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Average age of credit card accts

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haulingthescoreup
Moderator Emerita

Re: Average age of credit card accts


shalane85 wrote:

okay no more apping.! I have the funds to pay off all my credit cards now, so is that what I should do? I always though it was important to carry a balance on your cards.



You should never carry a balance on cards if you can possibly help it, with the possible exception of a special 0% or very low rate, where you can make money by having the funds elsewhere earning a higher interest rate. Even then, having balances alarms lenders these days.

Pay off all your cards, but continue to use them. For best scoring (and possibly to keep lenders calm), pay them off each month before they report to the bureaus, which is generally on the statement dates. But leave one with a balance of about $10, let it report, and then pay it off before the due date, so as to avoid interest charges. Treat your CC's as if they were debit cards --don't use them if you don't have the money in the bank to pay them off, or unless you will have the money by the time you need to pay them.

As for store cards, they frequently have awful APR's, and they're often handled by a lot of the more unpleasant banks like GEMB and HSBC. They can be handy if you genuinely shop there, and if they give you killer rewards for having a card. Always plan to PIF them that month, or any savings you got will be quickly eaten up in interest.

It appears to help scores to have a store or retail card in addition to bank cards, as long as the card doesn't also have a Visa, MC, Discover, or AmEx logo on it.
* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
Message 11 of 19
shalane85
Frequent Contributor

Re: Average age of credit card accts

I'm starting to wonder would I have been better off getting a secured bank of america card vs. the new hsbc card. Even though I was approved if I dont activate it they cant report the card, right? Only as an inquiry, right?This is really making my head hurt and I apologize in advance for asking a lot of dumb questions. I been reading alot of posts about the Boa 99/500 card or the reg secured card. Should I go for one of those instead? Or should I sit my credit eager behind down and activate the HSBC card and wait on Boa card.
Message 12 of 19
Anonymous
Not applicable

Re: Average age of credit card accts

Shalane85,

 

It's hard to tell whether it will report or not; logically it shouldn't but given how automated these things are the right hand of Capital One may not know what the left hand is doing. You could call and ask.

 

If you have enough to open a secured card you should do that, but if you have that much pay off your balances first. A secured card will still lower your AAoA. Ask yourself exactly what you need credit for right now that your existing cards don't give you, because there is nothing that keeps you from using the full credit line of your credit cards if you do not need to apply for credit.

 

You have enough cards to build you credit up just fine by paying them on time for at least 2 years and then making sure you are not showing a balance when it comes time to apply again. As you have have had at least one of those cards for 2 years it won't take that long to get 24 months of on time payments on one of your other cards; 2 cards with 24 months of no late payments is a big plus, given no other negatives. 

 

Do you have a need to revolve more than $1850 per month? Or are you looking to put more debt on you balances so you only have to pay 2.5% a month for the next 4 years, because that way lies trouble, especially this early in your credit building process.

 

Consider joining a credit union if you can, it may be easier to qualify for a higher limit card.

Message 13 of 19
Anonymous
Not applicable

Re: Average age of credit card accts

Just remember most people get denied for credit line increases because they wait until they really, really need the credit to ask. The whole credit score system penalizes you for asking for credit when you really need it; you have to ask when it appears you don't need it  as people with existing balances close to their credit limits who ask for more credit are very risky prospects as it implies they are running out of money.

 

Unfortunately both HSBC and Capital One are not known for being generous with CLI for people rebuilding their credit so going with BOFA, if you can get it may be the way to go. Don't expect a great initial credit line or low interest rates at the begnning with them, those come after they get to know you 

Message 14 of 19
shalane85
Frequent Contributor

Re: Average age of credit card accts

From what I been reading on this forum some say that if you have 5 or less cc yo dont have enough, some say carry a low balance on your cc, some say don't carry a balance at all. I'm only considering a new credit card b/c I though it would help my credit score. Theres so much different advice I'm trying to decide which is the best for me and my current situation. I have the money to pay off my balances ( which is what I just did), but now I'm hearing that I should get a Boa secured card. I have the money for that also.

 

My goal is to improve my credit score. I cleaned my credit up last year so that I could buy a house, which I was able to do (thank GOD). A couple of neg. things that are on my credit are from at least 3 years ago, so I'm working on paying those things off now (even though I didnt have to, to get in my house). At the same time I'm trying to improve my 549 fico score. :Smiley Sad: just dont know where to start.

Message 15 of 19
Anonymous
Not applicable

Re: Average age of credit card accts


@shalane85 wrote:
BTW whats wrong with store cards? I've heard someone else say stay away from store cards.

Nothing wrong except 2 things.

 

1.) In your case if you applied for one right now it would lower you AAoA even more, but that wouldn't be so bad after it aged for a year

 

2.) It's a two edged sword, if you get a high credit limit it can help your overall utilization but some banks will score you as more risky to lend to if you have a high credit limit on a non bank card. An available  $5000 limit on a Mastercard can be balanced transfered to while a $5000 jewelers card can only be used to buy $5000 worth of Jewelry that can not possibly be sold for $5000 if you get in trouble

Message 16 of 19
Anonymous
Not applicable

Re: Average age of credit card accts


@shalane85 wrote:

 At the same time I'm trying to improve my 549 fico score. :Smiley Sad: just dont know where to start.


Orchard Bank open April 2005 balance 0 limit 300

Capitol 1 open December 2007 balance 400 limit 500

Capitol 1 open June 2008 balance 447 limit 750

 

Fastest way to get a score boost. As soon as possible you want to get to:

 

Orchard Bank open April 2005 balance 0 limit 300

Capitol 1 open December 2007 balance 149 limit 500

Capitol 1 open June 2008 balance 224 limit 750

HSBC Bank open Feb 2009 balance 29 limit 300

 

If you can afford the $474 that should give you a nice boost by get your top utilization on any card you have below 30%. Low limit cards are higher maintenace in that what you can actually carry on them is so much less than what you would expect. If you had a $9000 card with that balance it would not have such a negative effect on your credit score.

 

If your balances are at least that low when you apply for a card you will have much better luck..

Message Edited by reots on 02-22-2009 03:45 PM
Message Edited by reots on 02-22-2009 03:46 PM
Message 17 of 19
shalane85
Frequent Contributor

Re: Average age of credit card accts

You know I appreciate the help. I just paid off all 3 of those accts. I do think I will try for the Boa secured card. I'm hearing to many horror stories about HSBC. But wait Orchard Bank is HSBC too! I'm **bleep** if I do and damned if I dont.
Message 18 of 19
cobaltnv
Established Contributor

Re: Average age of credit card accts

Unfortunately, once you apply and are approved the card is yours. You were approved for the card; therefore, it will show up on your reports. Others have reported that activation is not even (always) necessary. Some have reported using a card without calling to "activate". 

 


@shalane85 wrote:
I'm starting to wonder would I have been better off getting a secured bank of america card vs. the new hsbc card. Even though I was approved if I dont activate it they cant report the card, right? Only as an inquiry, right?This is really making my head hurt and I apologize in advance for asking a lot of dumb questions. I been reading alot of posts about the Boa 99/500 card or the reg secured card. Should I go for one of those instead? Or should I sit my credit eager behind down and activate the HSBC card and wait on Boa card.

 

Message Edited by cobaltnv on 02-22-2009 09:29 PM
TU 810: EQ 813: EX 814 (9/16/09--Loan officer pull)

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