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is it bad to get a store loan?

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Anonymous
Not applicable

is it bad to get a store loan?

I know you get the usual inquiry if you apply for any credit anywhere--but I want to know, is it ok to get a loan from a store to get 90 days same as cash financing, or you know--pay zero interest for a few months or something, get the loan--will that hurt your fico alot, or well it drop at first and then help as they see you paid it off?
Message 1 of 10
9 REPLIES 9
MidnightVoice
Super Contributor

Re: is it bad to get a store loan?

FICO is reputed to like a mix of credit, and the CL on a store card will increase your util.
 
FICO does not like too many revolving accounts, too many inqs, too many new accounts or too low an average age of accounts.
 
So it really depends on what you have already.
The slide from grace is really more like gliding
And I've found the trick is not to stop the sliding
But to find a graceful way of staying slid
Message 2 of 10
Anonymous
Not applicable

Re: is it bad to get a store loan?

it all depends- it's all about the UTL and what your short/long term FICO goals are.
Let's take my DW's home depot card-
She has a 2K CL and we make a $500 purchase w/ 12 mo SAC offer.
This would put her at 25% utl - not the best UTL and we make payments to pay it off before 12 months is up and pay no interest.
 
A $1000 purchase would really tank her UTL.
 
We also have $75 a month that goes into a home improvment account - and we pay this from that account.  

rifleman wrote:
I know you get the usual inquiry if you apply for any credit anywhere--but I want to know, is it ok to get a loan from a store to get 90 days same as cash financing, or you know--pay zero interest for a few months or something, get the loan--will that hurt your fico alot, or well it drop at first and then help as they see you paid it off?


Message 3 of 10
fused
Moderator Emeritus

Re: is it bad to get a store loan?



rifleman wrote:
I know you get the usual inquiry if you apply for any credit anywhere--but I want to know, is it ok to get a loan from a store to get 90 days same as cash financing, or you know--pay zero interest for a few months or something, get the loan--will that hurt your fico alot, or well it drop at first and then help as they see you paid it off?

If the store loan is a consumer finance loan (sub-prime), FICO scores could go down.
Message 4 of 10
Anonymous
Not applicable

Re: is it bad to get a store loan?

nah, actually I realized it's a store card, not a consumer fiance loan...
Message 5 of 10
fused
Moderator Emeritus

Re: is it bad to get a store loan?



rifleman wrote:
nah, actually I realized it's a store card, not a consumer fiance loan...


good thing!
Message 6 of 10
MercyMe
Frequent Contributor

Re: is it bad to get a store loan?

Midnight, I have a question ...  The only store cards I have are Home Depot and Target, and I just received notice that as of 7/31/2007 my Red Card ($500 limit) will be replaced with the Target Visa ($1000 limit.  I didn't ask for this).  Is this a bad thing?  Do I need to try to open another store card? 
 
Just me
Message 7 of 10
Anonymous
Not applicable

Re: is it bad to get a store loan?



@MercyMe wrote:
Midnight, I have a question ... The only store cards I have are Home Depot and Target, and I just received notice that as of 7/31/2007 my Red Card ($500 limit) will be replaced with the Target Visa ($1000 limit. I didn't ask for this). Is this a bad thing? Do I need to try to open another store card?
Just me





Not sure what this question is about? Are you trying to keep a 2 Retail card limit? This card was just converted from a charge card to a credit card. Hehe. This is very good! Please post if score changes from this. Thanks.
Message 8 of 10
MercyMe
Frequent Contributor

Re: is it bad to get a store loan?

Love ... No, I'm not trying to keep a retail store card limit.  It's just the way my credit apps worked out that I ended up with more credit cards than charge cards.  No one would give me a charge card ... not Walmart, not Sears, only Target and Home Depot.  I never applied for any others because by then I had a fist full of Visas and Mastercards.  Target informed me about a week ago that they were changing my store card to a Visa.  Because I'll have another Visa, doesn't this reflect badly on the mix of credit the CRAs look for, as I will then only have 1 retail?  If I'm going to need more retail to make a good mix, then I will HAVE to shut down some Visas and MCs!!  Too much is too much, already!
Message 9 of 10
Anonymous
Not applicable

Re: is it bad to get a store loan?



@MercyMe wrote:
Love ... No, I'm not trying to keep a retail store card limit. It's just the way my credit apps worked out that I ended up with more credit cards than charge cards. No one would give me a charge card ... not Walmart, not Sears, only Target and Home Depot. I never applied for any others because by then I had a fist full of Visas and Mastercards. Target informed me about a week ago that they were changing my store card to a Visa. Because I'll have another Visa, doesn't this reflect badly on the mix of credit the CRAs look for, as I will then only have 1 retail? If I'm going to need more retail to make a good mix, then I will HAVE to shut down some Visas and MCs!! Too much is too much, already!



Not everything is good for the mix. I'm not sure about Retail cards. I think when you have many credit cards the store cards are their just there; not hurting but not helping much. I was going to test this in 2 months by applying for a gas card. Gas cards are Retail charges too and figured safer than store cards with auto scoring models. If you cancel your credit cards to fill with store cards you might see a score drop. You have 1 retail card, doubt a second will help more. But keep an eye on your score after the card is switched over to see what happens.
Message 10 of 10
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