21 years old---looking for credit card advice?

[mgs2010]

OK so heres the deal...

I'm 21 with pretty good credit...I have the following cards, looking to close a few maybe?

Capital One (my oldest account, opened in November 2005) with a 7,500 limit (this is the highest it will ever be with this account, I've reached their "ceiling")

Chase Freedom (opened Jan 2008) credit limit is 10,000

Chase Rewards Plus (opened in April 2007) credit limit is 14,500

Citi Drivers Edge (opened 10/2007) credit limit 18,000

Discover (opened 11/2007) Credit limit 3,100 (wtf, this is my lowest actual credit card limit aside from Kohl's)

Kohl's (opened May 2007) Credit limit 2,000

Bank of America (opened Jan 2008) limit 7,200 (recently lowered from 9,000 for some reason...)

HSBC (opened October 2008) limit 3,500

I need/want to close a few of these....not sure which I should close or keep. I keep thinking to close Kohl's because it seems pretty useless I only use it for the sales and nothing else.

Never any lates on anything. I also have 5 car loans, 3 paid off (never late) and 2 open (one co-signed for a family member--never late--I handle her finances..long story)

My scores are all decent, low-mid 690's for TU and EQ....how can I get above this into the 700's? I was hoping closing one or two of these cards would do it?

Thanks for the advice!

[haulingthescoreup]

Hi, welcome to the forums!

If you haven't already, please read Understanding Your FICO ® Score and Credit Scoring 101 (at least the first post.)

These will give you the background knowledge you need to understand what you read here on the forums.

Closing cards does nothing but hurt you. You have awesome CL's and cards; don't mess with a good thing.

I'm guessing that you don't pay your bills until the statements post, right? If so, the FICO scoring formula interprets this as carrying balances.

When you pull your FICO EQ and/or FICO TU score reports, what are your negatives on screen 2, listed in order?

If you pay in full (PIF) every month, but you don't do so until after a balance posts, try paying off all your CC accounts except one online. Pay 3 days or so before the statement drops, which is when most cards report. Let one card report a $10-20 balance, and then pay it off before you have interest charges.

The exceptions to paying off 3-4 days before statement date: HSBC/Orchard bank cards and US Bank cards update on the last business day of the month, reporting the balance as of that date. American Express reports the balance that is on your statement, but they don't do so for another 4 weeks, making it report a month late in effect.

[Anonymous]

What are your balances on the CC's?  The Tradelines and CL's are one thing, but the percentage of utilization and number of accounts with a balance are another.

BTW, that's a pretty impressive line up of accounts for 21. 

I am curious, are some of these AU accounts or are they all your individual?  I ask because you mentioned opening Capital One in 2005 (that's nearly 4 years ago) and 21 minus 4 is 17....or did you get this right after your 18th birthday?

Most of your cards are prime.  I wouldn't close them, I would just sock drawer them except for occassional use and keep your balances low, not running up unnecessary debt.

Having the credit won't hurt you, unless you are not disciplined to handle it.

Anyway, post back your balances/utilization and then you can expect some input.

[mgs2010]

These are all my own accounts. I've been pretty **bleep** about my credit since turning 18....i'm honestly afraid of being late and would rather go hungry than miss a credit card payment. haha. Anyways, my total balances are about 9k spread amongs the capital one (which gave me a freakin' AWESOME 1.99% for LIFE on BT---so i took full advantage of that over a year ago) and bank of america I owe them about 5k on my 7,200 limit. rest is basically small stuff, I generally carry a small balance on a few cards a month. I owe zero on kohls and both chase accounts, and only a few hundred here and there on the rest.

the negatives listed on my score report are:

1. New Account (this must be my 2 auto loans, I purchased a new car in March and co-signed a loan in June)

2. Short account history

3. Seeking Credit (this must be from the vehicle loans)

So, you think I should keep all my accounts open and active? I have closed quite a few in the past year or so, mainly ones that I don't find necessary like gas cards and store cards...my scores took a slight dive but have recovered nicely since.

Anything else I can do to raise my score?

The positive marks on my credit from the EQ report are:

1. No missed payments

2. low credit usage

3. No collection or record.

Do i just need to wait a little longer until my history ages to have a higher score or what? I thought I was doing it all right..

[Anonymous]

IMO, the prime cards are worth keeping.

Having closed a few store/gas is fine.  But what is it you hope to accomplish by closing?  This won't raise your score.  In fact it will reduce your available credit, which increases your percentage of utilization which is a FICO ding.

Get your balances all onto 1 or 2 cards max, then work on reducing your percentage of balances carried to less than 10% of your available CL's

FICO doesn't like a lot of concurrent balances and it doesn't like high reported percentage of utiliztion  If you are in the 690's, this alone would bump you over 700 I would think.

But again, what purpose does closing the accounts serve.  Don't make credit decisions without a strategy and intended outcome.  If they have Annual Fees or something, then yeah, cut those.  But if they don't, then just don't use them beyond what you spend normally in cash each month.  Use them debit style.

[haulingthescoreup]

+1

Agree with txjohn. Your best best is to have only a couple of cards reporting balances. Having (it appears) all your cards reporting is definitely hurting you.

[Karatz]

---

txjohn wrote:

IMO, the prime cards are worth keeping.

Having closed a few store/gas is fine.  But what is it you hope to accomplish by closing?  This won't raise your score.  In fact it will reduce your available credit, which increases your percentage of utilization which is a FICO ding.

Get your balances all onto 1 or 2 cards max, then work on reducing your percentage of balances carried to less than 10% of your available CL's

FICO doesn't like a lot of concurrent balances and it doesn't like high reported percentage of utiliztion  If you are in the 690's, this alone would bump you over 700 I would think.

But again, what purpose does closing the accounts serve.  Don't make credit decisions without a strategy and intended outcome.  If they have Annual Fees or something, then yeah, cut those.  But if they don't, then just don't use them beyond what you spend normally in cash each month.  Use them debit style.

---

I've gotten rid of two annual fees in my life by calling and asking for it to be removed. Tonz of stories here where it takes a 4th or 5th attempt sometimes to get something. Just be patient, keep trying, call backdoor numbers and at different times of the day, be nice to them, and if they still say no, decide if you want to try again to get them removed six months from now, if not then ya, give em the ole see ya. (and that might even get it removed)

All excellent advice IMO up above.

[creditwherecreditisdue]

Do not threaten to close cards in order to get what you want unless you are prepared to be called out on it. I have never found it necessary to resort to this tactic. I instead dangle the prospect of increased use. (Carrot v. Stick) I did this with my Direct Merchants Bank MC (HSBC) and ended up with a permanently waived AF and 6.99% purchase APR promo. In return I honored them with some use and even allowed them to make just a very few dollars of me. One hand washes the other.

[mgs2010]

Yeah, I never suggest the "call until you get what you want" tactic, mainly becuase I'm a phone rep for a large company and let me just say...NEVER do this...we know when you call, we can see you called in 6 times today and everyone has told you no, sometimes you'll get lucky and have someone do what you want just to get you off the phone but I warn you, the account is probably notated with some pretty harsh remarks about how annoying and pesky you are...so it will keep you from getting favors done in the future. Just like the last guy said, be patient and don't demand anything. The phone rep can be your best friend, or your worst enemy. a lot of times reps have empowerment to do almost anything to an account (within reason of course) So, you never want to come off as annoying or selfish...and PLEASE don't threaten to "take your business elsewhere" it just makes us mad.

sorry, just had to give some confessions of a customer care rep.

Hope that helps some of you going forward.

[creditwherecreditisdue]

I used to work for Carnival (outbound rep., awesome job) and trust me threats and nastiness got you nothing other than a transfer to a supervisor. Considering the fact that I could play the system like a fiddle if I liked you that was generally a serious step backwards. Better to get over on me and have me call a sup for you and have them rubber stamp something on my say so than go there yourself with a bad attitude. You get far more with a PMA than the alternative approach.