Perfect Scores or More Accounts

[Anonymous]

I hope I have selected an appropriate forum; mods please feel free to move if there is a better spot. I’m torn. I know that nobody is going to be able to make my decisions for me but I’m soliciting viewpoints as I try to do it for myself.

In my first board post about 2 weeks ago Our Forums' High Achievers I talked about the scores I had just pulled. They are in my sig and still accurate. The list of actives is small:

SWA Visa – 30k; 2 yrs old; PIF every month; usually has ~1000-1,500 activity

BOA Rewards Visa – 17.5K; 14 yrs old; rarely used; will charge something soon to maintain

BOA Visa – 6K; 12 yrs old; rarely used; will charge something soon to maintain

Discover CB Rewards – 4K; rarely used; will charge something soon to maintain

Macy’s AMEX – 1.3k; 10 yrs old; occasional use

Car Loan – 17K baklance; 4 yrs to go

Mortgage – about to sell the house and will be renting for 6-9 months

The oldest accounts on my report are:

Chase CC – 5k EX: 18.5 yrs old; listed as closed on EQ and not on TQ or TU at all

Mortgage – 17.5 yrs old; closed but still on all 3

Finance Co loan – 11 yrs old; closed but sill on all 3

One of my three inquiries will be gone at the end of July. The other two are for the car and will be off in June 2017.  There will likey be a new HP for renting in the next month or two.

I am a 50ish male, divorcing after 5 years; the only common items are the current mortgage and a 1k overdraft protection on the joint checking that will soon be closed.

The source of the tear is whether to open one or more new accounts to increase total CL and begin the slow process of aging them or to press on with trying to squeeze out those last few points to get all 850’s while I have it in my sights. If more accounts are the way I go, my thinking of only potentially high-limit accounts such as NCFU, PenFed, Lowes, etc. but am open to other and all suggestions. My calculations indicate that adding one new CC would drop my AAoA by a year to ~7.

I am now very aware that I need to be protective of the BOA accounts and not let them close, as they are my oldest actives. The 17.5k limit was reduced from 35k many years ago when the company “cleaned up” a lot of underutilized high limits across the board.

I’m expecting the house to be sold as early as June/July 2016 and I’m reading here that I may actually take a hit from that, making the 850 pursuit a moot point for the time being. I may buy again late this year or early 2017; another hit and a factor in whether to open additional accounts. Sometime between now and then, I’ll need to buy some furniture and am not sure whether it’s worth the hit to finance at 0% via a store card or to take the points on my SWA and PIF. Probably Rooms2Go, Nebraska Furniture Mart, The Dump, etc. I wouldn’t even consider more than one account for this purpose. Thoughts here?

I had considered paying off the car but that is now off the table for the moment given that it would leave me with no revolvers and throw off my balance of accounts. It’s a 1.9% loan so I am frankly not terribly worried about it. I suppose I could pay it down to 5k or something if I wanted to.

I’m a little confused as to why those oldest accounts are still showing up and I’m concerned as to the score impact if they fall away.

So there are some basic facts. Input, guidance, advice and opinions are welcome. There is no right answer but there are certainly seasoned perspectives to be considered and I thank you in advance for sharing them.

[Anonymous]

My immediate thought (aside from potentially having to apply for a mortgage again) is that regardless the 850 will never be around forever. If you want to screen shot it while it lasts, I sort of understand that. But I'd recommend that you do what you want and not focus on a number like that. If you're close to that number, you're in the top top top of creditworthiness already and are considered least risky.

Just do what you want to do with yourself. Obviously, if a mortgage might be coming not too far away, you may want to chill out anyway and wait until you know for sure.

That's my thinking. I understand the pursuit of perfection. It appeals to me as well, but eh. It won't lost forever. Probably won't last a month or two. May never even happen...

[RonM21]

First, nice scores! If you decide fo get more accounts, getting high limits would make sense for your profile. But they'll most likely be offered anyway with your scores.

[Anonymous]

Opening one or two accounts may not necessarily drop your scores. With Fico scoring your files can get to a point where they are bullet proof. Or at least immune to small arms fire such as one or two new accounts. A friend of mine has similar scores, although a little longer on the AAoA and a little older on the oldest account. When she opened three new CC accounts she saw no drop in scores at all.

In addition, there is a lot of anecdotal evidence that those with 850 scores may have some padding in there. In other words, 850 is simply the number at which the score stops visibly increasing, but there may be some extra points in there providing a cushion.

I’m expecting the house to be sold as early as June/July 2016 and I’m reading here that I may actually take a hit from that, making the 850 pursuit a moot point for the time being.

Is that the mortgage you said is already closed? If so, you will not see a hit.

[Anonymous]

@CAPTOOL Not the same mortgage.  Previous one is still reporting.  I have a current which will be paid off soon, that's the one I was wondering about a hit from.  I have read some here say that, even though it reports for a while, there may be some initial hit and gradual drop from the diminishing value of the record once closed and the absence of an open mortgage record.  The latter should resolve when I buy again.

Thanks for the feedback on impact of opening new accounts.  This perhaps supports the possibility of looking for one or two accounts where I could maximize the HP (like getting both a high limit card and CLOC @ NCFU).  If there was a way to be sure of the CL to be offered before the HP that would be great.  Ideally I'd wind up with a 30k Flagship and a 15k CLOC.  I'm also seeing 20-30k as immediate CLI on Lowes cards, that's why I was considering them in the mix.  I'm assuming the CLI would not be a 2nd HP if done immediately following approval.  I'm also cautious to keep the CL on each at 30k max as I have read here that accounts over that amount may not report at all in some cases.

So many moving pieces.  I think that's probably part of what makes me want to max the scores, gamification.

[Anonymous]

From your current card descriptions, it doesn't look like you need a new card for spending and you don't need one for scoring. So I'm not sure why you're looking for a different one. 

Since you have at least 3 different credit types reporting for several years, I'd guess that you could get to perfect scores by tweaking your utilization slightly and seeing what effect each tweak has. While the general consensus is between 1-9% utilization on one card is ideal, you can play around with the exact percentage that gets you the best scores. 

Scores typically lower when accounts are completely paid off and when new accounts are opened, but you have so much variety and history on your report that the drop shouldn't be much. Also, a new mortgage when you buy again will keep the scores high after the account ages a year or two.

[Anonymous]

Not that my opinion matters much here, and it's obviously your decision, but I say in your situation who cares about score.  Anything from 760-850 is essentially the same and can get an individual almost anything with respect to credit.  If you were on the fence of a 760 score your decisions would matter more as they could bump you down into a non-top score... but where you are, it's all kind of trivial.  820 vs 830 vs 840 vs 850, to me, is all feather-fluffing and chest-puffing; in the real world the difference doesn't matter.  If it matters to you, that's fine and you can chase and hopefully acquire that "perfect" number.  To me, though, once in the upper 700's that's all that really matters as even taking a minor hit still has you in that upper tier regardless.  Do whatever you feel is the right thing.

[takeshi74]

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@Anonymous wrote:

The source of the tear is whether to open one or more new accounts to increase total CL and begin the slow process of aging them or to press on with trying to squeeze out those last few points to get all 850’s while I have it in my sights

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Why are you concerned about getting 850's?  Don't put the cart before the horse by letting score drive your decisions.  Make decisions that work for your financial needs and health.

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@Anonymous wrote:

If more accounts are the way I go, my thinking of only potentially high-limit accounts such as NCFU, PenFed, Lowes, etc. but am open to other and all suggestions. .

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Why are you focused on high limits?  High limits will come if your credit profile and income support them.  Don't rely solely on the creditor.  Again, select products that suits your requirements.  Don't let limits drive your decisions.

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@Anonymous wrote:

I am now very aware that I need to be protective of the BOA accounts and not let them close, as they are my oldest actives. 

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Read the Closing Credit Cards thread linked in the Helpful Threads sticky in the Credit Cards subforum.  Average Age of Accounts is not immediately impacted by closure.  You don't have to keep your oldest accounts open to build credit and you're well beyond where you need to obsess over building IMO.  However, it's certainly your call to make on all of this.

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@Anonymous wrote:

I had considered paying off the car but that is now off the table for the moment given that it would leave me with no revolvers and throw off my balance of accounts. It’s a 1.9% loan so I am frankly not terribly worried about it. I suppose I could pay it down to 5k or something if I wanted to.

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What are you looking to apply for that you wouldn't qualify for with lower scores then where you are now?  Keep in mind that with FICO 8 best terms are generally offered in the 740-760 range.  Anything above that is gravy and you have a lot of margin even if you lose a few points from paying off your only open installment.  Auto loans are installments, not revolving accounts.

Again, don't let score drive your decisions.  If it makes sense to pay off the auto loan and not pay the additional interest you'd incur thne pay it off.  It's not just about score.

[Anonymous]

Thanks for the input, food for thought from all.  I do realize scores are just numbers and a slight increase will make no practical difference.  I also pay attention when my odometer approaches milestones I find interesting.  

[bada_bing]

As far as the argument that > 800 scores are just meaningless numbers, they are at least as meaningful,

and less potentially hazardous than the obsession with credit limits > $100k that is common around the 

forums. Neither mean much, but one of them can't get you in trouble. An 850 score is fairly easy to parley

into >$100k total limits if really wanted (given even average income), but the converse isn't true.

The last few points to 850 can take a lot of time to resolve. Small take always that are obscured by bigger 

issues in other profiles can be maddening to discover. In my case it was getting under 80% LTV on my

refi-ed mortgage that made the difference. I can have small balances on every one of my cards and still

report 850. $100 over 80% LTV on a mortgage that is only 30% of appraisal held me out 3 points. 

One thing to consider is that 850 scores aren't as rare as some think, about 1,000,000 people (about one in 200

profiles) scores 850. It gives a little incentive to mind a credit report that otherwise might be ignored because

there is nothing attractive to app for, so it has a little psychological value. If you have something you want that

isn't just a whim, I'd app for it and worry about the 850 later.