High Credit Score, But Only Revolving Debt?

[Anonymous]

Hi Everyone!

This is my first post.  I've searched the forum but haven't been able to find out much information to answer my question.

For the first time I am fortunate to only have revolving credit card debt (always paid each month) as well as regular utility liability, and no car or home payments.  I see that Account Mix impacts credit score, and I currently have 834 before the mortgage goes away next month.  Is there a way to retain a high score without taking on debt I simply don't need?  Thanks!

[Anonymous]

I'm not entirely sure I understand the question but I have an 800+ credit score with ZERO debt. No mortgage. No CC balances. I've bought 2 brand new cars that have been paid off.

[Anonymous]

It looks actually like this may have been posted in the wrong forum if a moderator wants to move it to Understanding FICO socring (my mistake!)

Thanks for your rsponse!  I'm told that the mix of accounts is part of the credit store calculation.  I also think eventually the accounts go away from the history (like 10 years perhaps), so I think that the mix I've had and the history of what I've paid off is relevant now.  I'm not sure what will happen over time.  I've had auto loans and mortages paid off, but now I'll just have a small number credit cards that are used each month and paid off.  One has a hidden tradeline, but I thien have three regular cards plus a couple of store cards.

I'm just wondering if there's a way to maximize credit ratings in these circumstances.

[newhis]

I think here is nothing you can do right now to avoid the drop. I guess you will stay over 800 but that depends on your profile.

If you want to take most of the points back, you can get a small secured loan for 5 years, pay it down to less than 9%. See here:

http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Adding-an-installment-loan-the-Share-Secu...

[Anonymous]

This is a great response to my question.  I wish FICO could take into account liquid holdings as a measure and lifetime accomplishments (paying off car loans, mortgages, etc.) as a factor, when it doesn't seem like it does.

[Revelate]

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@Anonymous wrote:

This is a great response to my question.  I wish FICO could take into account liquid holdings as a measure and lifetime accomplishments (paying off car loans, mortgages, etc.) as a factor, when it doesn't seem like it does.

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Except financial wealth has nothing to do with whether you'll pay back that car loan or not.

If anything from the very very few people I've talked to in the upper echelons of wealth here in America, their credit is all worse than mine was; of course, they don't have the proletariat problems that I have when I ran straight up against something I couldn't simply write a check for (mortgage).

Well maybe they do but their line is way the hell higher than mine when we're talking near billionaire strata.

[Anonymous]

Yeah, that's exactly what I'm saying.  It's too bad that if you have the ability to pay very clearly, that should help, but we're getting on a tangent.

Beyond the installment loan we mentioned, are there any ideas?

[Anonymous]

Having a mostly paid off Share Secure loan (total amount owed < 8.99% of original loan amount) should mitigate most of the score loss.

As a matter of fact, you'd be a big help to the community here if you could show us that it completely mitigated it.  There's been speculation that FICO gives you some scoring benefit for having a mortgage.  If your SS loan caused you to completely reverse the score loss, it would help us answer that claim.

As far as revolving balances go, you can certainly get some points by making sure that most of your cards report a $0 balance with your total utilization being small, like < 5%.  You mention that you always pay your cards in full (awesome choice) but that is different from keeping your reported utilization low.  One can pay in full but still have utilization around 30-40% or even quite a bit higher.

[Anonymous]

The $500 SSL technique is all you need to maintain your scores wherever they currently are, even post-mortgage.

[driftless]

I am deeply troubled that a $500 loan can replace a mortgage for FICO scoring.