7 posts
MemberSince99
Centurion Member
Centurion Member
 
Posts: 4913
Joined: Sun May 20, 2012 4:35 pm
Location: WI

I found it amusing what FICO thinks is high utilization

Postby MemberSince99 » Sat Jul 27, 2013 4:58 pm

Even though we crack jokes about how fanatical they are, there is a grain of truth in it.

I bought all 3 scores today which I updated in my signature. I was curious why TU was so low, so when I checked one of the reasons was "You've made heavy use of your available revolving credit". I was huh that's news to me I never do that. They claim I'm at 1%, saying that FICO "high scorers", you know, those mythical people who never apply for any cards but have 25 of them, typically have 7% utilization on average. I was like ok, this may be the new FICO math, but the last time I checked 1% was way under 7%. I don't even think it's 1% in any case - FNBO caught me for 27 bucks and Amex for 78 because I couldn't pay that before the statement cut (same with 12 dollars on my Gold card). So I think THAT's what it's whining about, it sees a balance on 3 cards and thinks this guy is just abusing the hell out of credit letting a balance hit on 3 cards. That's my "high" utilization they are talking about and apparently how the scoring model interprets it. (See why I was moaning about not being able to pay the cards?)

So that's my total utilization - 117 dollars, out of what well over 40k available credit, and I have high utilization in their TU model.

It logically has to be the fact it's across 3 cards but isn't it a little much they lower your score due to that? I mean even for those fruitcakes, isn't it a bit extreme? I already paid FNBO and the 78 on the Amex card and haven't paid the 12 bucks on the Gold simply because Amex won't let me pay them. But I'm a credit card abuser :)
And you know what is ironic? If I had 0 balances they'd whine about that saying I wasn't showing "responsible" use of my available credit. It reminds me of a performance review - they are ALWAYS going to come up with something negative to say even if they have to make up nonsense.

It's educational, and a bit entertaining, and I don't really care, to be honest, but I think that's just an indication I should quit throwing money at those idiots over there for a while and wait until it's worth knowing.


Robrus1
Centurion Member
Centurion Member
 
Posts: 797
Joined: Tue Oct 02, 2012 3:25 pm
Location: Texas

Postby Robrus1 » Sun Jul 28, 2013 9:25 am

It's kind of crazy. This month I reported 9% utilization according to Credit Sesame and both of my fako scores from there and Karma dropped. I don't understand how 9% means I'm irresponsible and should have points knocked off of my scores, but whatever. It's paid off now but both of my Amex cards and my CSP reported higher than normal balances from our vacation last month and I couldn't pay them down until they'd already reported. Shame on me, I know, I guess it's a good thing I don't care about my score that much. I am thinking about going for a CLI on my CSP soon, I just can't decide on how much to ask for. I don't think my scores dropped enough to really matter to Chase, they dropped about 6 points. You let $117 report? That's horrible! I let a lot more than that report last month... so I guess I should be hanged?
Amex Platinum
Amex BCP 21K
Amex SPG 5K
Barclaycard Arrival Plus WEMC 5K
Chase Sapphire Preferred 23.5K
Credit Union 10K
Discover IT 7.75K

MemberSince99
Centurion Member
Centurion Member
 
Posts: 4913
Joined: Sun May 20, 2012 4:35 pm
Location: WI

Postby MemberSince99 » Sun Jul 28, 2013 10:20 am

It's been a trend over the years of what constitutes "low" utilization. At one time 50% was considered "low" (years ago) and now 1% is a huge red flag to lenders if it's on more than one card. (Actually the math says it's not even 1% but again that's probably the new FICO math model). Even on the FICO forum, the rabid die hards are howling how 10% is horribly high. I used to joke how we'll get to the point that you need to be sure you only let a penny report or it's "high" utilization.

Yeah I don't see 9% as an issue, even if you carried a balance.

We should probably both be drawn and quartered if you ask the FICO diehards - we have more than a single inquiry in our lives we let a small balance report before paying it off as soon as possible and we actually take the rewards money they give us, my God Robrus1 we are almost terrorists to them if you think about it.

It really does get ludicrous. It's good to know that's what they do to us though in terms of scoring, so that when it matters we can make sure that doesn't happen. Otherwise, why sweat it.

But it's worth knowing about, in case someone is going to app for a card or loan. With the TU model, if the lender tends to pull TU, be sure to only let a balance hit on one card before you app.

Daniel
Centurion Member
Centurion Member
 
Posts: 119
Joined: Tue Sep 18, 2012 6:18 pm
Location: US

Postby Daniel » Mon Jul 29, 2013 10:26 am

MemberSince99 wrote:It's been a trend over the years of what constitutes "low" utilization. At one time 50% was considered "low" (years ago) and now 1% is a huge red flag to lenders if it's on more than one card. (Actually the math says it's not even 1% but again that's probably the new FICO math model). Even on the FICO forum, the rabid die hards are howling how 10% is horribly high. I used to joke how we'll get to the point that you need to be sure you only let a penny report or it's "high" utilization.

Yeah I don't see 9% as an issue, even if you carried a balance.

We should probably both be drawn and quartered if you ask the FICO diehards - we have more than a single inquiry in our lives we let a small balance report before paying it off as soon as possible and we actually take the rewards money they give us, my God Robrus1 we are almost terrorists to them if you think about it.

It really does get ludicrous. It's good to know that's what they do to us though in terms of scoring, so that when it matters we can make sure that doesn't happen. Otherwise, why sweat it.

But it's worth knowing about, in case someone is going to app for a card or loan. With the TU model, if the lender tends to pull TU, be sure to only let a balance hit on one card before you app.


I always love your guys' commentary on the other forum... I can't imagine what they would say if they knew I always let my statement balance hit in its natural form except for the three months leading up to an inquiry.

Userofcards
Gold Member
Gold Member
 
Posts: 30
Joined: Tue Apr 16, 2013 1:59 pm
Location: USA

Postby Userofcards » Mon Jul 29, 2013 11:30 am

Daniel wrote:I always love your guys' commentary on the other forum... I can't imagine what they would say if they knew I always let my statement balance hit in its natural form except for the three months leading up to an inquiry.



I'm kinda with Daniel - a lot of the stuff on the "other forum" is extreme.

But, placed in context, I think it is actually reasonably sensible. Many posters on that forum have either scandalous credit histories, no credit histories, or other credit problems. With that in mind, some of them really do need to avoid multiple inquiries in a 1 month period, letting big balances hit, et cetera. In part they should avoid that so as to keep their already weak credit score from tanking further, but in part because increased Credit Limits and new accounts are a new chance for many people there to take on debt they really can't handle.

Think about how important the "recon lines" are to people on that forum. Some of them are having trouble getting approved for cards to begin with. People who are just barely qualified for a Barclaycard likely are seen by creditors (Barclays and others) as larger risks. These individuals probably do need to be on their best behavior, at least for a year or so.

People who have a reasonable credit history for the last few years need not be fearful of letting a balance report, opening a new account, inquiries, or whatever. But people who have gotten into major credit card trouble in the past or have just gotten there very first credit card probably should think twice before doing that sort of thing.

DA SLY 1
Green Member
Green Member
 
Posts: 12
Joined: Sun Jun 30, 2013 11:48 pm
Location: Hawaii

Postby DA SLY 1 » Tue Jul 30, 2013 5:22 pm

I believe the TU score you purchase there are TU 98. I think lenders use probably the 08 or the 04 models. Only a handful of lenders use the TU98. I stopped wasting my money buying fico scores,as lenders use there own internal risk models.. It's been said that scores were as different as 100 pts from what was purchased at myfico! As long as you think your credits good..your probably right...

It's also been argued that knowing exact fico scores give you more leverage..bad for business...that's why they (lenders) don't tell you everything. I personally believe that...I wish myfico get with the times and update there models but like I said, knowing gives you some sort of leverage and that's bad for business...my 2 cents....
NFCU Flag Visa Sig $11k *| AMEX BCE $6k*| Discover It $2.5k *| Citi TY Preferred $3.5k *|
Chase Freedom Visa $500 *| Lowe's $3.5k *|
Bank of Hawaii Rewards Platinum Visa $3.8k *| Hawaii USA FCU Platinum Visa 3k *| Firestone 1.8k *| OCCU Beaver Visa 20k *|

FICO EQ- 747- FICO EX - 727 - FICO TU 737

User avatar
Z06Biker
Centurion Member
Centurion Member
 
Posts: 464
Joined: Fri Apr 12, 2013 5:39 pm
Location: Los Angeles

Postby Z06Biker » Wed Jul 31, 2013 3:43 pm

Hold on, I'm confused. So 1% utilization, or thereabouts, on different cards is considered bad? But a total of 1% utilization of your total available credit all on a single card ISN'T bad? Can somebody clarify?
AMEX: PRG Gold, Business Simply Cash, Business Costco, BCE.
Chase: United MileagePlus Club, Sapphire Preferred, Amazon Rewards
Barclaycard Arrival World Mastercard
HSBC Cash or Fly World Mastercard
USAA World Mastercard, USAA Platinum Mastercard
Wells Fargo Business Platinum
USC Credit Union Mastercard



Return to “General Credit Card Talk”

Who is online

Users browsing this forum: No registered users and 2 guests