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keithc wrote:
you are scaring me guys!! i was going to p/o all my cards to 0 bal!! i already p/o 2!! but i am using it as leverage to bring dowm apr's and ask for cli's. so, you must keep util. to 1%-9% to get opt. score and not pay it down to 0??
Uborrow,
If you think about this from a creditor stand point, it makes perfect sense.
Credit reports and FICO are tools to determine credit risk. Risk of lates, default and risks to PROFIT. If you do not use your credit, this is a risk to profit. Thus, FICO will not provide the maximum score because you are not actually the "ideal" credit consumer.
The ideal credit consumer has low utilization, but does have utilization, pays timely, pays far above (or mostly in full) the minimums, has aged accounts, has an aged history, etc.
The lenders have a cost to obtain new accounts....sometimes their average cost per new account can be $50-200. If you don't use it or little use it, then they won't recover costs, let alone make a profit.
ALSO: Car notes do not offset your revolving inactivity. Having an auto loan with balance, but all cc's zero balance, you will still take the FICO hit for "no recent use" of revolving credit.
@Anonymous wrote:If you think about this from a creditor stand point, it makes perfect sense.
Credit reports and FICO are tools to determine credit risk. Risk of lates, default and risks to PROFIT. If you do not use your credit, this is a risk to profit. Thus, FICO will not provide the maximum score because you are not actually the "ideal" credit consumer.
It's not a risk to profit. It's simply how can you prove you use credit responsibly if you don't use it at all? FICO scores rate your risk of default, not how much money you'll make for the CCCs.