topic Re: Store Credit Card in Credit Cards

Store Credit Card

Anonymous — Fri, 13 Nov 2015 18:04:52 GMT

First, some background: I have 4 credit cards: Cap One ($1,800), Cap One ($850), Barclay ($1300), and Best Buy Mastercard ($300). I have been reading about improving credit scores as I'm getting ready to try to get pre-approved for a mortgage in ~1 year by pouring serious chunks of cash into getting those 4 cards to $0 balance, getting a few collections accounts paid off, and making sure there is no false info on my credit.

I also read that it is important to have a good mix of differing kinds of credit, one of which is a store card. I do not have a store card of any kind. If this is true, what is a good and easy store card to get? My scores are pretty low right now thanks to high balances on the above cards and several medical collections accounts.

Keep in mind I'm probably not going to use it much, if at all, as I'm trying to keep my balances on all cards at $0.

Re: Store Credit Card

Anonymous — Fri, 13 Nov 2015 18:09:26 GMT

I was once in the same boat, so yeah..I understand the difficulty.

My suggestion would be to go for Fingerhut. They are easy to approve, report to all the CBs but their products are at least twice the market rates ! So if you don't intend to buy, they're good. On the other hand, if you do want to buy from them, go for smaller amounts and ask for a CLI in 3 months - which they'll definitely give !

Re: Store Credit Card

Anonymous — Fri, 13 Nov 2015 18:18:31 GMT

I am by far not a credit guru, but I don't think that a store card is the kind of credit mix that lenders look for. When they say credit mix, I beleive they are talking about major credit cards, loans, mortgages, car loans, etc. A store card does not look any different on your reports than a major card would, unless someone manually looks at your report and sees that the card is not a major. Others please chime in, as I don't want to be giving bad info.

Re: Store Credit Card

ddemari — Fri, 13 Nov 2015 18:19:47 GMT

If you want to get a mortgage in a year, id not open any new accounts. You have 4 credit cards, that is enough for good FICO scoring. Since you are probably not going to use the card, don't open up one. Let your reports age, keep your utilization low and try to fix any derogatorys on your reports. Now if you really want a card, then I understand.

Re: Store Credit Card

Anonymous — Fri, 13 Nov 2015 18:19:54 GMT

I like this answer because it makes the most sense to me. I thought a store credit card was the same as a normal card.

Re: Store Credit Card

Anonymous — Fri, 13 Nov 2015 18:25:06 GMT

I actually don't need or want another card unless I could get a high limit, very low interest card...Then I'd balance transfer my others onto it.

The biggest thing that's hurting my credit right now is a bunch of medical collection accounts. I've had very good luck getting them completely deleted once I pay them off though, so that's good.

The second biggest thing is high balances on those cards I mentioned, but I'm dropping $250 - $500/month into them to get them knocked out.

Re: Store Credit Card

ddemari — Fri, 13 Nov 2015 18:44:51 GMT

I would stray away from a store card then because usually the interest rate is at least 20-26% some higher and they are not meant for any balance transfer. Hold out and keep working on cleaning up your profile. Good luck!

Re: Store Credit Card

Anonymous — Fri, 13 Nov 2015 18:50:16 GMT

I agree with the advice provided above to stay away from store cards if you don't particularly want one and would not use it. Your overall profile will be stronger if you continue to grow the major cards you have. Congratulations on your success thus far!

Re: Store Credit Card

Anonymous — Fri, 13 Nov 2015 20:19:17 GMT

Thanks for the answers and advice, all! I'll just stick with what I have, get them paid off, and maybe in a few years apply for some new cards with lower rates.

Re: Store Credit Card

ddemari — Fri, 13 Nov 2015 21:07:50 GMT

good call, especially since you have your eyes on a mortgage, you dont need to muddy your profile with store cards right now. And, by not apping for something you dont want or need, it puts you in a better position for when you see something and say to yourself, "oh I neeeds that"!

it's definitely hard to not want to open cards. I hear that for sure. Set your eyes on your goal, a home and you should be just fine at cleaning up your reports and staying in the garden.

Re: Store Credit Card

CreditDunce — Sat, 14 Nov 2015 03:40:38 GMT

The FICO models used in mortgages do not count store cards any differently than other credit cards. Adding a store card would likely only hurt your credit score at this point. IMO you should are best served by letting your AAoA build for the time being. No new app's or HP's until after the mortgage. Use the time to hit the rebuilding section. See if you can get any of the collections off your credit report... PFD, etc.

If you do not have an installment loan on your credit report, you might consider adding a small shared secured loan. Then pay off all but 10% or so. I think FICO 04 only cares that you have both revolving and installment loans on your credit report (it doesn't matter much if all of your installment loans are closed with FICO 04). However, it can help your EX-98 to have at least one open installment loan. For best scoring, you want your overall installment utilization low with FICO 98 and 08. There are several threads in the Understanding FICO section, if you are interested.

Re: Store Credit Card

Anonymous — Thu, 07 Jan 2016 04:31:06 GMT

I was prepping for a mortgage last year and here are some things that helped as I was rebuilding 1 year out:

1. I did not add any cards within 13 months of getting pre-approval. I of course had a small hit from the initial hp and new account. But I got nice bumps at 3mo, 6mo, and 1yr. Note I only had 3 cards, so the new one may have weighed more heavily.

2. I could have paid my entire auto loan off... but did NOT! Having the installment OPEN was a big help in my mix, and so the score didn't drop due to 'closing the account.'

3. I spent the year paying off my cards (but I was paying them off in full each month.) I had read keeping my util below 10% was ideal. Then I read 6% and tried that. I personally found the best results at 6% and under, with only 1 account showing a balance. You could always give this a try (since you are paying your cards off over the year.) Get all but one card down to zero. Then get the last one down to 6%... and pay another percent with each following month. Chances are you will get bumps with each payment. I found when I paid ALL my cards down to zero... I actually lost fico points, especially on TU & EX. The lower scores would stay the following month when I would leave some balance. Then go back up the 3rd month when I paid down to 6%. If you are paying off in advance, this might be worth testing. It seemed like a big game to play, but sure paid off in how I was able to get my scores up. The best part is that you have a year to get them up. Best of luck!!!!!