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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!
You can possibly take a hit for new credit as well. Don't forget about this.
@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.
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)?
@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.
Thanks guys, that was very useful information. I'd better apply for a card fast then so I can start aging it.