Author Topic: Credit Score Question  (Read 2212 times)

civil4life

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Credit Score Question
« on: March 24, 2018, 08:48:10 AM »
I have an excellent credit score.  The only recommendation I am always given is my debt to limit ratio and age of credit.

I know some credit scores are calculated by average age of cards and some use oldest card.  I have had my oldest card for 15 years.  This one is not what I worry about.

My question comes from the debt to utilization component.  Does anyone know if this includes store credit cards like a Sears or Home Depot?

Thanks.

Paul der Krake

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Re: Credit Score Question
« Reply #1 on: March 24, 2018, 08:52:34 AM »
Yes.

Rubic

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Re: Credit Score Question
« Reply #2 on: March 24, 2018, 12:49:24 PM »
My question comes from the debt to utilization component.  Does anyone know if this includes store credit cards like a Sears or Home Depot?

Assuming you're paying off your balance each month, your credit
utilization shouldn't matter.  On a rare occasion that I have a large
purchase (usually business related), my credit score might dip
temporarily, but then bounces back up on the following month.

Depending on the reporting cycle, a large purchase may not even
trigger a temporary dip on my score.

 

Catbert

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Re: Credit Score Question
« Reply #3 on: March 24, 2018, 01:07:09 PM »
You also need to realize that unless they give you a "perfect" score of 850 (I'm not sure that's even possible) they will always have a recommendation of how to improve.  If you're  subject to income.  Being above 800 is just for bragging purposes.

My score is around 830 and they always cite "too many recent cards" and "too many cards with a balance". I slowly churn credit cards and pay them all off each month so those recommendations aren't changing.

chasesfish

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Re: Credit Score Question
« Reply #4 on: March 24, 2018, 01:23:28 PM »
Credit scores are on a bell curve, you really shouldn't care about your score once you pass 720-750 depending on the type of retail loan you're trying to get.

Mine has floated between 775 and 810 for a long time and that's with a bunch of travel hacking!

civil4life

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Re: Credit Score Question
« Reply #5 on: March 24, 2018, 04:35:17 PM »
I have 2 cards that are holding a large balance, but are on promotional APYs.  I have about 3 others that I use regularly and pay off monthly.  Then a bunch of cards I have opened over the years for other promotional items.

When I bought my house 5 years ago my score was in the 790s.  Over the past couple of years it has been around 720 to 750.

Sayonara925

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Re: Credit Score Question
« Reply #6 on: March 25, 2018, 05:59:56 PM »
You also need to realize that unless they give you a "perfect" score of 850 (I'm not sure that's even possible) they will always have a recommendation of how to improve.  If you're  subject to income.  Being above 800 is just for bragging purposes.

My score is around 830 and they always cite "too many recent cards" and "too many cards with a balance". I slowly churn credit cards and pay them all off each month so those recommendations aren't changing.

A while back I took a screenshot when FICO-8 score, for whatever reason, shot up momentarily to 850.  The next month it plummeted 25 points for no apparent reason (zero debt, no credit activity).  The explanation given was "no recent revolving accounts" or something like that.  But, but...I didn't have revolving debt when the score was 850 either.

About 6 months later it again rose to 850, but can't find that screenshot.  I guess Mr. FICO was in a good mood those months?   Fickle as heck.


MrsWolfeRN

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Re: Credit Score Question
« Reply #7 on: March 25, 2018, 07:06:52 PM »
Mine has been as high as 842 before. It said something about"debt to credit ratio" , and I actually don't have very high available credit, so the next month I paid everything off before the statements posted so I could try to get an 850. The score actually dropped about 10 points because of low utilization.

Lmoot

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Re: Credit Score Question
« Reply #8 on: March 26, 2018, 05:17:25 AM »
If you are responsible with credit cards, you can ask for limit increases, and this will improve your utilization. The rise in score should be steep and swift since utilization has one of the largest impacts in scoring. If you already have a score in the mid 700ís you may not see too much of a difference though.

And yes. All revolving type accounts, count towards average age.

Rubic

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Re: Credit Score Question
« Reply #9 on: March 26, 2018, 07:03:26 AM »
If you are responsible with credit cards, you can ask for limit increases, and this will improve your utilization. The rise in score should be steep and swift since utilization has one of the largest impacts in scoring. If you already have a score in the mid 700ís you may not see too much of a difference though.

Be aware that some requests for a limit increase will activate a
hard pull on your credit, which causes a slight decrease in your
score.  A hard pull will drop off after 2 years.


Trying2bFrugal

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Re: Credit Score Question
« Reply #10 on: March 26, 2018, 07:52:58 AM »
I pay all my cards in full except for one balance transfer all the time. My score was 750+ and for no reason it went down to 720+.
The Debt ratio is lessthan 10% all the times. My history is only 8 years with 1/320 missed payment (which hurted 60 points due to TJ maxx sht).

If i close low limit ($700)store card (jcpenny-but i never received the card), will it hurt my score?

If I plan to buy a home, will closing all outstanding balances help boosting the score? What else could i do in 3 months to boost my scores?

civil4life

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Re: Credit Score Question
« Reply #11 on: March 26, 2018, 08:34:19 AM »
If you are responsible with credit cards, you can ask for limit increases, and this will improve your utilization. The rise in score should be steep and swift since utilization has one of the largest impacts in scoring. If you already have a score in the mid 700ís you may not see too much of a difference though.

And yes. All revolving type accounts, count towards average age.

I actually have been doing this.  My utilization is well under the 30%.

Is it better for me to close accounts that I do not use that may only be a year or so old?

NoStacheOhio

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Re: Credit Score Question
« Reply #12 on: March 26, 2018, 08:43:05 AM »
Is it better for me to close accounts that I do not use that may only be a year or so old?

Generally, yes.

Lmoot

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Re: Credit Score Question
« Reply #13 on: March 26, 2018, 09:01:09 AM »
If you are responsible with credit cards, you can ask for limit increases, and this will improve your utilization. The rise in score should be steep and swift since utilization has one of the largest impacts in scoring. If you already have a score in the mid 700ís you may not see too much of a difference though.

Be aware that some requests for a limit increase will activate a
hard pull on your credit, which causes a slight decrease in your
score.  A hard pull will drop off after 2 years.

True, but if all of the requests are done in a short period of time, they tend to only count as one. Also hard pulls have a much lower impact on the scoring model. It could cause your score to drop 5 points, but the result of a limit increase could potentially bump it up 50 points (depending on what utilization percentage range you are moving from/to).
« Last Edit: March 26, 2018, 09:13:36 AM by Lmoot »

Lmoot

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Re: Credit Score Question
« Reply #14 on: March 26, 2018, 09:12:14 AM »
Is it better for me to close accounts that I do not use that may only be a year or so old?

Generally, yes.

Iíd say no. It depends on the creditor, on the bureau, on the model/ version, type of credit etc etc. It seems that more often than not closed accounts in good standing could factor into age average, up to 7-10 years after being closed, and it wonít continue to age like an open account would, so it wouldnít contribute to the ďseasoningĒ of the average age. Once itís opened, the damage is likely done and only time can fix it. Also, youíll be trading one devil in for another devil of equal value, as you will raise your utilization with each closed acccount....and utilization and average age tend to be neck and neck for the percentage of value in calculating credit scores.

Oh, and also closing new cards is a bad look for creditors, if youíre looking to capitalize on promotions in the future. IMO too many risks for a minimal chance of success.
« Last Edit: March 26, 2018, 09:15:52 AM by Lmoot »

Rubic

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Re: Credit Score Question
« Reply #15 on: March 26, 2018, 09:20:03 AM »
Is it better for me to close accounts that I do not use that may only be a year or so old?

Generally, yes.

My preference is to keep all my cards with no annual fees open,
and put one small purchase on them each year.  This increases
my average age of accounts which improves my credit score.

If the card has an annual fee, I try to do a "product change" to
a non-fee version of the card.

LilMissMinimalist

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Re: Credit Score Question
« Reply #16 on: March 28, 2018, 12:17:57 PM »
Is it possible to get to the "800 Club" without taking out any big loans? Or, more, specifically perhaps .... how can I get to the "800 Club"?

Last month I paid off my 10k of credit card debt (finally) and my score is now at a very respectable 760. I just ran my credit reports and the last ding I had (a small medical debt from 2011) has finally fallen off. I owe about $3,500 left on my student loan (which will be paid off this year), and that's it.

I live minimally, in an urban area where I don't need or want a car, and have no desire to own property. So there's no chance of me taking out a loan for a big purchase anytime soon. 

Due to having shitty credit my entire adult life, my total credit lines on my cards are quite low (10k combined + additional 5k store card + 2k medical card). Would increasing my credit limits and/or getting an additional card or two boost my score enough to bother at this point?

I know the "800 Club" is all vanity, but coming from a place of having had a 500-range score in my twenties, I'm really proud of myself and want that trophy.

MrsWolfeRN

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Re: Credit Score Question
« Reply #17 on: March 28, 2018, 01:23:30 PM »
Is it possible to get to the "800 Club" without taking out any big loans? Or, more, specifically perhaps .... how can I get to the "800 Club"?

Last month I paid off my 10k of credit card debt (finally) and my score is now at a very respectable 760. I just ran my credit reports and the last ding I had (a small medical debt from 2011) has finally fallen off. I owe about $3,500 left on my student loan (which will be paid off this year), and that's it.

I live minimally, in an urban area where I don't need or want a car, and have no desire to own property. So there's no chance of me taking out a loan for a big purchase anytime soon. 

Due to having shitty credit my entire adult life, my total credit lines on my cards are quite low (10k combined + additional 5k store card + 2k medical card). Would increasing my credit limits and/or getting an additional card or two boost my score enough to bother at this point?

I know the "800 Club" is all vanity, but coming from a place of having had a 500-range score in my twenties, I'm really proud of myself and want that trophy.
I don't really know. I got my first mortgage at age 20, was mid 30s and on my third house, probably fifth mortgage counting refinances, before I hit 800. My available credit is probably less than 10k.

Lmoot

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Re: Credit Score Question
« Reply #18 on: March 28, 2018, 02:17:11 PM »
Is it possible to get to the "800 Club" without taking out any big loans? Or, more, specifically perhaps .... how can I get to the "800 Club"?

Last month I paid off my 10k of credit card debt (finally) and my score is now at a very respectable 760. I just ran my credit reports and the last ding I had (a small medical debt from 2011) has finally fallen off. I owe about $3,500 left on my student loan (which will be paid off this year), and that's it.

I live minimally, in an urban area where I don't need or want a car, and have no desire to own property. So there's no chance of me taking out a loan for a big purchase anytime soon. 

Due to having shitty credit my entire adult life, my total credit lines on my cards are quite low (10k combined + additional 5k store card + 2k medical card). Would increasing my credit limits and/or getting an additional card or two boost my score enough to bother at this point?

I know the "800 Club" is all vanity, but coming from a place of having had a 500-range score in my twenties, I'm really proud of myself and want that trophy.

Itís possible but might take longer since you lose points for lack of credit variety. But eventually gain points with time, as credit matures.

PoutineLover

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Re: Credit Score Question
« Reply #19 on: March 28, 2018, 02:32:10 PM »
I have a credit score in the 800s. I have 8.5 years of history, one fully paid off student loan, 5ish credit cards that are always paid in full and have probably never exceeded 20% utilization, and a line of credit I have never used. Never had a car payment or mortgage. My reports also include my cell phone bill, also always paid in full.

Michael in ABQ

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Re: Credit Score Question
« Reply #20 on: March 29, 2018, 02:23:59 PM »
My credit score dropped from the low 800s to the high 700s when I paid off all my debt. This included the last of my student loans, an auto loan, and all credit card balances - including closing a few CC accounts with 5-15k limits that I didn't use and didn't want to have any relationship (Chase and Citi).

Since then I've put some purchase for a side business on my oldest CC and as soon as that utilization registered (after a year with zero debt) my score went up about 20 points.

I'd be perfectly happy with no credit score but closing my few old unused credit cards will just cause it to drop but it would take a few years to go away. Since we'll be getting a mortgage in the next few years I don't want to do that. On the other hand, I'm not going to go borrow money just to make it look like I'm a better customer for financial companies that want to charge me interest.