The Master $2 reporting "trick" explained

[mendelssohn]

With all due respect mattun, the information contained in the OP is the result of years of research and science by BobWang.

 

Nobody on CB knows more about FICO scoring than he does.

 

The information you are posting is not accurate.

 

This thread is a clarification, not a debate.

 

I started this thread to explain it AND stop misinformation from being posted.

Edited June 5, 2015 by mendelssohn

[mattun]

Well, you don't even have the $2/3 thing right. Discover cancels out $1.99 and below as a credit adjustment so they don't have to generate a paper statement. A few other cards (they're dwindling) cancel out .99 and below. Not because of credit reporting. I mean, it's obvious super low utilization > no utilization, but I've seen it pop up that bare minimal utilization < super low utilization before. We're only talking a couple points here, but I'd like to see whatever science BobWang has that $2 is somehow magical.

Edited June 5, 2015 by mattun

[mendelssohn]

Well, you don't even have the $2/3 thing right. Discover cancels out $1.99 and below as a credit adjustment so they don't have to generate a paper statement. A few over cards cancel out .99 and below. Not because of credit reporting. I mean, it's obvious super low utilization > no utilization, but I've seen it pop up that bare minimal utilization < super low utilization before. We're only talking a couple points here, but I'd like to see whatever science BobWang has that $2 is somehow magical.

It is right, and it's obvious that you haven't read the first post. The $2 number is explained there. It's to reliably get a balance to report.

 

This discussion had come up several times recently, so I thought we would have a clear thread on this subject.

 

Who does this help? People with clean reports.

 

What does it do? It helps you eek out every point possible from the utilization portion of FICO scoring.

 

What do you do? Let $2 report on 1 card and have the rest report $0.

 

Why $2? Because you want non-zero utilization reporting on 1 card that is included in FICO utilization calculations. Experimenting with amounts lower than $2 has often resulted in the balance being credited to $0, so $2 is the smallest "non-zero" amount to use reliably.

 

Are there any cards that this won't work for? Discover is $3 minimum. They will credit $2 to $0. Cards over $50K are not counted in utilization and also do not count.

 

I verified all of this with BobWang via email. I'm not going to post the emails, but if for some reason that is not good enough, I will forward the emails to Breeze and let her verify the authenticity of this information.

I leave my Discover balance at $2 every month and it is credited to $0, so you are incorrect.

 

Search Bob's posts.

Edited June 5, 2015 by mendelssohn

[January2015]

 

Mrage, I was just worried that there's a better benefit to letting the $2 report on a high limit card. I remember reading that using your highest limit card was the best strategy for this. This is totally my own fault for paying AMEX at the end of May before the close date. I was already worried then about the AMEX w/ a $6K limit v the Barclays w/ a $15K limit, but I wanted to force the CLI from $2K to $6K on AMEX to report. Just even MORE mad at myself now that it will be the stinky low limit USAA VIsa.

 

But is that not part of it? Using your highest limit card for the $2 to report on, I mean. I realize there's a benefit to having one report $2 v all $0s.

 

Was curious if using your highest limit card to report the $2 v your lowest limit card was one of those subtle things like $2 v 1%; where there's SOME benefit, but not as much as is possible.

In theory, yes, the very very best you can do is to let it report on your highest limit. In practice, there's not going to be a single point of difference in your FICO.

 

I think that part of the trick is meant more as a guideline for any balance.

 

Consider the following hypothetical: you have 3 CC's. One has a CL of $300. Another, $500, and still another, $5000. All the statements cut today, but you only have enough in your checking to pay all but $250 of your current balances. The same $250 that is only 5% of your biggest card nearly maxes out your $300 limit card. Clearly it will have an impact on your FICOs if you don't choose wisely. THAT is where that bit of the advice comes into play... it's more general guidance.

 

Yes, in theory, $2 under the same scenario, it is still ideal to have it report to the largest card. But is it *actually* going to matter to FICO's algorithm if your highest individual card is 0.67% or 0.04% on a balance of $2? Of course not. But if you want to be absolutely, positively, 1000% sure that you did everything you could to get the highest possible score for your profile, that's the way to do it.

 

 

Yes, as ridiculous as it seems I want to be absolutely, positively, 1000% sure that I did everything I could to get the highest possible score. That's it, and that's all. B/c it's all I CAN do. Other than lose my mind b/c I'm so nervous about this whole thing.

 

So thanks!!

I appreciate the info. ANd your clarity

[Orly]

Along the lines of Discover cards, my understanding is that if I pif (leaving zero balance) every month before cut date, it still generates a report ($0) to the CRA's, right? Will that also generate a monthly statement mailed to me with my TU score? I only ask because I just got a new card with them.

[tweak]

Along the lines of Discover cards, my understanding is that if I pif (leaving zero balance) every month before cut date, it still generates a report ($0) to the CRA's, right? Will that also generate a monthly statement mailed to me with my TU score? I only ask because I just got a new card with them.

 

Yes. Any activity will cause them to generate a statement and a TU FICO score -- even if the final balance is $0.

This is generally true for most/all cards.

[NoPresetSnarkLimit]

Well, you don't even have the $2/3 thing right. Discover cancels out $1.99 and below as a credit adjustment so they don't have to generate a paper statement. A few other cards (they're dwindling) cancel out .99 and below. Not because of credit reporting. I mean, it's obvious super low utilization > no utilization, but I've seen it pop up that bare minimal utilization < super low utilization before. We're only talking a couple points here, but I'd like to see whatever science BobWang has that $2 is somehow magical.

What a dink!

[mendelssohn]

Even buying a $2 Amazon GC and letting Discover credit it to $0 generates enough activity for the free FICO.

 

 

Well, you don't even have the $2/3 thing right. Discover cancels out $1.99 and below as a credit adjustment so they don't have to generate a paper statement. A few other cards (they're dwindling) cancel out .99 and below. Not because of credit reporting. I mean, it's obvious super low utilization > no utilization, but I've seen it pop up that bare minimal utilization < super low utilization before. We're only talking a couple points here, but I'd like to see whatever science BobWang has that $2 is somehow magical.

What a dink!

What does Bob know, right? Edited June 5, 2015 by mendelssohn

[NoPresetSnarkLimit]

[NoPresetSnarkLimit]

For clarification since Dink could be considered derogatory to some people and that wasn't my intent, here's what I meant:

 

dink : the empty sound your head makes when theoretical and probable scenarios bounce within the cohesive confines of brain matter ultimately causing you ice cream headache due to lack of understanding.

[breeze]

For clarification since Dink could be considered derogatory to some people and that wasn't my intent, here's what I meant:

 

dink : the empty sound your head makes when theoretical and probable scenarios bounce within the cohesive confines of brain matter ultimately causing you ice cream headache due to lack of understanding.

 

Yep, those questions were answered in the original post. I think some people just like to muddy the waters. If people want to use this technique to get a quick score boost, the first post in this thread tells you the basics of how to do it. If you have questions about which card to use in your specific circumstances, ask away. But the basic technique is explained. It works exactly the way mendel explained it. That is not up for debate.

[mendelssohn]

Thanks, Breeze!

[BDK]

[djhall]

Maybe I'm making this too simple, but can't all this rather easily be summed up as:

 

1) The best utilization for FICO scores is the least total utilization greater than zero.

 

2) Since card issuers usually round anything less than $2 down to $0 when reporting to credit bureaus, one card reporting $2 is the lowest you can go without getting rounded down to zero total utilization.

 

Am I missing something?

[mendelssohn]

Maybe I'm making this too simple, but can't all this rather easily be summed up as:

 

1) The best utilization for FICO scores is the least total utilization greater than zero.

 

2) Since card issuers usually round anything less than $2 down to $0 when reporting to credit bureaus, one card reporting $2 is the lowest you can go without getting rounded down to zero total utilization.

 

Am I missing something?

Perhaps you're missing the first post where I explained what you just said.

 

This discussion had come up several times recently, so I thought we would have a clear thread on this subject.

 

Who does this help? People with clean reports.

 

What does it do? It helps you eek out every point possible from the utilization portion of FICO scoring.

 

What do you do? Let $2 report on 1 card and have the rest report $0.

 

Why $2? Because you want non-zero utilization reporting on 1 card that is included in FICO utilization calculations. Experimenting with amounts lower than $2 has often resulted in the balance being credited to $0, so $2 is the smallest "non-zero" amount to use reliably.

 

Are there any cards that this won't work for? Discover is $3 minimum. They will credit $2 to $0. Cards over $50K are not counted in utilization and also do not count.

 

I verified all of this with BobWang via email. I'm not going to post the emails, but if for some reason that is not good enough, I will forward the emails to Breeze and let her verify the authenticity of this information.

Edited June 6, 2015 by mendelssohn

[djhall]

 

Maybe I'm making this too simple, but can't all this rather easily be summed up as:

 

1) The best utilization for FICO scores is the least total utilization greater than zero.

 

2) Since card issuers usually round anything less than $2 down to $0 when reporting to credit bureaus, one card reporting $2 is the lowest you can go without getting rounded down to zero total utilization.

 

Am I missing something?

Perhaps you're missing the first post where I explained what you just said.

 

Oops. While editing I removed first sentence: I don't understand all the controversy and questions for something so simple.

 

I just don't get why there seem to be pages and pages of threads about it being 1%, or maybe $5, or maybe....

 

Rather than just assuming everyone else wasn't getting it, I figured I'd check to make sure it wasn't me that didn't get it.

Edited June 6, 2015 by djhall

[mendelssohn]

 

 

 

Maybe I'm making this too simple, but can't all this rather easily be summed up as:

 

1) The best utilization for FICO scores is the least total utilization greater than zero.

 

2) Since card issuers usually round anything less than $2 down to $0 when reporting to credit bureaus, one card reporting $2 is the lowest you can go without getting rounded down to zero total utilization.

 

Am I missing something?

Perhaps you're missing the first post where I explained what you just said.

Oops. While editing I removed first sentence: I don't understand all the controversy and questions for something so simple.

 

I just don't get why there seem to be pages and pages of threads about it being 1%, or maybe $5, or maybe....

 

Rather than just assuming everyone else wasn't getting it, I figured I'd check to make sure it wasn't me that didn't get it.

It actually is very simple and doesn't require any math. Bob simplified it so it was easy to understand.

 

Unfortunately there are people that still don't understand that this is not an opinion. Years of research went into this. When people with 17 posts start questioning this, I know that they probably don't know all of the research that went into this or understand the factors at play.

[cashnocredit]

BobWang's research into this was the most comprehensive study I've ever seen on tweaking FICO upward. Prior to his work the notion that one just had to get the utilization below 10% was widely circulated - and wrong.

[Brandon1008]

Waters are getting muddy....

 

QUESTION: On my 2 AMEX cards, the "Next closing date" is 7/10/15 & 7/18/15

 

Does that mean I need to pay down by 7/9 and 7/17?

 

Do you guys use a spreadsheet of some sort? Any ADVICE related to the original post? THANKS!!

[mendelssohn]

You can pay it the day your statement closes.

 

To be sure, you can push a payment from bill pay to create a small credit balance or stop using the cards near the statement date.

[Brandon1008]

You can pay it the day your statement closes.

 

 

Ok. What happens is you pay AFTER the close date? I'm still not 100% on this... would you minds giving an example? or what you do/did?

[mendelssohn]

 

 

You can pay it the day your statement closes.

 

Ok. What happens is you pay AFTER the close date? I'm still not 100% on this... would you minds giving an example? or what you do/did?

Then a balance reports.

[mendelssohn]

I had been unable to find this post, but saw it earlier today and wanted to add it to this thread:

 

 

 

 

Lately, a lot of people have been saying 1% overall UTI maximizes FICO.

 

That is not true.

 

If I let 1% or $10k report,

 

my FICO would probably drop 25 points.

 

 

The exact recommendation is $2 on one card.

 

$1 on cards that don't report $1 as $0

 

https://creditboards.com/forums/index.php?showtopic=497484&p=4999155

[Creditbug]

...Just so I'm crystal clear on this:

 

1. find something to buy that is exactly $2 on a credit card

2. then pay it off immediately before the statement cuts, or pay the $2 when it is due...If I pay before the statement cuts, will payment history be able to "take" and record the way I want it to in a "building my credit kinda way?"

[mendelssohn]

No. Pay all cards but 1 to $0 before the statements cut.

 

Pay 1 card down to $2 before the statement cuts and let the $2 report in the statement.

 

After the statement cuts, pay the $2.