Impact of Overdraft Line of Credit on FICO Score

[OptimalFICO]

My FICO scores are just over 800. No mortgage, 1 paid auto loan, 1 new auto loan, student loans paid in full. I have 1 Macy's CC and 1 Chevron CC (I don't use either). For CCs I have 2 AmEx and 3 Visas (one Visa card is new). I only carry a balance on one of the AmEx cards.

I  just opened a $5,000 overdraft line of credit for my checking account.

How is the overdraft line of credit factored into the FICO scoring model? Will it hurt?  My score? Should I refuse the line of credit and close it  -- or should I reduce the line of credit to $500? Or????

I also want to obtain 1 MasterCard and 1 Discover Card -will this result in my having too many credit cards and thus reduce my FICO score long term? What if I just obtain 1 MasterCard?

Thanks in advance for any input! I have worked hard to get my score above 800 and I don't want to screw it up!

[RobertEG]

 Once you get a LOC, it is scored as a revolving account, but not as CC revolving debt.  I know it is scored lower, but am not sure how much.

I presume you did this for financial, and not just FICO, reasons.

Its limit vs how much you later take on as debt under the LOC will factor into your % util, but not the same as a CC.  Much lower impact.

I am puzzled about your question as to reducing the 5K LOC you have secured.  You have already secured it, and it is part of your credit file.  If you call the creditor and ask to change the terms of your contract, they will be as puzzled as I am, and probably do a new hard inq on your credit file.  If it is already open, it is probablky too late to "refuse" it.

If it is alredy open, and you dont need the cash from it for financicial reasons, my advice is to just not use it.

If you have a FICO score of 800, and dont need new credit for financial reasons, why do you want any new credit cards?  Each will add to a lowerng of your AAoA, a new inq, and only add the chance that, once opened, may lead to your % util on one of them from bumping your FICO down.

If your FICO is now 800, you HAVE optimal FICO, 

IMHO, I would just mix a marguerita and enjoy it.

[OptimalFICO]

Thank you for your reply. I really appreciate your help!

I did not open LOC for financial reasons (I am fortunate enough to have no debt and pay all bills in full each month) -- opened sheerly for FICO score increase. Basically I paid off my used auto loan and then took out another used auto loan so that I would have an ongoing mix of credit types to maintain my FICO score as my student loans are paid and may be aging off my credit report. Auto loan is with Pentagon Fed CU and they suggested I get any products I would want at one time under one credit inquiry.

I mainly use AmEx Blue Cash and pay it in full each month, occasionally FNB Omaha Bucks Back Visa for vendors not accepting AmEx. I have Simmons First Fixed rate visa and AmEx green, but I only use them a few times a year to maintain activity. I don't care for FNB Omaha's customer service and they raised card interest rate without cause so I accepted Pentagon Fed CU's Cash Back Visa because it's got cash back comparable to AmEx Blue Cash. I figure I will no longer use FNB Omaha Visa.

I asked about reducing the Pent Fed $5K LOC because I literally just opened it three days ago and thought if having the $5K LOC will hurt my FICO score then I'd tell them I found out it would hurt my FICO score and that I no longer wanted it or wanted it reduced to $500 which creditors would then basically ignore as basic overdraft? So from what you are saying, I should just not use it.

Here's my scenario:

AmEx Green since 1992 - Bal $0

AmEx Blue Cash since 1992 CL $20K- Bal $0 (I charge approx $1-2K per month and pay it off each month)

FNB Omaha Bucks Back Visa since 2007 CL $15K- Bal $0 (sometimes charge $20-100 and pay it off each month)

Simmons First Fixed Rate Visa since 2007 CL $7,500 - Bal $0

Macy's since 1992 - Bal $0

Chevron since 1992 - Bal $0

Several student loans paid in full

Auto Loan paid in full 2009

Pent Fed CU Auto Loan since July 2009 Bal $10K

Pent Fed CU Overdraft LOC $5K since July 2009 Bal $0

Pent Fed CU Cash Back Visa CL $15,700 since July 2009 Bal $0

What is AAoA? I was going to open a Discover or MasterCard because those are the only cards Sam's Club accepts and I don't have either.

My Macy's card reports as active, but I hadn't used it for so long they won't let me charge without doing a credit inquiry. I thought maybe I would just cancel the card and keep my Chevron. Or do you think I should let Macy's do the inquiry and keep the card even though I dont' use it?

My other thought process was that if I have a few Visas, opened around the same time, it may hurt my score in the short term, but with 800 FICO I have wiggle room for that and in the long term, it gives me the leverage to close an account in the future if a company doesn't act honorably without jeopardizing my length of credit. Also, I got the 7.25% fixed rate visa in case I ever need to carry a balance. I got the FNBO Visa for vendors that didn't accept AmEx -- now I will use the Pent Fed CU Visa instead for this purpose.

Am I over thinking all of this? Where's that margarita?! Thanks in advance for whatever insights you can offer.