08-11-2009 09:53 AM
This has probably been questioned before, but I have a question regarding a "charge card"
Since there is no credit limit stated how does this effect utilization?
It seems the 3 credit agencies report this differently and it effects utilization?
How does a charge card benefit the overall score? or does it? or when?
Thanks in advance.
08-11-2009 10:01 AM
a charge card IMO only helps your score if you charge a larger amount than everyday purchases like $10,000 once or twice a year, then pay it off.
the high balance will be reported in most cases, and you then can charge smaller amounts/everday purchases and let a small balance report.
IMO there really is no benefit to fico score. the benfit is lifestyle and the ability to charge large purchases without being penalized by fico.
08-11-2009 10:14 AM
This is contentious. I have three charge cards for more years than I want to reveal. Some years ago I rebuilt my credit using them because requiring payment in full each month was an external source of discipline.
They don't count against utl either way because the monthly payment in full is a given, not a choice as with credit cards. There are those (H) who will remind us that TU does count it in you utl. This may be so, however, all three of my reports have always been equal, except my TU is my highest score by far. So, if it is counting I wish they all did. (it shows the same substantial usage across all reports)
The advantage based on the above is that you can use the heck out of your charge card all month and not affect your other more touchy plastic so that you maintain a nice upward movement in your score.
This is my personal experience. If it does not seem to equate to others' experience I can't explain it. (It has been suggested though that the longer one has and uses charge cards, that are pif each month, the less they are noted by scoring.
IMPORTANT INFORMATION: All FICO® Score products made available on myFICO.com include a FICO® Score 8, along with additional FICO® Score versions based on Experian or Equifax data (additional FICO® Score versions based on TransUnion data are not currently available on myFICO.com). Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more
FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.