topic Re: Having Store Cards Necessary!!! in Understanding FICO® Scoring

Having Store Cards Necessary!!!

Nova5041 — Wed, 14 Oct 2015 06:53:56 GMT

My question; is it necessary to have store cards to maximize your fico score? I know that loans and mortgages help to round out and maximize your scores, but was just curious if store cards are treated different than credit cards with computing fico scores?

Re: Having Store Cards Necessary!!!

Anonymous — Wed, 14 Oct 2015 11:43:47 GMT

I don't have any but I would think store cards, gas cards are the same category as regular credit cards in terms of mix of credit but I could be wrong, anyone?

Re: Having Store Cards Necessary!!!

Anonymous — Wed, 14 Oct 2015 13:55:32 GMT

I am pretty sure the short answer is no, but I have wondered about that too. A concrete way of asking that question might be this:

Is there anybody on the Forum that has no store cards of any kind, open or closed, and who neverthless has achieved a score above (say) 845?

Thom Thumb (with an 850) posts here a lot. I wonder whether he has any score cards.

If I understand it right, the CRAs certainly give scoring models the ability to do that, in terms of giving accounts types and subtypes. Thus a scoring model can see that a mortgage loan, a student loan, and an auto loan are all of the Installment type, but can also see that they are of those subtypes as well. Thus a model can in principal give you extra points in the credit mix category for having mutliple subtypes of installment loans.

Similarly it's theoretically possible for a model to give you points for having two different subtypes of revolving accounts.

But does it? That's your question. I personally don't know. For what it is worth I have obtained very high scores (844) with no store cards and a profile that is imperfect and some known ways, so if I am losing any points it must be only 1. As a practical matter therefore I personally think one should only add a store card if you really see a massive advantage for that particular card -- e.g. if you see that you will be buy an enormous amount of stuff at Target over the next 10 years, then sure get the 5% cash back card (better than using your Citi Double Cash).

Re: Having Store Cards Necessary!!!

Thomas_Thumb — Wed, 14 Oct 2015 16:16:18 GMT

I do not believe a store card is needed to achieve an 850 score. The cards are categorized the same as bank cards in both card count and aggregate utilization. There are published articles that speak to this question and it is discussed in Liz Weston's book.

That being said, I have one open store card, from Best Buy, so I can't confirm [top score without one] but I can confirm [store cards are lumped together with bank cards for mix, card count and aggregate UT% in summary reports] based on personal experience. I also have an AMEX charge card - which is also included in the card count but categorized differently in one of the CRA credit reports.

For Fico 08 - Mix is satisfied with one installment loan of any type (car, personal loan or mortgage) and revolving credit cards (tribal knowledge is that 3 or more cards satisfies this criteria).

I currently have 1 mortgage on file (open), 4 open revolving credit cards, 1 open charge card and 1 open store card. I also have 1 closed store card on file.

Re: Having Store Cards Necessary!!!

Anonymous — Wed, 14 Oct 2015 15:08:06 GMT

Thanks TT! Very helpful.

Useful also as a reminder to people that one can achieve a stratospheric score with comparatively few credit cards. It's easy for people to think they need many when they in fact they only need very few to shoot to the top. I had only three cards for a very long time and I was in the low 840s.

PS. I loved the phrase tribal knowledge. That will keep me smiling for the rest of the month.

Re: Having Store Cards Necessary!!!

Anonymous — Wed, 14 Oct 2015 15:44:21 GMT

I can confirm that you can reach 850 on Experian FICO 8 without a store card. I do have auto loan and mortgages reporting.

Re: Having Store Cards Necessary!!!

Anonymous — Wed, 14 Oct 2015 15:45:31 GMT

^^^ on phone can't edit. I only have 3 cards.

Re: Having Store Cards Necessary!!!

Thomas_Thumb — Wed, 14 Oct 2015 16:00:22 GMT

@Anonymous wrote:
I can confirm that you can reach 850 on Experian FICO 8 without a store card. I do have auto loan and mortgages reporting.

Congratulations on the 850!

As I recall you were in the mid 700s a few months ago due to tax liens.

Re: Having Store Cards Necessary!!!

CH-7-Mission-Accomplished — Wed, 14 Oct 2015 17:01:59 GMT

@Anonymous wrote:
Thanks TT! Very helpful.

Useful also as a reminder to people that one can achieve a stratospheric score with comparatively few credit cards. It's easy for people to think they need many when they in fact they only need very few to shoot to the top. I had only three cards for a very long time and I was in the low 840s.

PS. I loved the phrase tribal knowledge. That will keep me smiling for the rest of the month.

Slightly off topic here, but since we have 850 folks here, can you report the minimum AAofA necesary to achieve a perfect FICO score?

I know folks with 20 - 30 year AAofA and perfect or near perfect scores, but I am uncertain about the minimum AAofA.

Re: Having Store Cards Necessary!!!

Thomas_Thumb — Wed, 14 Oct 2015 17:24:31 GMT

I know 11 years is sufficient for AAoA but I don't know the minimum AAoA for a Fico 850 score.

My guestimate is somewhere between 8 and 10 years but I have no supporting evidence nor have I seen anyone post an 850 with a stated AAoA that low.

Re: Having Store Cards Necessary!!!

Nova5041 — Wed, 14 Oct 2015 19:48:48 GMT

Thank you guys for the quick response, I have a long way to 850. But I'm dedicated to get there, Ive been at the bottom and it's no picnic. Im finally starting to see the light at the end of the tunnel. Lol! Thanks everyone!

Re: Having Store Cards Necessary!!!

Anonymous — Wed, 14 Oct 2015 20:33:02 GMT

Hey CH-7! I just read your post again more carefully. You mention that you know a number of people with an AAoA of 20-30 and perfect (or near perfect) scores.

That really surprises me. Typically an 850 requires a certain amount of intentional work. You have to have periodically added an occasional new card or installment loan or something in your goal of getting there, which therefore lowers your AAoA.. Someone with an AAoA of 30, by way of contrast, is typically a senior citizen who's profile consists entirely of the same two credit cards and one mortgage for 30 years straight. I.e. three extremely old accounts.

Of course it's certainly possible in theory to have an 850 and an AAoA of 30. But that would be really uncommon. I would wager that if you took 100 people at random who have an 849 or 850, almost all of then would have an AAoA of < 18.

When you were talking about people with a really high AAoA, is it possible you were thinking of Age of Oldest Account? That's a very important factor as well, though distinct from AAoA.

Re: Having Store Cards Necessary!!!

Anonymous — Wed, 14 Oct 2015 22:12:42 GMT

My AAoA is just over 8 years.

Oldest 18+ years.

Re: Having Store Cards Necessary!!!

CH-7-Mission-Accomplished — Wed, 14 Oct 2015 22:21:18 GMT

@Anonymous wrote:
Hey CH-7! I just read your post again more carefully. You mention that you know a number of people with an AAoA of 20-30 and perfect (or near perfect) scores.

That really surprises me. Typically an 850 requires a certain amount of intentional work. You have to have periodically added an occasional new card or installment loan or something in your goal of getting there, which therefore lowers your AAoA.. Someone with an AAoA of 30, by way of contrast, is typically a senior citizen who's profile consists entirely of the same two credit cards and one mortgage for 30 years straight. I.e. three extremely old accounts.

Of course it's certainly possible in theory to have an 850 and an AAoA of 30. But that would be really uncommon. I would wager that if you took 100 people at random who have an 849 or 850, almost all of then would have an AAoA of < 18.

When you were talking about people with a really high AAoA, is it possible you were thinking of Age of Oldest Account? That's a very important factor as well, though distinct from AAoA.

So you don't know many dinosaurs? LOL.

I am in my 50s and owned two houses with friends who are now in their 70s When we refinanced a property 10 years ago, they were both between 840 and 850.

And you are right. They have three cards they have had since college, a mortgage and a car loan.

Honestly, I think this is more typical of "normal" Americans (those who do not inhabit credit sites), or at least older Americans. These guys have never carried a balance a day in their lives and would consider what we all do to be insane!

That's why I was asking. I had two examples of people close to me who had 850-ish scores with very long histories; I just wondered if you had to have 15, 20 or more years to get the big prize.

Re: Having Store Cards Necessary!!!

Thomas_Thumb — Thu, 15 Oct 2015 00:47:38 GMT

@Anonymous wrote:
My AAoA is just over 8 years.
Oldest 18+ years.

Thanks.

So... 8 years AAoA minimum it is in my book. That's what I suspected.

http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/What-kind-of-hit-for-carrying-balances-update-7-3/m-p/4089823#M95492

Re: Having Store Cards Necessary!!!

CreditDunce — Thu, 15 Oct 2015 01:46:27 GMT

The only FICO model I know of that counts store cards differently than other credit cards is the NextGen score. NextGen gives bonus points if you have both store cards and normal credit cards. It counts as credit mix with NextGen. I believe that is why so many people believe you need store cards help your credit mix. IMO your NextGen score isn't important enough to add a store card.

Your auto insurance score is hurt if you have store cards (or at least too many store cards). Not all states allow credit scores to be used in setting your auto rates and not all insurance companies use credit scores. However, it is something to think about before you go on a SCT spree.

Re: Having Store Cards Necessary!!!

Anonymous — Thu, 15 Oct 2015 03:08:42 GMT

I understand your line of thinking better now. Thanks CH-7!

You wrote that the two people you mentioned were examples of people with "very long histories" of credit. And you wondered whether a person might need to have a history of at least 15 or 20 years to get the big prize. Absolutely. But just so I am being clear, that's a different factor from AAoA. That's the history of how long a person has been using credit (according to the report) which is the Age of Oldest Account. That's a very important factor and yes, that is something that most people with perfect scores have very high values in. It wouldn't surprise me if the majority of people with perfect or almost perfect (848-849) scores have a total history of > 19 years.

But it's different from the Average Age of Accounts. Our friend Inverse is an example of what I mean. His AAoA is quite low (8). David Howe had an AAoA of 11 when he scored a triple 850. My guess is that these guys have typical AAoA's for the 849+ set, maybe 8-14. Greater AAoA than this is possible for people in that set but it becomes increasingly uncommon the higher it goes.

The sort of senior citizen that has a very high AAoA (e.g. 30) is not that rare: such a person might have two 30 year old credit cards and nothing else. And the reason that his AAoA is so high is the "and nothing else" part. If he had a mortgage he may well have paid it off by then -- if he has more accounts they are likely to be much younger and will be lowering his AAoA. To accidentally stumble into an 848-850 score with just a few extremely old accounts you'd probably need four different credit cards all opened for in college and a mortgage that you opened a bit later and will be paid off very soon but not just yet. Even then I admit to not ever having heard of a documented case of a score within a couple points of 850 and with only 4-5 accounts. Your friends (if I understood you right) may have been more like 840 or 845.

Anyway, I promise you I am not being picky about language. It's just the two factors, while both important to the credit score, are very different -- and nowhere is that cast in higher relief perhaps then people with perfect scores. It's very hard to get a perfect score without trying for it. And people who are trying for it are people who have added enough accounts over time so that (most of them tend to have an AAoA near 10 or 11 or 12. They have often been trying for it for a while, however, so it isn't strange that their oldest account may be quite old.

Re: Having Store Cards Necessary!!!

takeshi74 — Thu, 15 Oct 2015 03:51:12 GMT

@CreditDunce wrote:
IMO your NextGen score isn't important enough to add a store card.

The importance of a score really depends on the creditor(s) that use the score. An EQ NextGen would probably be important for PenFed customers. However, I'm one and I wouldn't add a store card just for scoring purposes with PenFed.

Re: Having Store Cards Necessary!!!

CH-7-Mission-Accomplished — Thu, 15 Oct 2015 04:08:26 GMT

@Anonymous wrote:
I understand your line of thinking better now. Thanks CH-7!

You wrote that the two people you mentioned were examples of people with "very long histories" of credit. And you wondered whether a person might need to have a history of at least 15 or 20 years to get the big prize. Absolutely. But just so I am being clear, that's a different factor from AAoA. That's the history of how long a person has been using credit (according to the report) which is the Age of Oldest Account. That's a very important factor and yes, that is something that most people with perfect scores have very high values in. It wouldn't surprise me if the majority of people with perfect or almost perfect (848-849) scores have a total history of > 19 years.

But it's different from the Average Age of Accounts. Our friend Inverse is an example of what I mean. His AAoA is quite low (8). David Howe had an AAoA of 11 when he scored a triple 850. My guess is that these guys have typical AAoA's for the 849+ set, maybe 8-14. Greater AAoA than this is possible for people in that set but it becomes increasingly uncommon the higher it goes.

The sort of senior citizen that has a very high AAoA (e.g. 30) is not that rare: such a person might have two 30 year old credit cards and nothing else. And the reason that his AAoA is so high is the "and nothing else" part. If he had a mortgage he may well have paid it off by then -- if he has more accounts they are likely to be much younger and will be lowering his AAoA. To accidentally stumble into an 848-850 score with just a few extremely old accounts you'd probably need four different credit cards all opened for in college and a mortgage that you opened a bit later and will be paid off very soon but not just yet. Even then I admit to not ever having heard of a documented case of a score within a couple points of 850 and with only 4-5 accounts. Your friends (if I understood you right) may have been more like 840 or 845.

Anyway, I promise you I am not being picky about language. It's just the two factors, while both important to the credit score, are very different -- and nowhere is that cast in higher relief perhaps then people with perfect scores. It's very hard to get a perfect score without trying for it. And people who are trying for it are people who have added enough accounts over time so that (most of them tend to have an AAoA near 10 or 11 or 12. They have often been trying for it for a while, however, so it isn't strange that their oldest account may be quite old.

.

I know what you are saying. I do wonder about one thing and that is whether the age calculation takes into account the oldest open credit card or how long you have been on file. In my case, I have been on file since 1980, so 35 years. My oldest account is 20 years. Unfortunately, that old account and a few more close in age will be falling off in five years when the IIB accounts drop. So when FICO looks at me, it will see my oldest accounts as having been opened seven years. I am just wondering if FICO will score the time I have been on file. I don't know.

Re: Having Store Cards Necessary!!!

CreditDunce — Thu, 15 Oct 2015 04:30:09 GMT

@takeshi74 wrote:
@CreditDunce wrote:
IMO your NextGen score isn't important enough to add a store card.

The importance of a score really depends on the creditor(s) that use the score. An EQ NextGen would probably be important for PenFed customers. However, I'm one and I wouldn't add a store card just for scoring purposes with PenFed.

I'm a Penfed member, too. I added a store card in my last app spree, but it wasn't to help my chances with Penfed. I wanted the discount that came with the store card. It may have helped my NextGen score. It is a little higher this quarter than last, even with the recent app spree. It didn't change my pre-approvals. I am still pre-approved for the same things. I might feel differently if I had a use for one of Penfed credit cards. Not that I don't want to accept one of the pre-approvals. I just don't have a need for any of their credit cards.