Understanding FICO® Scoring

[dog]

darn it, i was hoping they would say 42 is the right number....

http://articles.moneycentral.msn.com/Banking/CreditCardSmarts/HowManyCreditCardsIsTooMany.aspx

[MidnightVoice]

"It's a tricky business, but creditors don't care, because they know you need credit. If you are a good, money-conscious consumer who pays for everything in cash, basically you are dead to them. So establishing and using credit wisely is so important," says Rhode.

[MidnightVoice]

Just remember that the street of credit fairness runs only one way, and it's in the favor of the creditors.

[ilovepizza]

This statement gives me the creepies. -20 per store credit card?

QUOTE
Beware of store credit cards

"Some people go hog-wild at Christmas and open lots of store credit cards to get that 10% to 15% off their purchase," says Cate Williams, vice president of financial literacy at Money Management International. "Relatively speaking, that is a good idea if you pay off the balance and close the card right away. If you don't, then you will be costing yourself more money in the long run when your credit score isn't up to par."

Steve Rhode, president of Myvesta, a nonprofit consumer-education organization, agrees, saying that each time you open a store credit card, 20 points are taken off of your credit score because, he says, "Historically, store credit cards are issued to anyone with a pulse. They issue credit cards to people who otherwise can't get credit."
Source

First of all they make it sound like your score will drop 20, 40, 60, 80.... points if you have a handful of store cards and it won't if you apply for Visa, MC, Dis, Amex.

Second, they don't say if it is for new apps only, or if the card always counts against you. Very misleading article. Or is it?

Were they talking about FICO?

I don't own any store cards yet. I'm still scared to apply.

[Boswd]

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ilovepizza wrote:
This statement gives me the creepies. -20 per store credit card?

QUOTE
Beware of store credit cards

"Some people go hog-wild at Christmas and open lots of store credit cards to get that 10% to 15% off their purchase," says Cate Williams, vice president of financial literacy at Money Management International. "Relatively speaking, that is a good idea if you pay off the balance and close the card right away. If you don't, then you will be costing yourself more money in the long run when your credit score isn't up to par."

Steve Rhode, president of Myvesta, a nonprofit consumer-education organization, agrees, saying that each time you open a store credit card, 20 points are taken off of your credit score because, he says, "Historically, store credit cards are issued to anyone with a pulse. They issue credit cards to people who otherwise can't get credit."
Source

First of all they make it sound like your score will drop 20, 40, 60, 80.... points if you have a handful of store cards and it won't if you apply for Visa, MC, Dis, Amex.

Second, they don't say if it is for new apps only, or if the card always counts against you. Very misleading article. Or is it?

Were they talking about FICO?

I don't own any store cards yet. I'm still scared to apply.

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I hate store cards.   Biggest ripoff's out there. 

[MidnightVoice]

Boswd wrote:

I hate store cards.   Biggest ripoff's out there. 

I have one from a local store.  0 % APR if paid off in 12 months.

10 years old, never late, great TL for TU and EQ.

[Revike]

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ilovepizza wrote:
Steve Rhode, president of Myvesta, a nonprofit consumer-education organization, agrees, saying that each time you open a store credit card, 20 points are taken off of your credit score because, he says, "Historically, store credit cards are issued to anyone with a pulse. They issue credit cards to people who otherwise can't get credit."

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This statement appears to be completely wrong. Each time you open a store credit card, you would get the usual dings for the inquiry, the new account, and average aging decrease, all of which rebound as time goes by. (Otherwise, my DW would have a score in the 500s, instead of the 730s). And stores do not issue cards to everybody, as anyone who is trying to rebuild their credit can attest.

[Boswd]

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MidnightVoice wrote:

Boswd wrote:

I hate store cards.   Biggest ripoff's out there. 

I have one from a local store.  0 % APR if paid off in 12 months.

10 years old, never late, great TL for TU and EQ.

---

What I don't like about them is normally they'll have an insane insterest rate,  it encourgages large purchases,  you can't use a store card anywhere but there thus limiting using your card wisely each month for good activity such as groceries or gas and such.  If you use it each month to maximize your FICO score that means you are more likely be purchase items you don't need thus wasting money.

The only ones' I would consider are either Lowes or a Home Depot, other's such as Kay, Macy's etc,  IMHO are just debt problems waiting to happen.  

[MidnightVoice]

Boswd - in general I agree with you.  But if there is a store you use all the time, and not for luxry items or impulse purchases, they can be OK. 

And I dare not get a Lowes card 

[Boswd]

My wife say's the same thing  LOL  LOL    " NO LOWES CARD' !!!!!!!!!!!!!   LOL  LOL