Having Store Cards Necessary!!!

[Anonymous]

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@CH-7-Mission-Accomplished wrote:

I know what you are saying.  I do wonder about one thing and that is whether the age calculation takes into account the oldest open credit card or how long you have been on file.   In my case, I have been on file since 1980, so 35 years.  My oldest account is 20 years.  Unfortunately, that old account and a few more close in age will be falling off in five years when the IIB accounts drop.  So when FICO looks at me, it will see my oldest accounts as having been opened seven years.  I am just wondering if FICO will score the time I have been on file.  I don't know.

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The factor called "Age of oldest account" is the metric for determining the age of your file.  That's not the age of your oldest open credit card, but rather the age of your oldest account currently on your report, whether that account is open or closed, revolving or installment. 

In your case, it sounds like your oldest account currently on your report is 20 years old.  Therefore the age of your profile right now, from a FICO or Vantage perspective, is 20 years (not 35). 

Five years from now, it sounds like the 20 year old accounts will have all dropped off, and the oldest account currently on your report will then be seven years old.  Therefore the age of your profile, from a FICO or Vantage perspective, will have dropped from 20 to 7 years.

[Thomas_Thumb]

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@CreditDunce wrote:

The only FICO model I know of that counts store cards differently than other credit cards is the NextGen score.  NextGen gives bonus points if you have both store cards and normal credit cards.  It counts as credit mix with NextGen.  I believe that is why so many people believe you need store cards help your credit mix.  IMO your NextGen score isn't important enough to add a store card.

Your auto insurance score is hurt if you have store cards (or at least too many store cards).  Not all states allow credit scores to be used in setting your auto rates and not all insurance companies use credit scores.  However, it is something to think about before you go on a SCT spree.

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I have both open and closed store cards on file. I do not have an open or a closed Auto loan on file. Negative impact, if any, seems to be very slight when comparing to Bankcard scores. I attributed the difference to lack of an Auto loan in my file history.

Fico 08 Auto scores are EQ 884, TU 897 and EX 889.

[jamie123]

I read an article years ago where a reporter was interviewing someone from FICO about what it takes to get a perfect 850 score.

The FICO representative stated the "average" person with an 850 score has these items on his reports:

5 to 8 credit cards with the oldest being at least 10 years old and the youngest at least 2 years old.

One old auto loan that is closed and showing perfect payment history.

One open auto loan that has been paid on time for at least 2 years.

One 30 year mortgage that has been paid on time for at least 10 years.

One HELOC that currently has a $0 balance.

If you look at these requirements it is not so far fetched that most of us on these forums, given enough time, can achieve a perfect 850. There have been people on this forum that tried to get to 800 as fast as possible. It seems that you need an AAoA of 3 years to get to 800.

[Revelate]

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@jamie123 wrote:

I read an article years ago where a reporter was interviewing someone from FICO about what it takes to get a perfect 850 score.

The FICO representative stated the "average" person with an 850 score has these items on his reports:

5 to 8 credit cards with the oldest being at least 10 years old and the youngest at least 2 years old.

One old auto loan that is closed and showing perfect payment history.

One open auto loan that has been paid on time for at least 2 years.

One 30 year mortgage that has been paid on time for at least 10 years.

One HELOC that currently has a $0 balance.

If you look at these requirements it is not so far fetched that most of us on these forums, given enough time, can achieve a perfect 850. There have been people on this forum that tried to get to 800 as fast as possible. It seems that you need an AAoA of 3 years to get to 800.

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Yeah well, I don't know about the pink when we're talking FICO 8 and the auto loan information as well.... and HELOC's are their own ugly wildebeast.  Unfortunately not sure we have enough detail on the files of our various 850's to really make any sort of analysis on the 2 year mark for that matter either.

Unfortunately I read these statements kind of like the reverse engineering Credit Karma has used on their own grades: just because the typical 850 has these on the report, doesn't mean that's what it takes to get there.

@OP: there's been zero evidence that store cards help one's profile.  Conversely there's only been one report that I've seen that they harm one's profile too, and I don't know the quality of that data point.  Eventually I will close my Walmart card once my file gets stable again and with my flatlined scores this year (assuming I do it before the inquiries start falling off next July, or my paid collection comes off next June come to think of it... hello April!) maybe we can get something useful out of it.

[Anonymous]

My open auto loan is 1.5 yrs old.

I have a closed auto loan 4.5 years old

I have a closed auto loan 7.5 years old.

yes, that's a pattern

[Revelate]

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@Anonymous wrote:

My open auto loan is 1.5 yrs old.

I have a closed auto loan 4.5 years old

I have a closed auto loan 7.5 years old.

yes, that's a pattern

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Laugh!  

Out of curiosity, what is your installment utilization these days on EX?  I assume your revolving utilization is uber pretty too?  That 1.5 year old account though sort of crushes the idea that the youngest account has to be at least 2 years old though.

[Anonymous]

my contract at work requires a vehicle no more than 3 model years old and less than 100,000 miles.  I am usually in the 90s at 3 years.

I'm just under 80% on the auto loan

2 mortgages, 2 properties

1 at 40%

1 just under 90%

mortage installment "utilization" under 64%

overall installment "utilization" just over 65%

revolving less than 1%

as soon as all 3 are clean, I'm going to provide some data on utilization effect on my scores and number of cards reporting even though I only have 3

[Anonymous]

Thom Thumb's profile crushes the idea that you need an open car loan and a closed car loan.  Since he has no car loans of any kind, open or closed.

[Thomas_Thumb]

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@Revelate wrote:

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@Anonymous wrote:

My open auto loan is 1.5 yrs old.

I have a closed auto loan 4.5 years old

I have a closed auto loan 7.5 years old.

yes, that's a pattern

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Laugh!  

Out of curiosity, what is your installment utilization these days on EX?  I assume your revolving utilization is uber pretty too?  That 1.5 year old account though sort of crushes the idea that the youngest account has to be at least 2 years old though.

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The 2 year minimum certainly does not apply to installment loans based on Inverse's data. Not sure if revolving credit or mortgages are treated the same way from an account age perspective. Personal loans and car loans are often only 3 years in duration - so a 2 year age minimum would be problematic [for a robust risk model] when applied to short duration installment loans.

It also appears that aggregate balance on installment loans to original loan can be above 60% for a top score. There is a breakpoint somewhere be it 70%,  80% or 90% - I am leaning toward 70% based on CAPTOOL's prior post.

[Revelate]

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@Anonymous wrote:

my contract at work requires a vehicle no more than 3 model years old and less than 100,000 miles.  I am usually in the 90s at 3 years.

I'm just under 80% on the auto loan

2 mortgages, 2 properties

1 at 40%

1 just under 90%

mortage installment "utilization" under 64%

overall installment "utilization" just over 65%

revolving less than 1%

as soon as all 3 are clean, I'm going to provide some data on utilization effect on my scores and number of cards reporting even though I only have 3

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Interesting, thanks for the information senor!  Guess there may even be more of a buffer at 850 than even I'd thought.