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Question about applying for a credit card to raise score with high balances and a 739 score

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Anonymous
Not applicable

Question about applying for a credit card to raise score with high balances and a 739 score

Hello,


I have a score of 739, no lates, and would like to reach a score of 800.  I'm sitting at 1500 used on a credit card out of 2200.  I'm trying to pay that down to raise my score and simulators say I should get close to 800 if I pay it off.  However I'm thinking if I apply for a credit card I could then raise my total credit available thus reducing my % owed, do a balance xfer with 0% int rate and knock out the 1500 that way.

 

Anyone have any suggestions?  Thanks!

Message 1 of 6
5 REPLIES 5
madmann26
Valued Contributor

Re: Question about applying for a credit card to raise score with high balances and a 739 score

You can possibly take a hit for new credit as well. Don't forget about this.

Current FICO 9 Scores



Message 2 of 6
scarrollprint
Frequent Contributor

Re: Question about applying for a credit card to raise score with high balances and a 739 score


@madmann26 wrote:

You can possibly take a hit for new credit as well. Don't forget about this.


What the simulators often ignore is that when you add in a new tradeline, your also adding an inquiry (couple point loss right there) and your also basically adding in a 0 to your AAoA which may or may not have a big swing.

 

Lets say you have 3 accounts, all 3 years old (36 months each) your AAOA would be 36 months. If you go in and add a brand new card (even if its calculated as 1 month old for the first month your AAoA would drop to 27 months. Thats a 10 month drop which isn't THAT bad still over 2 years.

 

Lets say you have 1 account thats 3 years old - you go in and add that extra card, your now dropping down to 1.5 years thats a much bigger dip and the simulators usually dont' take that into considertion, they just take into consideration the Util aspects.

 



Current: Eq- 624 Ex - 631 (lender pulled) TU - 661 (lender pulled)
Goal 700+ across all three
Message 3 of 6
Anonymous
Not applicable

Re: Question about applying for a credit card to raise score with high balances and a 739 score

Thanks!  That was great information.  I have over 9 years of credit history on my report currently but as far as 'active accounts' go this is the only active credit card account I have and it's been about 3 years.  Thus would I factor it in 3 years divided by 2, or all of my previous accounts that are closed now within the past 9 years, then divide that number by the new one (old number +1 for the new CC)?

Message 4 of 6
scarrollprint
Frequent Contributor

Re: Question about applying for a credit card to raise score with high balances and a 739 score


@Anonymous wrote:

Thanks!  That was great information.  I have over 9 years of credit history on my report currently but as far as 'active accounts' go this is the only active credit card account I have and it's been about 3 years.  Thus would I factor it in 3 years divided by 2, or all of my previous accounts that are closed now within the past 9 years, then divide that number by the new one (old number +1 for the new CC)?


Your AAOA is based on accounts (closed or open) that are still on your report.

 

So If you have a card thats been closed for 6.5 year then as soon as they drop so will your score.

 

You should be able to just take the 9 years (108 months) add 1 and then divide by the number of accounts closed or open that are on your report.
 You shouldn't see a major drop when your at the 9 year mark with mutliple accounts - not like its going to drop from 1 year or anything.
 But like I said be mindful of when they drop off because once they do they won't be calculated in - but also by that point you should have gained a couple years on your open accounts now.

 

Thats sort of why its suggested to not really fire a card until you've apped for a new one - the old one stays on your report while your aging the new account.

 



Current: Eq- 624 Ex - 631 (lender pulled) TU - 661 (lender pulled)
Goal 700+ across all three
Message 5 of 6
Anonymous
Not applicable

Re: Question about applying for a credit card to raise score with high balances and a 739 score

Thanks guys, that was very useful information.  I'd better apply for a card fast then so I can start aging it.

Message 6 of 6
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