topic Re: Need Guidance in increasing score in Understanding FICO® Scoring

Need Guidance in increasing score

Anonymous — Sat, 15 Oct 2016 17:47:16 GMT

Hello everyone.

I've been working on cleaning up my report and at this point, feel I have done all I can do in that arena. Now, I would like to turn my focus on maximizing my Fico scores. I have a short term goal of purchasing a home this time next year.

My current Fico scores are in signature line. My CU pulls from EQ. To get their best rate, I need atleast a 740 Fico 5 Mortgage score. I'm trying to determine what I should do after I get my util down to increase my score.

Current CR stats:

AAoA = 13 yrs 1 m

Oldest account = 21 yrs

Last late payment = 4yrs 6m ago

13 accounts = 2 open, 11 closed

3 Inquiries = 1 on 06/24/2015, 2 on 02/05/2016, 02/11/2016

2 revolving lines = 1 active CC (at 69% util), the other inactive CC (0%) (CCs never late)

2 derogs = 1 BofA installment (three 30 days late : 11/2010, 02/2011, 03/2011) (PIF & closed 01/2013; remain on CRs)

= 1 Tax lien (PIF 01/2013 & released; remain on CRs)

Other Accts: = car - PIF 12/2015 & closed 01/2016 & never late

= mortgage - PIF & closed 01/2009 & never late

The only debt that I have is a CC currently at 69% util. This will be down to <1% with even decreases over 3 months. The CC I have is new (Feb 2016) and the only one I have. It's 1 yr anniversary date will be in Feb 2017.

The Fico 8 simulator shows with the util% plan, I should see about a 60 point increase. However, I recently disputed 6 derogs and they have been removed from my TU and EX CRs. I'm still waiting on EQ. It is my understanding that I may be rebucketed as a result of the 6 derogs being removed and this may/may not lower my score a bit.

Should I get a personal loan in order to have an installment account on my CR?

I know this will improve my Fico score, but I'm concerned by doing so, a HP will be done on my CR increasing my INQ. I am already being dinged for the 3 INQ I have and don't want to lower my score any more than necessary.

I can easily get a personal loan from my CU and pay it down to almost nothing before applying for the mortgage if necessary. I learned from experience that if I get an installment loan and pay it off completely, Fico will ding me pretty hard, so I can leave a small balance to help my score and yet still have a small DTI when it comes time to apply for the mortgage.

The same question for CC: Should I apply for a new CC and will that help my score?

Since my UTIL will be down to <1%, I'm not sure of the benefit in doing this score-wise. I currently have only one active CC, the other CC is inactive and I don't even have the card. What I don't know is if by getting a new CC how would that new available credit hurt me in the eyes of the CU when I apply for the mortgage.

I don't need either a personal loan or a new CC, but I am simply trying to figure out how I might be able to maximize my Fico score without hurting my overall financial picture when I apply for the mortgage this time next year.

Thank you inadvance.

Re: Need Guidance in increasing score

Gmood1 — Mon, 03 Oct 2016 04:24:05 GMT

You can do a shared secured loan through a CU. Alliant comes to mind. It will be a SP to join and no HP for secure $500 loan. There's a huge thread here on how to go about doing this http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Adding-an-installment-loan-the-Share-Secure-technique/td-p/4506756 .

Personally I would add two more useful cards. This will help your overall utilization in the future. Having a good credit mix does have a positive affect on your scores.

Re: Need Guidance in increasing score

Anonymous — Mon, 03 Oct 2016 04:31:25 GMT

Here are a few thoughts.

First, regarding credit cards.

(a) Great that you have a plan for steadily paying off your credit card debt. You wiill have that paid off by January 1st, right? Do that for sure and then continue to use your card, but make sure that you keep the balance that reports small. (But at least $5)

(b) You mention that you have a second credit card but that it is "inactive" and that you don't even have the card. That's a problem. Your goal here should be to take steps ASAP to obtain a new copy of the card from the issuer, emphasizing to them that you like the card and really want to be using it. Then begin using it. It can be for as little as a $5 purchase. But start using it. Allow the card to generate a statement with a positive balance and then pay it off after the statement prints. Due that for a few months in a row. It is very important to your credit score that you not lose that 2nd credit card account, and you are at risk right now of it being cancelled. Down the road you can reduce that card to $0 when you get ready to do your mortgage pre-approval, but right now focus on getting it back in the game.

(c) About getting a third credit card. There are pros and cons to this given your timeline for buying a house. My own guess is that it makes sense to get a third card once you get some of your CC debt paid down, since it will enable you to have multiple $0 CC balances (which FICO likes, as long as it sees card with a positive balance). But get some advice from other people, especially those who have expertise in whether the old mortgage models might punish you for having a card opened less than a year before you close.

Second, installment loans:

You mention that you have a BOA installment loan on your report, but don't specify whether that loan is open or closed. Later on you ask: "Should I get a personal loan in order to have an installment account on my CR?"

I am guessing that you have a closed BOA installment loan on your report and that you are asking: "Should I get a personal loan in order to have an open installment account on my CR?" Am I right about both things?

Your goal is a mortgage. Having an open installment loan does not appear to benefit the EQ and TU mortgage scores (though it doesn't hurt them of course) as long as you have a closed installment loan on file. But... and this is important... it does appear to help your EX mortgage score to have an open installment loan that is mostly paid off.

What this means, as far as strategy, is that you cannot know whether getting a small personal loan is the right plan until you have gotten your CC debt paid off and you then (after that) pull your three mortgage scores. If the EX score is your highest score, then getting the personal loan makes no sense. It will just make your highest score that much higher, and as you probably know the underwriter will be looking at your "middle" score.

The good news is that it is totally doable, given your CC paydown plan, to wait until the CC debt is paid off, then make sure the two cards have fully updated all three reports with the new balances ($10 on one and $0 on the other, say), and then pull the mortgage scores. Assume that your EX score will go up 20 points from using the loan trick. Then assess how much that will cause your middle score to rise.

There is a thread here on the Forum that will guide you step by step on how to add the loan and then pay it almost off but not quite. Do not try to figure that out yourself, but use the guidance. As I say, however, you should not decide whether you want to add the loan untill you have your mortgage scores in February.

http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Adding-an-installment-loan-the-Share-Secure-technique/m-p/4506756

One final observation. You want to buy a house a year from now. It is likely that all lenders will still be using the same very old models for the "mortgage scores" that they do now. But.... it's conceivable that could change in the spring or summer. Unlikely but possible. So just make sure you watch that. People on this site will know if that looks likely -- so be sure to ask in six months from now again.

Also be sure to continue to pay your CC bills in full every month, once you get them paid off. Don't carry balances again. By paying them in full you will be establishing a history for yourself as a transactor, which mortgage lenders moving forward will like.

Re: Need Guidance in increasing score

Anonymous — Mon, 03 Oct 2016 04:44:00 GMT

@Gmood1 wrote:
You can do a shared secured loan through a CU. Alliant comes to mind. It will be a SP to join and no HP for secure $500 loan. There's a huge thread here on how to go about doing this http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Adding-an-installment-loan-the-Share-Secure-technique/td-p/4506756 .

Personally I would add two more useful cards. This will help your overall utilization in the future. Having a good credit mix does have a positive affect on your scores.

Gmood1,

Thank you for mentioning the Shared Secure loan...I forgot that I that was available at the CU. I'll check out the link you provided (thx!).

Regarding the getting two more cards - are you suggesting doing that AFTER closing on the mortgage?

Re: Need Guidance in increasing score

Anonymous — Mon, 03 Oct 2016 05:14:35 GMT

@Anonymous wrote:
Here are a few thoughts.

First, regarding credit cards.

(a) Great that you have a plan for steadily paying off your credit card debt. You wiill have that paid off by January 1st, right? <-- yes Do that for sure and then continue to use your card, but make sure that you keep the balance that reports small. (But at least $5)

(b) You mention that you have a second credit card but that it is "inactive" and that you don't even have the card. That's a problem. Your goal here should be to take steps ASAP to obtain a new copy of the card from the issuer, emphasizing to them that you like the card and really want to be using it. Then begin using it. It can be for as little as a $5 purchase. But start using it. Allow the card to generate a statement with a positive balance and then pay it off after the statement prints. Due that for a few months in a row. It is very important to your credit score that you not lose that 2nd credit card account, and you are at risk right now of it being cancelled. Down the road you can reduce that card to $0 when you get ready to do your mortgage pre-approval, but right now focus on getting it back in the game. What if I don't know the card #? I have a partial card number on the CR report. Is that enough to get them to reissue a card or should they be able to find the card # from my SSN? I only used it once at the store (it's a store CC), and that was back in July 2010. But the CRs don't show it as closed in any way and I never closed it (that I'm sure of).

(c) About getting a third credit card. There are pros and cons to this given your timeline for buying a house. My own guess is that it makes sense to get a third card once you get some of your CC debt paid down, since it will enable you to have multiple $0 CC balances (which FICO likes, as long as it sees card with a positive balance). But get some advice from other people, especially those who have expertise in whether the old mortgage models might punish you for having a card opened less than a year before you close. Will do.

Second, installment loans:

You mention that you have a BOA installment loan on your report, but don't specify whether that loan is open or closed. Later on you ask: "Should I get a personal loan in order to have an installment account on my CR?"

I am guessing that you have a closed BOA installment loan on your report and that you are asking: "Should I get a personal loan in order to have an open installment account on my CR?" Am I right about both things? Yes, you're right on both points. Sorry about that. The BoA was a car loan, PIF and closed in 2013. Also, I have another car loan (never late) on my CR from my CU that was open, PIF and closed just last year (Dec 2015). Lastly, I have a mortgage (never late) on my CR that was PIF and closed in 2006.

Your goal is a mortgage. Having an open installment loan does not appear to benefit the EQ and TU mortgage scores (though it doesn't hurt them of course) as long as you have a closed installment loan on file. But... and this is important... it does appear to help your EX mortgage score to have an open installment loan that is mostly paid off.

What this means, as far as strategy, is that you cannot know whether getting a small personal loan is the right plan until you have gotten your CC debt paid off and you then (after that) pull your three mortgage scores. If the EX score is your highest score, then getting the personal loan makes no sense. It will just make your highest score that much higher, and as you probably know the underwriter will be looking at your "middle" score. OK. I will see what everything looks like in Jan. And I didn't know that the underwriter looked at all three scores since my CU said they pulled the EQ Fico Mortgage score. So thanks for that tidbit.

The good news is that it is totally doable, given your CC paydown plan, to wait until the CC debt is paid off, then make sure the two cards have fully updated all three reports with the new balances ($10 on one and $0 on the other, say), and then pull the mortgage scores. Assume that your EX score will go up 20 points from using the loan trick. The loan trick? Are you referring to the shared loan or something else?Sorry, I'm still new here and still learning. Then assess how much that will cause your middle score to rise.

There is a thread here on the Forum that will guide you step by step on how to add the loan and then pay it almost off but not quite. Do not try to figure that out yourself, but use the guidance. As I say, however, you should not decide whether you want to add the loan untill you have your mortgage scores in February. Ok and thanks for the link!

http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Adding-an-installment-loan-the-Share-Secure-technique/m-p/4506756

One final observation. You want to buy a house a year from now. It is likely that all lenders will still be using the same very old models for the "mortgage scores" that they do now. But.... it's conceivable that could change in the spring or summer. Unlikely but possible. So just make sure you watch that. People on this site will know if that looks likely -- so be sure to ask in six months from now again. Didn't know that! Thanks!

Also be sure to continue to pay your CC bills in full every month, once you get them paid off. Don't carry balances again. By paying them in full you will be establishing a history for yourself as a transactor, which mortgage lenders moving forward will like. Yes, I did learn that was something I was doing wrong from this site! Sad thing is, I purposely charge up the card thinking that by showing I could carry a large balance and paying more than the minimum, on time, was a good thing. Boy, oh boy, was I wrong. So now, I am getting the balance low and will have no problem keeping it low once it's down.
:

Thank you for all of your input.

Re: Need Guidance in increasing score

Gmood1 — Mon, 03 Oct 2016 05:37:19 GMT

Being that your mortgage is a year off and with such a long credit history. I'd personally do it now. However, you can wait and do it right after signing for the mortgage. Your scores will drop temporarily when the mortgage reports regardless.
I've refinanced an auto loan in the middle of obtaining a mortgage. It wasn't a big deal nor did I need to explain anything.

Sometimes folks are a little OCD in the forums about this stuff. Lol
I'm sure you'll be fine either way you go.
Just don't carry balances on the CC's as stated before. PIF every month.

Re: Need Guidance in increasing score

Anonymous — Mon, 03 Oct 2016 05:46:45 GMT

Regarding your store card that you cannot locate...

Give the store a call and explain that you have lost the card but really want to keep using it. They will probably ask you for some identifying info that you will have. First name, last name, address, social, birthdate, etc.

By the "loan trick" I mean the Share Secure Loan Technique with Alliant as your lender, documented in the link Gmood and I gave you.

PS. It's very likely that your closed mortgage will fall off your credit reports before you begin shopping for your new home. That's unfortunate, because it would look good to underwriters when they do their formal manual review of your reports to see that you had successfully managed a mortgage before.

I encourage you to make copies of your reports soon where that mortgage is still being listed. There may be a way to have that old mortgage submitted for separate consideration by you to your new lender if you have documentation for it, even if it has already fallen off your reports. You might need to reach out to the lender that handled it and ask them if they'd send you such documentation for it.

Re: Need Guidance in increasing score

Anonymous — Mon, 03 Oct 2016 18:09:22 GMT

@Gmood1 wrote:
Being that your mortgage is a year off and with such a long credit history. I'd personally do it now. However, you can wait and do it right after signing for the mortgage. Your scores will drop temporarily when the mortgage reports regardless. Decisions. Decisions. Even if the loan trick don't help my mortgage score, it may satisfy the "non-mortgage" installment criteria - so I'm thinking I will...but after I see what my score looks like when I get my UTIL down <1% in Jan. I'm trying not to change too much at the same time so I can determine what change had what effect on my scores.
I've refinanced an auto loan in the middle of obtaining a mortgage. It wasn't a big deal nor did I need to explain anything.

Sometimes folks are a little OCD in the forums about this stuff. Lol
I'm sure you'll be fine either way you go.
Just don't carry balances on the CC's as stated before. PIF every month. That's for sure!

Thank you for all your input. I very much appreciate it.

Re: Need Guidance in increasing score

SouthJamaica — Mon, 03 Oct 2016 19:54:43 GMT

@Anonymous wrote:
Hello everyone.

I've been working on cleaning up my report and at this point, feel I have done all I can do in that arena. Now, I would like to turn my focus on maximizing my Fico scores. I have a short term goal of purchasing a home this time next year.

My current Fico scores are in signature line. My CU pulls from EQ. To get their best rate, I need atleast a 740 Fico 5 Mortgage score. I'm trying to determine what I should do after I get my util down to increase my score.

Current CR stats:
AAoA =13 yrs 1 m
Oldest account = 21 yrs
Last late payment = 4yrs 6m ago
13 accounts = 2 open, 11 closed
3 Inquiries = 1 in 2015, 2 in 2016
2 revolving lines = 1 active CC (at 69% util), the other inactive CC (0%)
2 derogs = 1 BofA installment (3 lates)
= 1 Tax lien (paid & released; remains on report)

The only debt that I have is a CC currently at 69% util. This will be down to <1% with even decreases over 3 months. The CC I have is new (Feb 2016) and the only one I have. It's 1 yr anniversary date will be in Jan 2017.

The Fico 8 simulator shows with the util% plan, I should see about a 60 point increase. However, I recently disputed 6 derogs and they have been removed from my TU and EX CRs. I'm still waiting on EQ. It is my understanding that I may be rebucketed as a result of the 6 derogs being removed and this may/may not lower my score a bit.

Should I get a personal loan in order to have an installment account on my CR?

I know this will improve my Fico score, but I'm concerned by doing so, a HP will be done on my CR increasing my INQ. I am already being dinged for the 3 INQ I have and don't want to lower my score any more than necessary.

I can easily get a personal loan from my CU and pay it down to almost nothing before applying for the mortgage if necessary. I learned from experience that if I get an installment loan and pay it off completely, Fico will ding me pretty hard, so I can leave a small balance to help my score and yet still have a small DTI when it comes time to apply for the mortgage.

The same question for CC: Should I apply for a new CC and will that help my score?

Since my UTIL will be down to <1%, I'm not sure of the benefit in doing this score-wise. I currently have only one active CC, the other CC is inactive and I don't even have the card. What I don't know is if by getting a new CC how would that new available credit hurt me in the eyes of the CU when I apply for the mortgage.

I don't need either a personal loan or a new CC, but I am simply trying to figure out how I might be able to maximize my Fico score without hurting my overall financial picture when I apply for the mortgage this time next year.

Thank you inadvance.

1. No you should not apply for another credit card.

2. You should keep both credit card accounts active, with one reporting at zero, and the other reporting at 9% or less.

3. The only personal loan you should consider is a share secured loan (credit union loan secured by share savings account) which has no HP. The best place I know to do that is Alliant Credit Union. You start a savings account with $500+, take out share secured loan for $500 with 48-month or 60-month payout, either decline autopay or cancel it after opening loan, pay the loan down to 9% ($45) immediately. When it reports you'll pick up points from that.

4. Send verification letters to the bureaus to try and get rid of the negatives (or hire a company to do that for you).

Re: Need Guidance in increasing score

Anonymous — Mon, 03 Oct 2016 23:07:32 GMT

@Anonymous wrote:
Regarding your store card that you cannot locate...

Give the store a call and explain that you have lost the card but really want to keep using it. They will probably ask you for some identifying info that you will have. First name, last name, address, social, birthdate, etc.

By the "loan trick" I mean the Share Secure Loan Technique with Alliant as your lender, documented in the link Gmood and I gave you. Ok. Yeah, I missed that.

PS. It's very likely that your closed mortgage will fall off your credit reports before you begin shopping for your new home. That's unfortunate, because it would look good to underwriters when they do their formal manual review of your reports to see that you had successfully managed a mortgage before. It turns out that the mortgage was closed in 2009. Do you still think it will be off the report by the time I apply next year?

I encourage you to make copies of your reports soon where that mortgage is still being listed. Done and done. There may be a way to have that old mortgage submitted for separate consideration by you to your new lender if you have documentation for it, even if it has already fallen off your reports. You might need to reach out to the lender that handled it and ask them if they'd send you such documentation for it.

Thank you!

Re: Need Guidance in increasing score

Anonymous — Tue, 04 Oct 2016 02:05:31 GMT

Your mortgage will likely remain on your report until 10 years after the "date closed." Closed accounts can fall off sooner, but that's fairly rare. You originally thought it closed in 2006, but since you have reinvestigated and discovered the correct date of 2009 you will likely be fine.

Be sure to get that second card back in action. That's important. You have a lot of accounts and a high AAoA, so adding a third card won't hurt your AAoA much, if you decide to do that.

Re: Need Guidance in increasing score

Anonymous — Tue, 04 Oct 2016 02:13:40 GMT

@Anonymous wrote:
Your mortgage will likely remain on your report until 10 years after the "date closed." Closed accounts can fall off sooner, but that's fairly rare. You originally thought it closed in 2006, but since you have reinvestigated and discovered the correct date of 2009 you will likely be fine. The original date I stated was when we sold the house. When you said it may fall off soon - desperation set in and made me look at the closed date.

Be sure to get that second card back in action. That's important. You have a lot of accounts and a high AAoA, so adding a third card won't hurt your AAoA much, if you decide to do that.

Re: Need Guidance in increasing score

Anonymous — Tue, 04 Oct 2016 06:08:47 GMT

In preparation to deal with the unused CC in the coming days, I looked on the CR and saw that it is issued by Comenity Bank for a dept. store.

I decided to see if there were any posts about them on this site. There are tons! Geesh. It doesn't look good at all.

Given all the complaints, I'm afraid to rock the boat with them. Would you still touch this card given Comenity's reputation? What if, instead of reissuing the card, they closed it instead? How will that affect my score. Sigh.

Re: Need Guidance in increasing score

Anonymous — Tue, 04 Oct 2016 06:41:31 GMT

From what I've read (and I could be wrong) most of the Comenity cards that are being closed are people who have high credit lines* between all of their Comenity cards, are refusing to verify their income through the 3rd party agency that Comenity has hired, and are more likely to have one of the Visa's issued by Comenity.

If your store card is a low credit line your risk is small. Besides, if you have a $300 or $500 or something total credit line with a store card, and you never charge more than $40 or something, and they closed you, it would be easy for you to pay off that balance. I think the writers above are encouraging you to NOT open a new account somewhere (and therefore take a new HP in the year before your mortgage, I think it's best to minimize HP's at least 6 months before) and instead to utilize an open account.

*Some of the credit lines I've read about have been $100K or more and people have had many multiples of cards with them. Less than 5 seems to be a safer number.

Re: Need Guidance in increasing score

Anonymous — Tue, 04 Oct 2016 13:26:02 GMT

@Anonymous wrote:
From what I've read (and I could be wrong) most of the Comenity cards that are being closed are people who have high credit lines* between all of their Comenity cards, are refusing to verify their income through the 3rd party agency that Comenity has hired, and are more likely to have one of the Visa's issued by Comenity.

If your store card is a low credit line your risk is small. Besides, if you have a $300 or $500 or something total credit line with a store card, and you never charge more than $40 or something, and they closed you, it would be easy for you to pay off that balance. I think the writers above are encouraging you to NOT open a new account somewhere (and therefore take a new HP in the year before your mortgage, I think it's best to minimize HP's at least 6 months before) and instead to utilize an open account.

*Some of the credit lines I've read about have been $100K or more and people have had many multiples of cards with them. Less than 5 seems to be a safer number.

It is a low CL - $750. If they close it, won't that impact my score in a negative way? Sorry for so many questions. So much to learn when you know so little about these things and trying to play catch up. LOL.

Re: Need Guidance in increasing score

Anonymous — Tue, 04 Oct 2016 14:51:55 GMT

If they close it, it will hurt your score. That's because FICO likes it when you have:

most of your CCs showing a $0 balance

at least one of your CCs showing a positive balance

If either of those is untrue, you get penalized. With only one open card, you would be forced to have either zero cards showing a positive balance or ALL of your cards showing a positive balance. With two open cards, you'd be able to have one card at $0 and one with a positive balance, which is a marked improvement. The mortgage models give you even more points for having multiple $0 cards (as long as one is still positive).

So it is certain that the issuer closing your card would hurt your score.

What is also certain is that a well-known cause of CC issuers closing a card is a long stretch of inactivity. In other words, it is certain that your issuer will close your card eventually -- because you are not using it. If you were to use it tomorrow, then this could be averted.

The open question for you then is this. Which is more probable?

(A) The issuer will cancel my card due to inactivity in the next twelve months.

(B) The issuer will cancel my card if I reach out to the store and tell them I really want to use it.

My feeling is that if you were to get your existing CC debt paid down quite a bit (e.g. paid down to < 29%) and get the new lower balance reflected on your credit reports, then (B) would be less likely than (A). Remember that CC issuers like the idea of consumers wanting to use their cards, as long as the consumer appears to be reasonably low-risk.

But of course (B) is always a possibility. I don't deny that it is possible. What I do know is that if you wait too much longer without using your card, the issuer will cancel it. So you have to weigh risks and choose what appears to you to be the safest course, That could be either way and is up to you. There's no obvious right answer.

Re: Need Guidance in increasing score

Anonymous — Tue, 04 Oct 2016 15:57:00 GMT

@Anonymous wrote:
If they close it, it will hurt your score. That's because FICO likes it when you have:
most of your CCs showing a $0 balance
at least one of your CCs showing a positive balance

If either of those is untrue, you get penalized. With only one open card, you would be forced to have either zero cards showing a positive balance or ALL of your cards showing a positive balance. With two open cards, you'd be able to have one card at $0 and one with a positive balance, which is a marked improvement. The mortgage models give you even more points for having multiple $0 cards (as long as one is still positive).

So it is certain that the issuer closing your card would hurt your score.

What is also certain is that a well-known cause of CC issuers closing a card is a long stretch of inactivity. In other words, it is certain that your issuer will close your card eventually -- because you are not using it. If you were to use it tomorrow, then this could be averted.

The open question for you then is this. Which is more probable?

(A) The issuer will cancel my card due to inactivity in the next twelve months.

(B) The issuer will cancel my card if I reach out to the store and tell them I really want to use it.

My feeling is that if you were to get your existing CC debt paid down quite a bit (e.g. paid down to < 29%) and get the new lower balance reflected on your credit reports, then (B) would be less likely than (A). Remember that CC issuers like the idea of consumers wanting to use their cards, as long as the consumer appears to be reasonably low-risk.

But of course (B) is always a possibility. I don't deny that it is possible. What I do know is that if you wait too much longer without using your card, the issuer will cancel it. So you have to weigh risks and choose what appears to you to be the safest course, That could be either way and is up to you. There's no obvious right answer.

No guts, no glory...so I'll reach out to them today. Hopefully they won't be the Comenity I've read about in some posts. If they tell me they will re-issue me a new card, hopefully they will and not turn around and close it instead.

Thanks everyone for your input. I truly appreciate it.

Re: Need Guidance in increasing score

Anonymous — Wed, 05 Oct 2016 00:41:45 GMT

@Anonymous wrote:
@Anonymous wrote:
If they close it, it will hurt your score. That's because FICO likes it when you have:
most of your CCs showing a $0 balance
at least one of your CCs showing a positive balance

If either of those is untrue, you get penalized. With only one open card, you would be forced to have either zero cards showing a positive balance or ALL of your cards showing a positive balance. With two open cards, you'd be able to have one card at $0 and one with a positive balance, which is a marked improvement. The mortgage models give you even more points for having multiple $0 cards (as long as one is still positive).

So it is certain that the issuer closing your card would hurt your score.

What is also certain is that a well-known cause of CC issuers closing a card is a long stretch of inactivity. In other words, it is certain that your issuer will close your card eventually -- because you are not using it. If you were to use it tomorrow, then this could be averted.

The open question for you then is this. Which is more probable?

(A) The issuer will cancel my card due to inactivity in the next twelve months.

(B) The issuer will cancel my card if I reach out to the store and tell them I really want to use it.

My feeling is that if you were to get your existing CC debt paid down quite a bit (e.g. paid down to < 29%) and get the new lower balance reflected on your credit reports, then (B) would be less likely than (A). Remember that CC issuers like the idea of consumers wanting to use their cards, as long as the consumer appears to be reasonably low-risk.

But of course (B) is always a possibility. I don't deny that it is possible. What I do know is that if you wait too much longer without using your card, the issuer will cancel it. So you have to weigh risks and choose what appears to you to be the safest course, That could be either way and is up to you. There's no obvious right answer.
No guts, no glory...so I'll reach out to them today. Hopefully they won't be the Comenity I've read about in some posts. If they tell me they will re-issue me a new card, hopefully they will and not turn around and close it instead.

Thanks everyone for your input. I truly appreciate it.

Good news. I called Comenity and they found the account to the CC I have with them and will re-issue it. They said it definitely wasn't closed. I had to confirm my address, income, etc. Per the customer service rep, the CC should be here in 7-10 days! Whoo hoo!

Re: Need Guidance in increasing score

Anonymous — Wed, 05 Oct 2016 01:07:11 GMT

Glad to hear it all worked out, pal.

As soon as it arrives, activate it and then buy something with it. It's a store card, so you may need to wait for a while until you find something you actually and truly want/need. But do that as soon as is convenient. Allow the statement to print with a positive balance and then a week after the statement pay it in full. Try doing that each month for Oct, Nov, Dec. You'll have established yourself clearly as a Transactor on that card, which is good. Then you can go back to $0 balances if you want.

Re: Need Guidance in increasing score

Anonymous — Wed, 05 Oct 2016 12:59:17 GMT

@Anonymous wrote:
Glad to hear it all worked out, pal.

As soon as it arrives, activate it and then buy something with it. It's a store card, so you may need to wait for a while until you find something you actually and truly want/need. But do that as soon as is convenient. Allow the statement to print with a positive balance and then a week after the statement pay it in full. Try doing that each month for Oct, Nov, Dec. You'll have established yourself clearly as a Transactor on that card, which is good. Then you can go back to $0 balances if you want.

Sounds good. Thanks everyone for the input.