Understanding FICO® Scoring

[fused]

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smallfry wrote:

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fused111 wrote:

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section8 wrote:

Can anyone tell me if:

CC1 $10

CC2 $10

CC3 $0

CC4 $0

CC5 $0

CC6 $0

Is better then:

CC1 $10

CC2 $10

CC3 $10

CC4 $10

CC5 $10

CC6 $10

?

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the second one is better. 1-9% util on all for max fico points.

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I don't agree. Too many accounts with balances. Leave no more than 4 accounts showing a balance including mortgages, car loans and credit cards.

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It does not matter how many open CC accounts you have as long as you pay on time and keep your util very low (1-9% util). Same goes for installment loans: mortgages, autos, student loans and unsecured/secured loans it's all about paying on time, forget about the outstanding balances, it's about making timely payments.

Message Edited by fused111 on 08-07-2007 07:57 PM

[smallfry]

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fused111 wrote:

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smallfry wrote:

---

fused111 wrote:

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section8 wrote:

Can anyone tell me if:

CC1 $10

CC2 $10

CC3 $0

CC4 $0

CC5 $0

CC6 $0

Is better then:

CC1 $10

CC2 $10

CC3 $10

CC4 $10

CC5 $10

CC6 $10

?

---

the second one is better. 1-9% util on all for max fico points.

---

I don't agree. Too many accounts with balances. Leave no more than 4 accounts showing a balance including mortgages, car loans and credit cards.

---

It does not matter how many open CC accounts you have as long as you pay on time and keep your util very low (1-9% util). Same goes for installment loans: mortgages, autos, student loans and unsecured/secured loans it's all about paying on time, forget about the outstanding balances, it's about making timely payments.

Message Edited by fused111 on 08-07-2007 07:57 PM

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It absolutely does matter how many accounts you have balances open with. A page out of the FICO handbook. FICO high achievers have an average of 3 accounts reporting balances. If you have high scores your way have at it. Rather than do it that way each month why not try paying it down to 0 one time and see if you notice any difference. You telling me that CW's with 25 cards won't see their score suffer if they left a $20 balance to report on all their cards? Check the scoring manual and you'll find 3 is optimum.

[smallfry]

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Skaluva99 wrote:

Hi,

Just wondering...

Say I have a credit limit of $8,000 on a credit card, and I have a current balance of $7,000. My debt ratio would be 87.5%, right? But, if I have other credit cards that aren't in use, and all together my credit lines equal say $50,000 my debt ratio wouldn't be so bad. This won't hurt my credit score, right? They look at your entire credit line, not just one particular card, right?

Thanks!

Steve

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Yes it will. Each tradeline is scored by itself and as part of the whole. Keep it under 10% for optimum scoring potential.

[fused]

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smallfry wrote:

---

fused111 wrote:

---

smallfry wrote:

---

fused111 wrote:

---

section8 wrote:

Can anyone tell me if:

CC1 $10

CC2 $10

CC3 $0

CC4 $0

CC5 $0

CC6 $0

Is better then:

CC1 $10

CC2 $10

CC3 $10

CC4 $10

CC5 $10

CC6 $10

?

---

the second one is better. 1-9% util on all for max fico points.

---

I don't agree. Too many accounts with balances. Leave no more than 4 accounts showing a balance including mortgages, car loans and credit cards.

---

It does not matter how many open CC accounts you have as long as you pay on time and keep your util very low (1-9% util). Same goes for installment loans: mortgages, autos, student loans and unsecured/secured loans it's all about paying on time, forget about the outstanding balances, it's about making timely payments.

Message Edited by fused111 on 08-07-2007 07:57 PM

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It absolutely does matter how many accounts you have balances open with. A page out of the FICO handbook. FICO high achievers have an average of 3 accounts reporting balances. If you have high scores your way have at it. Rather than do it that way each month why not try paying it down to 0 one time and see if you notice any difference. You telling me that CW's with 25 cards won't see their score suffer if they left a $20 balance to report on all their cards? Check the scoring manual and you'll find 3 is optimum.

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Well it's a stalemate then! You say it does matter and I say it doesn't. I use to PIF all of my CCs with no ill effect. Now I have 6 open CC's and all of them are reporting about 4-6% util and my scores improved some. In fact two of them are in the 755-792 range. I think the point of all of this is max fico points. For some members a few extra points earns them a better mortgage rate or an approval for a CC or some other loan. If your not planning on applying for credit in the near future, then I think like you, PIF.

[ilovepizza]

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smallfry wrote:

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section8 wrote:

Well, that brings me back to #1, since I have other accounts. I wish we could find out for sure...

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Every FICO report I have pulled likes under 5 accounts reporting. Three is best. You can get away with four. Try it YMMV.

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Correct. I tried it. Lost 18 points for too many cards with balances. FICO through EQ. I put a silly little balance on a card to get it to report and score went down 18 points. I paid it off and score went up 18 points. Well at least my credit report works that way. Also confirmed at BankRate.com with the FICO simulator. It might not be accurate but still some things on there I have tested to be true with my credit reports and scores.

I still charge activity on "all" cards when I am not checking my score because that is the only way to keep activity going for most points. I just limit to 4 or less when I want some extra points to apply for something.

Message Edited by ilovepizza on 08-08-2007 06:01 PM

[ilovepizza]

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Skaluva99 wrote:

Hi,

Just wondering...

Say I have a credit limit of $8,000 on a credit card, and I have a current balance of $7,000. My debt ratio would be 87.5%, right? But, if I have other credit cards that aren't in use, and all together my credit lines equal say $50,000 my debt ratio wouldn't be so bad. This won't hurt my credit score, right? They look at your entire credit line, not just one particular card, right?

Thanks!

Steve

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Not sure here on this one at 87%. I know once you hit 90% on any single card it is considered maxed and that can hurt more. I don't know if there is any difference between 1 card at 87% vs splitting it between 3-4 cards.

[fused]

Tusc, Barry care to chime in!

[section8]

I need 3 more points on my TU FICO and my statement date is coming up. I wish I knew if I should keep $31 as the balance or pay it off...

[section8]

Well I paid it all. Lets see what happens...

[smallfry]

Fused tell you what. Let every tradeline you have report a balance and pull a report and see if you don't get the too many accounts with balances is hurting your score message.