topic Re: Prime cards only? in Credit Cards

Prime cards only?

jetsfan2013 — Wed, 02 Oct 2019 10:21:07 GMT

A friend of mine mentioned he has closed cards issued by *Tier 2* companies, essentially everyone who isnt Chase, Citi, Amex, Barclays, or BofA. Once he did that his score went up over 40 pts. His belief is that the Synchrony and Comneity Banks of the world drag your score down.

He has no data points other than what he did over the summer, however has anyone else scrubbed their credit report to only include prime cards?

Re: Prime cards only?

Anonymous — Thu, 03 Oct 2019 15:12:46 GMT

Challenge him to go back and analyze his earlier reports compared to the most current. My bet is he will find other factors. Scores are derived via mathematical algorithm and I haven’t seen any way that they care about who issues credit, other than a couple instances where major vs retail has seemed to matter (using a major as your AZEO card vs using a retail card, for example).

Re: Prime cards only?

Anonymous — Wed, 02 Oct 2019 10:29:36 GMT

it probably has nothing to do with who the issuer is. without more data you can only guess why his score went up. you didn't even say what his starting and ending score was.

Re: Prime cards only?

VanderSnoot — Wed, 02 Oct 2019 10:59:01 GMT

Comenity and Synchrony are usually store cards, and I thought there was evidence that store cards reduce your score (I know they hurt your insurance scores). However, I don't recall that it was as much as 40 points.

But dig around the forum and doublecheck that, because as I keep typing, I'm beginning to remember that the score effect was only on an earlier FICO model that is no longer used.

Re: Prime cards only?

CreditInspired — Wed, 02 Oct 2019 11:37:09 GMT

I just want to respond to the term "Tier 2" cards. No such thing here on myFICO. There are prime cards (banks), store cards and SCT (retail), and subprime (predatory) lenders.

Re: Prime cards only?

AverageJoesCredit — Wed, 02 Oct 2019 11:49:37 GMT

Sync and Comenity do have prime cards .

Re: Prime cards only?

Anonymous — Wed, 02 Oct 2019 12:23:31 GMT

@jetsfan2013 wrote:
A friend of mine mentioned he has closed cards issued by *Tier 2* companies, essentially everyone who isnt Chase, Citi, Amex, Barclays, or BofA. Once he did that his score went up over 40 pts. His belief is that the Synchrony and Comneity Banks of the world drag your score down.

His score didn't go up at all from the closure of store cards. In fact, the only side effect of closing a bunch of cards could potentially be a score drop, as aggregate utilization could be inflated due to your overall limit denominator being reduced and the percentage of accounts you have with a balance could increase due to the overall number of accounts being reduced.

Re: Prime cards only?

Brian_Earl_Spilner — Wed, 02 Oct 2019 12:27:49 GMT

Did he happen to get those scores from credit karma?

Re: Prime cards only?

jetsfan2013 — Wed, 02 Oct 2019 12:40:55 GMT

Thanks for the clarity. He had store(retail) however he referenced them as Tier 2.

Re: Prime cards only?

jetsfan2013 — Wed, 02 Oct 2019 12:41:34 GMT

Scores were from here fwiw

Re: Prime cards only?

cardme — Wed, 02 Oct 2019 14:43:05 GMT

I agree with what everyone else has pointed out here about the factors likely changing and being the things that affected the score (not the lenders/cards).

One thing I would like to call out, however, is I did have the PayPal Cashback Mastercard prior and Synchrony does have some practices that could hurt your score (at least on a short-term basis). I recall them “having a random statement closing date” each month. This drove me insane as I typically like to pay off my card each month and it felt like they always tried to ensure I had a balance of some sort. Between this, them not working well with my bank (they said that Synchrony asked to only receive payments through the mail for some reason even though they previously had been accepting them electronically from them), and PayPal’s bad website with no way to do anything with the card through a mobile app, I decided to not continue any relationship with Synchrony moving forward. Even if some of those pain points don’t reflect negatively on my score, they definitely reflect on my sanity.

Re: Prime cards only?

jbestman007 — Wed, 02 Oct 2019 15:15:31 GMT

@jetsfan2013 wrote:
Scores were from here fwiw

I don't know if store cards hurt your score or not. Personally, I just avoid them. However, If I were to venture a guess as to why your friend's score Increased, I would point to utilization. To close accounts you have to pay them off. When you pay them off your utilization improves. When your utilzation improves, depending on your profile, your score improves. Just a guess though.

Re: Prime cards only?

Anonymous — Wed, 02 Oct 2019 15:41:04 GMT

@jbestman007 wrote:
I don't know if store cards hurt your score or not.

They do not.

Re: Prime cards only?

jbestman007 — Wed, 02 Oct 2019 16:43:36 GMT

@Anonymous wrote:
@jbestman007 wrote:
I don't know if store cards hurt your score or not.
They do not.

Let's slow down with the "absolutes". You don't know for a fact that they don't at all. There are different scoring models out there. Until there is one universal scoring model used by all banks, let us not claim to be all knowing.

Re: Prime cards only?

BallBounces — Wed, 02 Oct 2019 16:59:58 GMT

@jbestman007 wrote:
@Anonymous wrote:
@jbestman007 wrote:
I don't know if store cards hurt your score or not.
They do not.
Let's slow down with the "absolutes". You don't know for a fact that they don't at all. There are different scoring models out there. Until there is one universal scoring model used by all banks, let us not claim to be all knowing.

Fair. But BBS is referring to FICO scoring models. Until this thread specifies which algo, it is safe to make a statement that closing store cards will not increase your score, and certainly not by "40 points". It might be helpful to know which FICO score in particluar and we could then definitely say.

But:

The point folks are trying to make is that the person described in the OP saw a score increase for reasons beyond closing store cards. Those reasons could be increase in AoYA, AoAA, AoOA, aging of delinquencies, derogitory information being removed, adding a non revolving tradeline, haveing a non revolving tradeline go under 10% UTI, having revolvers go under a threshold, or mutiple thresholds, etc etc . I could actually go on.

There is NO WAY we can attribute the increase to "closing Tier 2 cards". And, we have seen no anecdotal evidence that "store cards" suppress one's FICO scores anywhere.

Re: Prime cards only?

FinStar — Wed, 02 Oct 2019 17:05:39 GMT

@jbestman007 wrote:
@Anonymous wrote:
@jbestman007 wrote:
I don't know if store cards hurt your score or not.
They do not.
Let's slow down with the "absolutes". You don't know for a fact that they don't at all. There are different scoring models out there. Until there is one universal scoring model used by all banks, let us not claim to be all knowing.

I'll let @Anonymous chime in on that piece, but from my own experience testing the prior FICO models, having store cards mixed with the rest of my profile did not have any [damaging] impacts to any of my scores and I was able to achieve 850 with several of them. That said, 850 is no longer the crown (been there, done that)...well, because ummmm yeah them new accounts and inquiries 😁

Re: Prime cards only?

Anonymous — Wed, 02 Oct 2019 17:57:00 GMT

I'd say the majority of models then if we're going to split hairs. As stated in the past, some models such as insurance may penalize slightly for store cards, but those models relative to the common FICO scores we talk about all the time are the rare exception.

Re: Prime cards only?

VanderSnoot — Wed, 02 Oct 2019 18:59:43 GMT

Here's a thread from Dec 2015 on the subject where both TT and RobertEG weigh in. It seems that store cards do not lower your credit score on the major FICO models, but if you have only store cards, you can't get an 850.

I didn't mean to kick off such a storm with my post above. I should have explicitly stated that I agree with everyone else: closing store cards will not increase your score by 40 points. On some uncommon and possibly out-dated models (including FICO), store cards can lower your scores, but only by a few points. (The effect on insurance scores is significant, though. Even one store card can increase your insurance payments.)

Re: Prime cards only?

jetsfan2013 — Wed, 02 Oct 2019 19:10:20 GMT

Why do store cards increase your insurance?

Re: Prime cards only?

VanderSnoot — Wed, 02 Oct 2019 19:17:47 GMT

@jetsfan2013 wrote:
Why do store cards increase your insurance?

I also wondered...