08-16-2013 09:47 AM
I was looking at the FICO algorithm and comparing it to my current credit profile. I see that FICO is more forgiving on thin credit files with 6+ credit cards versus 3-5. I, however, only have 5 credit cards and 4 charge cards. Are charge cards considered credit cards according to FICO or are they not taken into consideration?
What do you mean by more forgiving on thin credit files if you have 6+ cards?
There is a FICO score spreadsheet that simulates how FICO is affected by aging of accounts, opening of new accounts, etc. This speadsheet indicates that 3-5 credit cards has a lower starting score than 6+ credit cards on the FICO algorithm. I'm not sure if that is 100% accurate though.
That brings me back to my original question: are store cards considered credit cards according to this model? Currently, I only have 5 actual credit cards (two of which are Visa Signature that report credit limits) and 4-5 store cards. Should I be applying for another credit card?
I believe store cards are considered credit cards and factored into AAOA and Utilization. Charge cards (depending on the FICO model) are open accounts and balances are not factored in your utilization, but it is in your AAOA.
I dont think the algorithm is 100 percent accurate.
08-17-2013 10:16 AM
I remember when Mastercard used to be Mastercharge.