cancel
Showing results for 
Search instead for 
Did you mean: 

Do store cards really lower your credit score?

tag
treefrogger
New Contributor

Do store cards really lower your credit score?

I was watching Clark Howard a bit ago, and he was advising a lady to close her store credit card to raise her credit score.

 

Is there any truth to the fact that simply having a store credit card on your record is a score-dropping negative?

Message 1 of 8
7 REPLIES 7
Anonymous
Not applicable

Re: Do store cards really lower your credit score?

Nope.

 

On the other hand, having a Consumer Finance Account (always an installment type of account) can be derogatory - although most folks believe it's a minor derog.

Message 2 of 8
Uborrow-Upay
Valued Contributor

Re: Do store cards really lower your credit score?

+1

 

I was recently out of state for an extended stay, and I had to do some Christmas shopping.  I bit on the Kohl's card offer at the register because it was going to save me 30% on the total purchase I was already making, which was substantial.  It didn't ding me a bit in the scoring, and I saved myself actual money, which is what having a good FICO score is all about...hard cash savings.

 

As beamMEup says, try to avoid CFA's.  They usually will suck out your blood anyways, regardless of perceived minor dings to credit scores.

 

 

Message 3 of 8
MarineVietVet
Moderator Emeritus

Re: Do store cards really lower your credit score?


@treefrogger wrote:

I was watching Clark Howard a bit ago, and he was advising a lady to close her store credit card to raise her credit score.

 

Is there any truth to the fact that simply having a store credit card on your record is a score-dropping negative?


I like Clark Howard and he gives some good advice IMO but i have to agree with the others on this. In this case I believe CH was less than correct.

 

 

 

From a BK years ago to:
EX - 3/11 pulled by lender- 835, EQ - 2/11-816, TU - 2/11-782

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

Message 4 of 8
Anonymous
Not applicable

Re: Do store cards really lower your credit score?


@MarineVietVet wrote:

I like Clark Howard and he gives some good advice IMO but i have to agree with the others on this. In this case I believe CH was less than correct.


I checked Clark's website and didn't find any statements similar to the one cited by the OP, so it's hard to know what Clark's specific advice and/or concern was.

 

 

Message 5 of 8
Anonymous
Not applicable

Re: Do store cards really lower your credit score?

I saw the same show a few weeks ago, and I remember him telling a lady to close her store card because a store card actually hurts your credit score.

 

That's all I remember, but I just wanted to chime in and say I saw that same show as well.

 

I have a GEMB Paypal Smart Connect Card (It's considered a Store Card) and after hearing him say that to the lady, I remember thinking to myself, hmmmm, that does not make sense, how could a store card hurt my score?

Message 6 of 8
treefrogger
New Contributor

Re: Do store cards really lower your credit score?

A woman had called in stating that she and her husband had identical reports, but different credit scores.  He advised her to pick through every line and see if anything was different, and she remembered she had one store card.  He instantly said, "Aha!, there it is.  Credit scoring looks poorly on store cards.  I bet if you close that one your score will come up."

Message 7 of 8
Anonymous
Not applicable

Re: Do store cards really lower your credit score?

Hmmmm.......I did close a few store cards last year, so I'm checking to see what the score impact was for me......

* pulls up spreadsheet - I know it's bizarro but that's where I track my FICO scores.  Hey I could have worse hobbies! *

 

When I closed my Walmart account - I waited until it reported closed and checked my FICO score.  No impact.  EQ FICO score was 709 before and 709 after.

A month later, when I closed my JCPenney account - I waited until it reported closed and checked my FICO score.  No impact.  EQ FICO 709 before and 709 after.

 

I would note that I still have two store cards open (in case that matters to anyone).

And I also noted no score impact when I closed my Orchard card (which is a bank card - but I have another one open).

 

Of course, YMM(and will)V

 

I'm not a huge fan of store cards, unless they offer you rewards and/or sales bonuses.  Otherwise, you may as well use your bank or CU card as far as I'm concerned. 

 

Clark does comment (several times) on store (or merchant) cards on his website including their potential to damage your AAofA (as opening any new account can) and he cautions folks to think before you app.  But I didn't see any comments like the one we're discussing on this thread, when I did a quick peek there.

Message 8 of 8
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.