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Super Contributor
concorduser
Posts: 6,025
Registered: ‎09-18-2007
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How does charge account and credit account differ for fico scoring

I thought all the credit cards are the same. Today I found out fico treats the charge account different from credit card.
 
I have cards from Spiegel/dillards/macys/jcpenny and couple of other cards reporting as charge card on all there CRA's when I looked up my report through TrueCredit.
 
How does these cards  differ from visa/mc or Credit card for the fico scoring?
What is it I should do and should not do with the charge cards?
I usually do a PIF. Is it ok to do with these cards or not?
How does util works with these cards?
Do I have to keep them under 10% as fico suggests?
As I understand when we open a Credit card card it dilutes the age of the accounts. Does the charge cards have the same negative effect on the scores?
 
 
Could you please help me understand how to use and make the best use of these charge cards to get the best out of them to boost my fico Score.
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Timothy
Posts: 9,252
Registered: ‎03-19-2007
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Re: How does charge account and credit account differ for fico scoring

Spiegel/dillards/macys/jcpenny are revolving cards- They are called retail or store cards.

When talking about "Charge" cards, that usually refers to cards tha must be PIF each month like a "Amex Green"

TC must be on crack if they are showing them differently today.
Super Contributor
concorduser
Posts: 6,025
Registered: ‎09-18-2007
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Re: How does charge account and credit account differ for fico scoring

Hi Timothy, here is the entry from TrueCredit. It says Charge Account. So is other 4-5 accounts. They are referrred as Charge Account. Also in the Credit Cards Forum there is a thread going on that states the store cards are scored differently comparing to credit cards. I would like to know what kind of scoring difference is there between store cards and credit cards.
 
- 
Established Contributor
Dawn
Posts: 557
Registered: ‎10-07-2007
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Re: How does charge account and credit account differ for fico scoring

[ Edited ]
I don't know if it means anything or not, but this is how my reports reflect Dillards, Lerner, NY&Co, Penneys, Sams (Kohl's is the only "store" card I have that is reported as "credit card" and this seems to be because it was issued by a bank - Chase.)
 
EQ CRA Report
Type of Acct: Revolving
Loan Type: Charge
 
EQ MyFico Report
Credit Type: Revolving
Descriptions: Charge
____________________
 
EX CRA Report
Type: Revolving
 
EX MyFico Report
Credit Type: Revolving
Account Type: Revolving Charge Account
_____________________
 
TU CRA Report
Account Type:  Revolving
Loan Type:  Charge Account
 
TU MyFico Report
Credit Type:  Revolving
Account Type: Charge
 
TU TrueCredit Report
Type: Charge Account


Message Edited by denbar2003 on 11-26-2007 08:30 AM
Moderator Emeritus
psychic
Posts: 1,518
Registered: ‎04-20-2007
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Re: How does charge account and credit account differ for fico scoring



concorduser wrote:
I thought all the credit cards are the same. Today I found out fico treats the charge account different from credit card.
 
I have cards from Spiegel/dillards/macys/jcpenny and couple of other cards reporting as charge card on all there CRA's when I looked up my report through TrueCredit.
 
How does these cards  differ from visa/mc or Credit card for the fico scoring?
What is it I should do and should not do with the charge cards?
I usually do a PIF. Is it ok to do with these cards or not?
How does util works with these cards?
Do I have to keep them under 10% as fico suggests?
As I understand when we open a Credit card card it dilutes the age of the accounts. Does the charge cards have the same negative effect on the scores?
 
 
Could you please help me understand how to use and make the best use of these charge cards to get the best out of them to boost my fico Score.


I don't know if this will help at all, but I remembered this one post-- 
 
                                                      
fused wrote on 8-26-2007
           Visa, MC, Discover and AMEX (revolving, not charge cards) are bank cards and it doesn't
           matter if you have three of the same or one of each...they're equal and in FICO scoring
           carry the same weight.
 
           Store cards are not bank cards and having 1 or 2 does help with your credit mix.  Bank cards
           carry a lot more weight in scoring than do store cards.  How much, well nobody knows...it's     
           FICO's secret. 
EQ 814 / TU 815 / EX 842
Established Contributor
Dawn
Posts: 557
Registered: ‎10-07-2007
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Re: How does charge account and credit account differ for fico scoring

[ Edited ]
 
To answer a few of your questions, in CDIA's Consumer Reporting Resource Guide there are different codes for cards issued by Banks, CUs, and Travel & Entertainment industries (non-retail cards)  than for retail (store exclusive) cards. 
 
So, for those scoring models that give different weights to the different types of cards, there is a code to identify them.  As others have mentioned, no one knows how much emphasis FICO scoring models place on "credit cards" issued by non-retail businesses vs "charge cards" issued by retail businesses.
 
As I mentioned in another post, I have numerous "charge" cards listed on my report that are store exclusive retail cards and are showing as "charge account" on some of my reports. The field for this data is missing on some reports so all I see is a field that states "revolving." 
 
I went back and reviewed my reports and the MyFico EQ report uses the currently reporting charge accounts' CLs when calculating my utilization (even when I haven't used the cards for many, many years.) 
 
They are either using a code to specify "inactive" accounts that are no longer reporting, or are evaluating the last date reported to determine which open accounts are "inactive."  The "charge" accounts that are no longer reporting (even though they are open) are not factored into my utilization. 
 
 


Message Edited by denbar2003 on 11-26-2007 07:30 AM
Super Contributor
concorduser
Posts: 6,025
Registered: ‎09-18-2007
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Re: How does charge account and credit account differ for fico scoring

Thanks Denbar / Pyschic for the input. I still dont understand if having a store card is good or bad. For now I think I have 6 store cards. I'll leave them as they are for now. Make a purchase every other month and PIF on each card. Let it happen what ever happens 6 months from now. There is no point in worrying for what we dont know.
 
Do you have any idea as to how the scoring works as per the lates and chargeoffs?
 
I have some paid/chargeoffs I am not sure what their effect on my fico.
 
1. Some of them just show paid/charge off. No lates.
2. I have some show p/coff and some 30 lates, some 60 lates, some 90 lates.
3. I have one account that shows p/co and with 0 Balance 28 90+ lates.
 
Many of them in invalid entires and I am in the process of disputing them now. Is there any way to know which one is hurting the score most so I can take care of them first. Fico report it just shows a flag. Does not indicate any severity to prioritize the disputes. 
Established Contributor
Dawn
Posts: 557
Registered: ‎10-07-2007
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Re: How does charge account and credit account differ for fico scoring

I don't think the store cards are bad ... just not as beneficial as bank cards are.  I don't know how many other revolving cards you have, but I am under the impression that having balances report on 4 or fewer revolving TLs is better than more.  And ... when you need a score boost, having revolving utilization report between 1-9% is best. 
 
Someone else will need to address your other concerns as they are things I have never dealt with.
 
Good luck!
Super Contributor
concorduser
Posts: 6,025
Registered: ‎09-18-2007
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Re: How does charge account and credit account differ for fico scoring

Thanks denbar. I have to figure out few more things on my accounts. I guess we all learn some thing new every day.
Moderator Emeritus
psychic
Posts: 1,518
Registered: ‎04-20-2007
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Re: How does charge account and credit account differ for fico scoring

[ Edited ]


concorduser wrote:
 I still dont understand if having a store card is good or bad. For now I think I have 6 store cards. I'll leave them as they are for now. Make a purchase every other month and PIF on each card. Let it happen what ever happens 6 months from now. There is no point in worrying for what we dont know.
 


Store cards can be beneficial in some ways.  On my FICO reports, both Equifax and TransUnion remark that one factor helping my score is the fact that "You have an established credit history...Your FICO score was helped because you have a relatively long credit history."  Both reports state that "Your oldest account was opened 29 years ago."  The 29 year old account cited is a store account with Saks Fifth Avenue.  Having this store card is obviously helping my FICO scores.
 
Like denbar2003, I really can't help you with your other questions regarding lates and charge offs. 


Message Edited by psychic on 11-25-2007 10:15 PM
EQ 814 / TU 815 / EX 842

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