The Shock Of My First Inquiry

[Anonymous]

I was browing slickdeals.net and saw an offer for a free FiCO score with no strings attatched. I signed up and expected to see something in the 750+ range. I was perturbed when I saw a score of 691.

The low score is apparently due to a new credit inquiry (just applied for a new visa from suntrust for no apparent reason other than i wanted to have some flexibility within the next 6 months with my purchases at 0%). And also I have a short credit history (bought my car a little over 2 years ago).

Since the purchase of my car for which I have never even come close to missing a payment, I have been approved for 3400 from amex, 2800 from discover, 1000 from visa and the other visa card which is currently pending. I'm the most responsible person i know with money, i've never missed a payment and never paid interest on any of the cards i currently have.

Right now, i owe rougly half on my approximately $13,000 car loan, i'm carrying a 0 balance on my amex card (3400), my discover card is almost maxed out at 2750, and i just made a large purchase on my main visa for 750 which i will be transferring to my newer visa once it comes in the mail.

Where did I go wrong? I was always taught that even though newer cards bring your average time down and thus your score, they increase your score significantly due to the increase in available credit. Is there anything i can do to increase my score aside from paying down my discover card and just simply living longer lol?

[FLA-8]

You have a car loan and 3 new tradelines in the last two years. Your avl credit is $7500.00 with $3500.00 debt, utilizaton is at 49% plus this is maxing out two of the three cards.

Then you applied for another credit card so all these things have effected the FICO score. Length of History, Utilization and New Credit makes up 55% of your score.

Once the new tradeline reports your score should improve, if no additional debt is added.

[Junejer]

Hey juice, welcome to the forums. Please read Credit Scoring 101, if you haven't already.

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igotthatjuice wrote:

I was browing slickdeals.net and saw an offer for a free FiCO score with no strings attatched. I signed up and expected to see something in the 750+ range. I was perturbed when I saw a score of 691.

The low score is apparently due to a new credit inquiry (just applied for a new visa from suntrust for no apparent reason other than i wanted to have some flexibility within the next 6 months with my purchases at 0%). And also I have a short credit history (bought my car a little over 2 years ago).

Since the purchase of my car for which I have never even come close to missing a payment, I have been approved for 3400 from amex, 2800 from discover, 1000 from visa and the other visa card which is currently pending. I'm the most responsible person i know with money, i've never missed a payment and never paid interest on any of the cards i currently have.

Right now, i owe rougly half on my approximately $13,000 car loan, i'm carrying a 0 balance on my amex card (3400), my discover card is almost maxed out at 2750, and i just made a large purchase on my main visa for 750 which i will be transferring to my newer visa once it comes in the mail.

Where did I go wrong? I was always taught that even though newer cards bring your average time down and thus your score, they increase your score significantly due to the increase in available credit. Is there anything i can do to increase my score aside from paying down my discover card and just simply living longer lol?

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The part that I bolded is your issue right now.  You are maxxed out on a card.  FICO scoring looks at both individual and overall util.  Your overall util is over 30%.  Transferring the balance around isn't going to help.  The new card will help util, however.  For best results, keep overall util at 1-9% and allow one card to post that balance--the rest at $0.

EDIT: Out-typed by FLA.

Message Edited by ByrdMan on 01-16-2009 12:28 PM

[Anonymous]

thanks for the info ... i knew that the discover card was killing me but i had 2 purchases that i didnt plan on ... o well ill just work on paying that bad boy down ... thanks again

[Anonymous]

Lets say you have 3 cards and you keep all 3 of them at a low utilization, i.e 1-9%.

Wouldn't it be the same has having 2 cards show zero balance and the 3rd being utilized 1-9%?

Or is it better to show the zero balance on the 2 cards and have the low utilization?

[marty56]

I get the best result when only one CC reports a balane of 9% or less.  Others see the best result when less then half of their CCs report a balance but I loose points when more than 1 CC reports a balance.

It could be score bucket dependant but IMHO I would only have 1 CC report a balance these days anyway.

[haulingthescoreup]

For our two new members here, welcome, and here are two things to keep in mind:

• Don't worry about utilization on installment loans, like auto loans. It's looked at, but it's a very minor thing in scoring. You don't get much in terms of scoring by paying them down faster, and if it's your only loan, you can actually lose points when you pay it off, and you no longer have installment in your credit mix. (Might be good financially, if it's not a 0% APR loan!) If you have extra money lying around, apply it to your CC balances first.
• It's the figure that is reported to the credit bureaus, not whether you then go ahead and pay down or off your CC balance, that is used in calculating your scores. In almost every case, the figure reported is the balance that shows on your statement. So if you run up your cards, and those balances report, and then you PIF them down to $0, your score is going to reflect the high util, not the 0%.

And as marty said, aim for fewer than half of your CC's reporting balances. Fewer than that is even better, as long as they're not all reporting $0. I tried this as an experiment last month, with the results below in my siggy.

As long as you use the cards during the month and pay the balance before statement date, your cards will still be regarded as active.