revolving accounts

[crapandgarbage]

this forum is great!!!!! lots of good info.

i have several accounts on my cr. equifax reports 26 accounts, 21 good standing, 3 collections (you do the math).

i want to do something to raise my fico scores but my understanding is that closing accounts is not always a good thing.  I am paying off cc with higher interest rates first.

is it a good idea to ask for the complete removal of some of the revolving accounts that are already closed but are in good standing.  i have some closed cc's because of no activity with very low limits.

is the number of revolving accounts on my cr that important if the accounts are closed? 

should i remove some the revolving accounts even if they are in good standing but closed?

good or bad???? thinking about trying for 2 or 3 0% interest cards for as much time as i can get to  transfer balances to cut down on interest. will applying for the cards hurt me more than the good of having 0% interest for about 6 months?

[Anonymous]

I would say you rarely, if ever, would benefit from the removal of ANY revolving account in good standing, open or closed.

[haulingthescoreup]

Have we wrestled you through Credit Scoring 101 yet?

http://ficoforums.myfico.com/fico/board/message?board.id=ficoscoring&thread.id=2654

I STRONGLY advise people not to start trying to clean things up until they read this thread. Also, read Closing Credit Cards:

http://ficoforums.myfico.com/fico/board/message?message.uid=41393#U41393

[haulingthescoreup]

Once you get through all that, you will find that one of the most immediate and useful things that you can do is pay off more than half of your open revolving accounts. The rest of the cards (the ones that DO report) should show 9% or less of their respective credit limits. So a $1000 card should only report $90 or less. You need to understand the reporting cycle, so that you know when each card should have which balance.

Read, read, read!

[crapandgarbage]

thanks for the advice. i did read the fico 101 thread.

you mentioned understanding the reporting cycle. do i need to call each cc company to see when they report? should it usually be after the billing cycle?

[haulingthescoreup]

Usually, they report on the statement drop date --the date that it posts, which is usually around 2 1/2 weeks before the due date. HSBC reports at the end of the month, and others have completely different times.

Do you have access to any credit reports that show the actual date that each account is updated? I use TrueCredit, which shows mm/dd/yyyy on EX and TU, but not on EQ. You might do a free trial offer, if they have one going on. You don't need to look for an entire month, unless you have brand new reports. Any of the pulls will show whatever the most recent activity is, so that will cover the last 31 days or so.

Anyway, once you know the date, pay online 4-5 days before it's due to report, and then keep checking to make sure no other charges pop up. Once it has posted, you can PIF it and start all over again. Remember that on most cards, the statement date rambles around a bit each month.

You can use your card as much as you like (or they'll let you) and pay your account down multiple times a month, as long as you have the timing down. As many cards as you have, you might even keep all but 2 or 3 cards PIF'd, and just let those report. Air each card out every 6 months or so to keep the CCC happy.

I just got a nice score jump on TU doing this. Good luck!

[crapandgarbage]

because revolving accounts are factored in on UTL, is it a good idea to take an installment loan to lower the UTL percentage. can moving some of the balance to a loan actually increase your score because your UTL is lowered?

[haulingthescoreup]

Yep, and people do it all the time. You get credit for having an installment loan (helps your credit mix), and it frees up the util over on the revolving side.

You would want to go with a trustworthy lender, like a credit union, and explain that you are interested in a loan that would NOT report as a consumer finance loan. Some of these are really obvious, like if you get a loan from CitiFinancial, or Wells Fargo Finance --the "finance" in their names give them away. Others are murkier. And there is nothing on your credit report that you can see that will tell you. But they are coded in such a way that the FICO scoring algorithm recognizes them as CFL, and your score is hurt. So ask the lender how the loan would be coded, and listen and watch to determine if they really know what they're talking about.

BUT anyone who goes this route should do some serious self-analysis to figure out how they got in CC trouble in the first place, and what they are doing now and will be doing in the future to keep it from happening again. Otherwise, they will wind up with a big installment loan plus a set of maxed-out CC's. And it does happen!

[Anonymous]

Greetings,

You seem to have a good knowledge base. So I figured I ask your opinion!! I only have two revolving credit cards, Amex Optima$1400, Best Buy Reward Zone $300. I just paid the reward zone off with the exception of $30 bucks. I will be paying Amex off completly within a week or so. Do you think I should see some sort of bump in my FICO in the next couple of months of reporting. Oh, side bar I have 30x3 late pays recently which sent me tanking 30 points each with EX and EQ (sent goodwill letters off).

Kelly

[haulingthescoreup]

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@Anonymous wrote:

Greetings,

You seem to have a good knowledge base. So I figured I ask your opinion!! I only have two revolving credit cards, Amex Optima$1400, Best Buy Reward Zone $300. I just paid the reward zone off with the exception of $30 bucks. I will be paying Amex off completly within a week or so. Do you think I should see some sort of bump in my FICO in the next couple of months of reporting. Oh, side bar I have 30x3 late pays recently which sent me tanking 30 points each with EX and EQ (sent goodwill letters off).

Kelly

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Hi, Kelly! You should see a bump, depending on where the util was before you paid. My TU score jump below was partly due to having fewer than half of my cards report, even thoug I was already at 2% util. But the recent lates are going to be an anchor on your scores until 2 years go by. I'm in exactly the same boat.

BTW, I don't know if anyone has experimented to find out if there is a different score for exactly 10% versus under 10%, so I always go with 9% or less to be sure. It's probably a petty difference, if there is any difference at all, but I'm desperate for every point I can squeeze out!