03-25-2008 07:09 PM
How does not using most of the cards you have affect the scoring ? I have about 6 or 7 but only use 1 of them for almost everything (amex,high CL), one for everything that doesn't take amex and one at a department store that issues it. The rest never really gets used. I always pay the cards in full. Should I use the rest of the cards for small amounts? Or don't bother ?
03-25-2008 07:18 PM
I agree that closing accounts is not the best idea. Apparently, your CS is affected by the length of time you have had accounts open and the number of inquiries for new accounts. The longer you have had an account open the better. The fewer inquiries the better. I used to close accounts so that I could open others with better rates but this had the effect of lowering my credit score.
03-25-2008 09:07 PM
03-25-2008 10:23 PM
03-25-2008 10:34 PM - edited 03-25-2008 10:40 PM
I'd be inclined to agree with you if I didn't pay off all of my cards each month but since I do, closing CCs can't change my utilization percentage. Closing cards that I had for a long period of time affected the average length of time I have had (open) credit cards. A lower average lowered my score.
Closing cards that I had for a long period of time affected the average length of time I have had (open) credit cards. A lower average lowered my score.
"Average length of time of open credit cards" is not a metric that FICO uses. Neither is "average age of open accounts" or anything to that effect. There is only "average age of accounts," which includes all accounts, open and closed.
03-26-2008 06:06 AM - edited 03-26-2008 06:11 AM
03-26-2008 06:28 AM
Number of accounts does matter as well, but only once you have very many accounts.
My two cents: For FICO scoring, as I understand it, is about utilization and age, so the number of accounts will not matter.
However, hasn't Capital One been bad about reporting your Max limit? This will hurt your score if they don't.
As far as getting a mortgage (need help from a mortgage loan officer) doesn't having too many cards, with a high overall credit limit, hurt your chances on getting a mortgage?
03-26-2008 10:18 AM
03-26-2008 10:32 AM
Thanks for the clarification cheddar. I have been paying off my balances before the statement cuts. That must be the reason for the inactive status on my cards. Regarding your comment: "The score drop you referred to was not due to lower average age, but was most likely due to higher utilization.", I still don't understand since I do pay off my cards before statement dates so it can't be higher utilization.
03-27-2008 10:26 AM
IMPORTANT INFORMATION: All FICO® Score products made available on myFICO.com include a FICO® Score 8, along with additional FICO® Score versions. Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more
FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.