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How bad did i mess up?

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Anonymous
Not applicable

How bad did i mess up?

I keep reading that having "toy" limits can be worse for your credit. I am currently trying to rebuild after a messy divorce and BK. I have cleaned up everything I can thanks to this site. My question is, I have just recently starting applying for credit. I would like to get a mortgage next May, so I figured doing the hard pulls now won't effect my FICO in a year from now

 

I currently have:

 

local FCU (partially secured) CC: 2k <--opened 9/09, was told would fully unsecure this sept.

Union Plus CC: $300 (secured) <--opened 11/09, was also told would unsecure in a year of good payments

Cap1: $500 No AF <--4/10

Best Buy RWZ: $500<--4/10

Hooters: $300<--4/10

 

Ok. Before you scold me...I am definately done applying for credit. I'm just wondering how bad these low limit cards will hurt or if there is any other suggestions on how to rebuild. I should also mention I have an installment loan also from 12/09 and I ALWAYS PIF my CC's and NEVER use more than 20% of available balance. Do you think my scores will go up for a suitable mortgage loan? My FICO's currently are (as of today) 677 TU and 639 EQ....TIA

Message 1 of 10
9 REPLIES 9
Anonymous
Not applicable

Re: How bad did i mess up?

Scold you????  No way!  You're doin' fine.  Plus, you're rooting for Ohio!!  How good is that???

 

Don't worry.  "Toy" limits don't affect your FICO score.  You will sometimes see comments like that on FAKO score sites - ignore them.

 

FICO does look at utilization, however that utilization is factored by the balance reporting on your cc's.  It doesn't matter how much of your available credit you use during the month, or even if you PIF.  What matters is what balance is reported to the CRA's.  For your cards, they are probably reporting on the statement date - so make sure the balance on your statement date (not your due date) is the balance you'd like to see reported.  And for highest scores, report $0 balance on all cards but one.  The card that reports a balance should report less than 9% of the CL.

 

Your Cap One is your only Bank Card - so hold on to that one.

 

And calculate your AAofA - that will help you know how important it is to stick with your goal of "done applying for credit."

 

If there is any damage to your scores, it will be from opening new accounts and AAofA; not from the "toy" limits they may have.  Point in case:  DH had an 800+ EQ FICO score with only one CC ($500 "toy" CL). 

 

Good luck on working toward that mortgage next year - I bet you'll do great!  Your scores in your siggy look like your making great moves.

Message 2 of 10
jeffery581
Established Contributor

Re: How bad did i mess up?

"Toy" limits can do just as much damage in default as a higher balance card. So why wouldn't they help boost your score?

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Message 3 of 10
ottergo4
Contributor

Re: How bad did i mess up?

 Ohio, I agree with beamMEup that you're doing great. A lot of people here would love to have that array of cards. One thing though Beam- isn't Hooters' only card a Mastercard issued by Merrick making it a bank card also.

Message 4 of 10
Anonymous
Not applicable

Re: How bad did i mess up?

Thanks so much guys! I feel so much better! And yes..GO BUCKS!! Smiley Happy My AAoA is only 4 years, but I still have 2 of the newer CC's not showing up yet, so that will drop.

 

Beam~ I'm kind of condused about the whole statement thing. How do I figure out when it cuts? I have just been practicing the following: On my $300 cards I put no more than $20 on (gas) on my $500 cards, no more than $40, and my 2k card, no more than $200 ( I try but sometimes it is more, my highest has been $400). I would like to figure out how to pay them before they report.

 

Another question~ should I try for a retail card also? I've read FICO likes an array of revolving credit, not sure if a retail card is that much different according to FICO. Like I said, I'm planning on getting a mortgage next May. So I have a year to optimize my credit to the best I can, with having a BK (9/07)

 

Thanks to everyone!! I love this place!!!

Message 5 of 10
Anonymous
Not applicable

Re: How bad did i mess up?

 


@Anonymous wrote:

 

Beam~ I'm kind of condused about the whole statement thing. How do I figure out when it cuts? I have just been practicing the following: On my $300 cards I put no more than $20 on (gas) on my $500 cards, no more than $40, and my 2k card, no more than $200 ( I try but sometimes it is more, my highest has been $400). I would like to figure out how to pay them before they report.

 

Another question~ should I try for a retail card also?


 

2 ways to figure this: On your statement, somewhere it will have something saying "Cycle end date" or "for Period ending". This date is your statement cut date. PIF before this to avoid balances reporting

 

NO! Retail cards report as bank cards (if you're lucky) or Consumer Finance Accounts (If you're not). You do not want a Cons. Fin. Acct showing up on your CR if you can help it- it may get treated as a Red Flag.

Message 6 of 10
Anonymous
Not applicable

Re: How bad did i mess up?

Good to know. Thanks! I will just let my accounts age for a year and hope for the best!!

Message 7 of 10
fused
Moderator Emeritus

Re: How bad did i mess up?

 


@Anonymous wrote:

 

NO! Retail cards report as bank cards (if you're lucky) or Consumer Finance Accounts (If you're not). You do not want a Cons. Fin. Acct showing up on your CR if you can help it- it may get treated as a Red Flag.

FWIW, in FICO scoring, a revolving account is never considered a CFA. On the other hand, installments might be considered a CFA or a CFL (consumer finance loan), and they might affect FICO scores.

 

Message 8 of 10
Anonymous
Not applicable

Re: How bad did i mess up?

 


@Anonymous wrote:

Scold you????  No way!  You're doin' fine.  Plus, you're rooting for Ohio!!  How good is that???

 

Don't worry.  "Toy" limits don't affect your FICO score.  You will sometimes see comments like that on FAKO score sites - ignore them.

 

FICO does look at utilization, however that utilization is factored by the balance reporting on your cc's.  It doesn't matter how much of your available credit you use during the month, or even if you PIF.  What matters is what balance is reported to the CRA's.  For your cards, they are probably reporting on the statement date - so make sure the balance on your statement date (not your due date) is the balance you'd like to see reported.  And for highest scores, report $0 balance on all cards but one.  The card that reports a balance should report less than 9% of the CL.

 

Your Cap One is your only Bank Card - so hold on to that one.

 

And calculate your AAofA - that will help you know how important it is to stick with your goal of "done applying for credit."

 

If there is any damage to your scores, it will be from opening new accounts and AAofA; not from the "toy" limits they may have.  Point in case:  DH had an 800+ EQ FICO score with only one CC ($500 "toy" CL). 

 

Good luck on working toward that mortgage next year - I bet you'll do great!  Your scores in your siggy look like your making great moves.


Are you sure about that? I always thought it was based on your overall CL of all your cards combined. ugh, I'm letting my $100 CL card report a $20 balance because my combined CL is $500 so thats less than 8% . Smiley Sad

 

Message 9 of 10
Anonymous
Not applicable

Re: How bad did i mess up?


jaystay wrote:  Are you sure about that? I always thought it was based on your overall CL of all your cards combined. ugh, I'm letting my $100 CL card report a $20 balance because my combined CL is $500 so thats less than 8% . Smiley Sad

 


FICO looks at individual card usage as well, so you may see a score bump if you get that card's usage - now at 20% which isn't bad - down to 9% or lower.  YMMV - DH can do quite a bit with his card balances without seeing much of a change in score.

Message 10 of 10
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