Paying down debt and scoring (magic number?)

[ngerasimatos]

I am going to wait a few months before seeking any new credit cards (its going to be tough, but I think I can manage). I was looking at my EQ report today and saw that option for "best action" says to just pay my payments on time. I however dont have any balances (other than my car and student loan). How legit are these "best action" recommendations?

http://yfrog.com/0acaptureibaj

Also, I know there is not a specific score for guaranteed approval, but at what score are you most certainly almost 100% guaranteed to get approved for any credit you are seeking? I guess, in better words, is there a magic number?

I am trying to position myself to get some big CL cards as I am looking to form an SCORP before the end of the year and will be needing those credit lines. 

[vanillabean]

ngerasimatos wrote:

"I am going to wait a few months before seeking any new credit cards (its going to be tough, but I think I can manage). I was looking at my EQ report today and saw that option for "best action" says to just pay my payments on time. I however dont have any balances (other than my car and student loan). How legit are these "best action" recommendations?"

If your monthly credit card statement shows a non-zero balance, then you have a balance, and you are encouraged to PIF it (Pay In Full) by the due date, which is the "best action" and as such very "legit". Additionally, the CRAs cannot tell if you PIFed or carry a balance from the prior cycle, because they don't know how much you paid.

If you PBS (Pay Before the Statement cycle date, the last day of the cycle), then you have no balance a.k.a. a zero balance (provided there are no posted charges between you PBS and the statement cycle date. This is an even better action, I think.

"Also, I know there is not a specific score for guaranteed approval, but at what score are you most certainly almost 100% guaranteed to get approved for any credit you are seeking? I guess, in better words, is there a magic number?"

I 'm not aware of any known clear cut for guaranteed approval for any given card. If there is, I'd like to hear about it.

[haulingthescoreup]

For your first question, "pay all your bills on time" just means that you need to accumulate more clean history and continue to increase your AAoA. As you know, acquiring more CC's will drop your AAoA even more, so be judicious if you feel that you really have to have additional cards.

What's your AAoA now? (It's especially useful to figure it out in years and months, instead of just the years that you see on a myFICO report.) One useful rule of thumb is to wait to add an account until you know that it won't drop your AAoA by a year, from 4y to 3y for instance. It will still delay getting your AAoA higher, but at least it might save a drop to a score bucket for those with younger credit.

You might also want to go back to the sim and try different scenarios --3 months, 6 months, getting a new card, and so forth.

The sim projections are by no means cast in stone, especially when it comes to score estimates. But the tactics are pretty good indicators of what you ought to be doing.

On screen 2, what are your negatives, in order? If there is anything that you can correct on that list, that's a worthwhile target. And if one of the negatives is "short history," the cure for that is time and no (or very, very few) apps.

It's very instructive to compare the negatives lists with the sim projections on reports.

[ngerasimatos]

I have no negatives listed currently. The main factors putting my score at a 721 are my AAoA and the recent number of new accounts opened. 

[haulingthescoreup]

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@ngerasimatos wrote:

I have no negatives listed currently. The main factors putting my score at a 721 are my AAoA and the recent number of new accounts opened. 

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By "negatives", I meant those factors listed over on the left on screen two, not necessarily lates, etc.

So short AAoA and lots of new accounts are the current problems. I think it would be worth your while to calculate your AAoA for all three reports (assuming that there is different info on each) in years and months, and then calculate the effect of opening one new account, then two, then three and so forth. This can give you a better idea of when to make a move.

For those of us who hate figuring AAoA in yy/mm, lol, the full reports directly from Equifax kindly provide this number. As far as myFICO reports go, 4y 1m and 4y 11m both report as 4 years. If I knew that I was a month or two away from gaining a full year on my AAoA, that would definitely made me slow down on apping. It's painfully difficult to get that figure back up after multiple apps.

[ngerasimatos]

Your first revolving account was opened 6 Years, 10 Months ago. Is that AAoA?

You have not established a long revolving credit history.

Your FICO score measures the age of your oldest revolving account [?] and the average age of your revolving accounts. In your case, either your oldest revolving account was opened recently or the average age of your revolving accounts is relatively low. People who do not frequently open new accounts and have longer credit histories generally pose less risk to lenders. Therefore, as your credit history lengthens and you pay your bills on time, this factor should have less of a negative impact on your score.

[haulingthescoreup]

No, that's your oldest revolving account, which may or may not also be your oldest overall account.

If short history is appearing as a negative, they usually give you two figures, one for oldest account and one for average. It might look something like this:

Your oldest account was opened
20 Years, 11 Months ago
Average age of your accounts
4 years

FICO High Achievers [?] opened their oldest account 19 years ago, on average.

Most FICO High Achievers [?] have an average age of accounts between 6 and 12 years.

You can also check over on the Credit-at-a-Glance screen for your oldest account age.

eta: Your history figures might also appear over on the positives side, depending on the overall order of your score factors.

[ngerasimatos]

Length of Credit History: 9 Years , 8 Months 
Average Account Age: 3 Years, 9 Months 

[vanillabean]

ngerasimatos wrote:

"Length of Credit History: 9 Years , 8 Months
Average Account Age: 3 Years, 9 Months"

I don't see that as something to worry about, although it on the other hand does not inspire applying for several cards at this time.

I also don't see that whatever number of cards you have at this time should be a problem. (The more recently you applied for cards, the fewer I assume you have in total.)

In short, I'd suggest that you primarily PBS to increase your 721.

[ngerasimatos]

Total open CCs is 6, one car loan, and one student loan.