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Which is it, too much or too little available credit?

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dihydrogen
Member

Which is it, too much or too little available credit?

First of all, I can see CC utilization has been asked about a zillion times... so this will be a zillion +1.

 

My TU "Summary" says this...
  Total Accounts: 19
  Open Accounts: 6
  Closed Accounts: 13
  Delinquent: 0
  Public Records: 0
  Inquiries: 1

 

My TU "Trending Analysis Balances" says this...

  o Revolving: $1383
     (HSBC/Menards, Opened = 03/30/09, Balance = $0, Limit = $7500)
     (Dell, Opened = 12/01/05, Balance = $0, Limit = $7000)
     (Chase MC, Opened = 03/03/94, Balance = $1383, Limit = $18,800)

  o Installment: $11601 (truck loan)

  o Real Estate: 26084 (mortgage)

 

My TU "Credit Score & Analysis" says this...

 

  Your Credit Score: 774

 

  Here's where you can improve:

 

  o There are too many personal finance accounts on your credit report. Having too much available credit can sometimes harm your credit score. Lenders may feel that you have the ability to spend more than you could potentially pay back. You might want to consider closing a few accounts or asking to have your credit limits reduced. Avoid closing too many accounts - especially the oldest accounts on your credit report - because it could harm your credit score. Closing the oldest accounts can damage your score by making the length of your credit use appear shorter.

 

  o Your installment account balances are too high in comparison with your credit limits. Having credit available to you is a sign that you are able to manage your finances responsibly. Lenders like to see that consumers have a large amount of credit available to them, but not so much that they could spend more than they could afford to pay back. If you currently have multiple accounts open with high balances, try reducing your balances below 35 percent of your limits. If you do not have many open accounts, consider opening a new credit account or asking your creditors to increase your limits.

 

  o There are not enough accounts in good standing on your credit report. Having credit available to you is a sign that you are able to manage your finances responsibly. Lenders like to see that consumers have a large amount of credit available to them, but not so much that they could spend more than they could afford to pay back. If you currently have multiple accounts open with high balances, try reducing your balances below 35 percent of your limits. If you do not have many open accounts, consider opening a new credit account or asking your creditors to increase your limits.

 

"There are too many personal finance accounts on your credit report." WTF????

 

"Your installment account balances are too high in comparison with your credit limits." WTF????

 

"There are not enough accounts in good standing on your credit report." WTF????

 

Aren't all three of the above paragraphs contradicting each other?

 

Credit Karama says this...

 

"Open Credit Card Utilization"

 

  Grade C

  Credit Score Weight: High

 

  Credit card utilization is defined as your total credit card balances divided by your total credit card limits. The utilization percentage is often correlated to your credit score.

 

  Credit Card Utilization: 0%
  Open Credit Card Debt (w/ Limits Reported): $0
  Credit Card Limit: $33,300
  Open Credit Card Debt (w/o Limits Reported):$1383

 

How in the hell can 1383/33300 = 4% utilization be bad????  Grade C ???? 0% is high????

 

I HAVE NEVER EVER MISSED ANY PAYMENT OF ANY KIND IN 50+ YEARS!

Message 1 of 12
11 REPLIES 11
haulingthescoreup
Moderator Emerita

Re: Which is it, too much or too little available credit?

Hi, welcome to the forums!

 

Where did you get your score and report? I suspect that this isn't a FICO score. I'm not familiar with a "trending analysis", unless it's on the TU Quarterly Monitoring product offered here.

 

If this didn't come from FICO, it's what we call a "FAKO." Plenty of entities --often credit bureaus --are delighted to sell you credit "scores" that aren't used by lenders. And since the formula that they use to create these scores isn't the same formula as FICO uses, you can get bogus reasons and even bad advice.

 

It says that you currently have 6 open accounts, but I counted 3 CC's, 1 auto (truck) loan, and 1 mortgage. Am I missing one?

 

Again, if this is something from a myFICO product, I apologize. There are just some unfamiliar elements in there.

* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
Message 2 of 12
dihydrogen
Member

Re: Which is it, too much or too little available credit?

Thank you for the Welcome!

 

"Where did you get your score and report?"

 

From here...


Dear Class Member:

 

As part of the terms of your Class Action Settlement with TransUnion, you’ve received a six month subscription to TransUnion Credit Monitoring, fulfilled by TrueCredit.  Register now and start enjoying the benefits of credit monitoring right away!  You’ll get:

 

  • The ability to lock your credit report so third parties, such as lenders or other companies, will not be able to access your credit report without your consent (unless allowed by law);
  • Unlimited daily access to your Trans Union credit report and credit score; and
  • Credit monitoring with email notification of critical changes to your credit report.

 

Ready to get started?

 

Your registration number is <xxxxxx>. Be sure to enroll soon as your registration number is only available for a limited time.  Please note that our records indicate that you also registered for the potential cash benefit.  A final determination as to whether there will be a distribution of the cash benefits and, if any, the amount of any distribution, will not occur before September 2010 and could occur as late as October 2011.  You may visit the website xxxxxx for updates regarding this potential benefit.

 

Sincerely,

 

TransUnion List Class Action

Settlement Administration


 

"It says that you currently have 6 open accounts, but I counted 3 CC's, 1 auto (truck) loan, and 1 mortgage. Am I missing one?"

 

The TU report lists a 2nd Chase MC.  Back in 02/1994 I had someone steal my card # while on vacation.  I had Chase cancel/replace the MC with a new/different MC card.  It still says it is open and a $18,800 credit limit.

 

Message 3 of 12
haulingthescoreup
Moderator Emerita

Re: Which is it, too much or too little available credit?

A-ha! Then you've got a FAKO. At least it's free, lol.

 

Back when I subscribed to TU's TrueCredit monitoring service, I used to get lots of wacko comments like these. And occasionally, they even gave advice that I knew would hurt my FICO scores, had I followed it. I learned to check the reports themselves (which are accurate) and ignore the scores and especially the commentary, which can seriously mess with your mind.

 

I'm guessing that your FICO TU is somewhere in the 780 - 800 range (which is all you need.) If you were to pull your FICO score, you would probably only be given one negative comment, because FICO thinks high scorers are weenies who can't handle the sight of four negatives. Smiley Wink Even that one negative probably isn't really affecting you. It's just that everyone has a list of negative factors. Those with lower scores have negative factors that are really making an impact. The higher your score goes, the less impact any listed negatives have. It's like saying (fill in the name of the most attractive person you can think of) has a crooked left fourth toe. Well yeah, it's there, but who cares?

 

Check the list of FICO reason codes stickied up at the top of this forum. These are the factors that are actually evaluated in creating FICO scores.

* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
Message 4 of 12
dihydrogen
Member

Re: Which is it, too much or too little available credit?

Hmmm, Credit Karama also reports a 774 "score" and a Grade C because of the low utilization.

 

Since Credit Karma is using FAKO, does it use the same stupid "logic" about low/zero low utilization?

 

Regarding FICO utilization, I get the impression that a very small balance is better than $0?

 

Or if your FICO score is "Excellent", it really does not make that much difference??

Message 5 of 12
haulingthescoreup
Moderator Emerita

Re: Which is it, too much or too little available credit?

In my experience, TU FAKO credit score reports always urged me to get more accounts and to use them more. lol, no thanks!

 

I don't know if the duplicate Chase card is counted for your FICO revolving utilization. But the way that you calculate it is to first add all reported balances (those showing on your credit reports, not your balances after you pay), and then add all the total credit limits, and divide the first figure by the second.

 

You do best with util at 9% or less, and with only 3 (or 4) open CC's, you should only let one report a balance, and then pay it off if that's the plan. When all CC's report $0, you usually lose points, at least on Equifax FICO. TransUnion FICO doesn't seem to mind if you have high scores, and who knows what Experian FICO does these days.

 

As you say, you're already in the "Excellent" category from just doing what you do, so you don't really need to change anything. If you're not in the market for new credit, you can do like normal people do, allow your CC balances to post on your statements (and thus to your credit reports), and then pay them off. That way you aren't paying interest, but you ARE showing higher utilization, which can drop your FICO scores.

 

If you're getting ready to apply and want to max your scores, or if you're just like many of us and like to fine-tune things, pay off all your CC's a few days before each one's statement is due to post, except leave about $10-20 on one card. Let that balance show up on the statement, and then be sure to pay it off before the due date. (It's easy to forget this step!) In this manner, you're showing that you aren't afraid to use your credit, but you're in control of it, and you keep your balances minimized.

 

This can be kind of a PITA, needless to say, but I like the thought that my scores and reports stay as good as possible, in case some credit-related surprise pops up, either an unexpected disaster or an out-of-the-blue opportunity. Also, I'm pretty massively ADHD, and the only trouble I had in the past was with late payments. Paying early like this adds a cushion of time that helps me avoid any repeats.

* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
Message 6 of 12
dihydrogen
Member

Re: Which is it, too much or too little available credit?

I just ran my Eq report (annualcreditreport.com).

 

The "Credit Summary" says...

  o Revolving: Open = 3, Balance = $546, Available = $13954, Limit = $14,500, Ratio = 4%, Accounts w/Balance = 1

 

(The TU report has 4 open revolving, but one is an error.)

 

My EQ "Accounts > Revolving Accounts" says...

  o Open Accounts
     HSBC,  Balance = $0,     Limit = $7500
     Dell,      Balance = $0,     Limit = $7000
     Chase, Balance = $546, Limit = BLANK

 

WTF, my Chase card is now an AMX card... no limit... looks like an error to me!

Message 7 of 12
haulingthescoreup
Moderator Emerita

Re: Which is it, too much or too little available credit?

Is your Chase card either a Signature (Visa) or World (MC) card?

 

These are marketed as "no pre-set limit" cards, and we're supposed to be excited and grateful to get them. But the vast majority of them do not report a CL, because of the no pre-set limit bit.

 

It's a problem, since if you have any balances reporting, including on this card, it obviously lowers your total credit limit for the purposes of calculating util.

 

Interestingly, EQ is showing a 4% util. I'm assuming that it's using $546 / $7500 + $7000 + $0, which would be 3.77%, rounded up to 4%.

 

I doubt that you're being hurt by this, since you have such a low reported balance. But it could definitely be a problem if you ever let a higher balance report.

 

And there doesn't seem to be anything that consumers do about this, other than request/ demand conversion to a non-Sig/World card. Perhaps lenders will one day learn to report these correctly, but I doubt that enough of us know enough about our credit to be more than a minor annoyance to them. Smiley Mad

* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
Message 8 of 12
dihydrogen
Member

Re: Which is it, too much or too little available credit?

My Mastercard card says "Chase Sapphire" and it says "World" in the lower right corner above the Mastercard logo.

 

The piece of paper the Mastercard card was stuck to says "Your Chase Sapphire Card has arrived" and "Credit Access Limit $18.800".

 

When I login to my account at chase.com, it says "Chase Sapphire with Ultimate Rewards" and "Total credit limit $18,800.00".

 

Is your Chase card either a Signature (Visa) or World (MC) card?

 

not sure???

 

So, can I asked Chase to resubmit/refresh this Mastercard card info with the three CRAs?

 

Or, ask my credit limit to be changed to $19,000 or $18,500?

Message 9 of 12
haulingthescoreup
Moderator Emerita

Re: Which is it, too much or too little available credit?

It's a World card, and like too many World cards, it does not report a CL on credit reports, even though you have one.

 

You can try to get them to report a CL, but I don't think that they will.

 

The only alternative is to ask them to re-issue it as a non-World card, such as a Platinum or whatever the non-World name is used with Sapphires. If there is one --that might be a World-only card. If you were to do this, you would want to make sure that it would keep the same account number, or if not, show the same opening date and not appear as a new/ additional tradeline (account.)

 

As long as your reported balances remain low, you might want to just leave it as is. Every time you try to get a lender to do something, you run the risk of them monkeying it up, or deciding that they don't like you after all and do something unpleasant (close the card, reduce the CL, etc.)

 

Some World cards do report properly. My USAA World MC does, and I've read that some BofA World cards do as well. But it looks like yours is not one of them.

* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
Message 10 of 12
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