topic Re: will a cli help my fico score? in Understanding FICO® Scoring

will a cli help my fico score?

Anonymous — Sat, 22 Jan 2011 04:29:34 GMT

Just want to know if getting a cli will help my fico score climb higher? Thx

Re: will a cli help my fico score?

MarineVietVet — Sat, 22 Jan 2011 04:37:13 GMT

@Anonymous wrote:
Just want to know if getting a cli will help my fico score climb higher? Thx

Hello there.

CL's themselves are not scored only the percentage of usage of the CL's. However a higher CL can lower your utilization which could help raise your score.

You can also lower your balances to achieve the same effect.

From a BK years ago to:
EX - 9/09 pulled by lender 802, EQ - 10/10-813, TU - 10/10-774

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

Re: will a cli help my fico score?

Anonymous — Sat, 22 Jan 2011 04:40:52 GMT

I owe nothing on any of my cards but my same club card went from 350 co to 1050cl I need my quifax to go up 2 point to qualify for a 10k increase on a mortgage loan

Re: will a cli help my fico score?

MarineVietVet — Sat, 22 Jan 2011 04:42:18 GMT

@Anonymous wrote:
I owe nothing on any of my cards but my same club card went from 350 co to 1050cl I need my quifax to go up 2 point to qualify for a 10k increase on a mortgage loan

That won't have any effect on your score.

Re: will a cli help my fico score?

OptimalCS — Sat, 22 Jan 2011 10:32:20 GMT

Re: will a cli help my fico score?

haulingthescoreup — Sat, 22 Jan 2011 18:28:06 GMT

Just to clarify: it's possible to "owe nothing" on your credit cards but still get dinged for util.

That's because the banks chose to report (in most cases) your balances as of your statement date, instead of your balances as of your due date.

So if you have a $500 CC, and you use it during the month, and it reports $100 due for that month on the new statement, and then you pay the $100, then you will owe nothing, but that $100 will be reported to the credit bureaus, and that card will show 20% utilization ($500 / $100.) Depending on what else is going on with your reports, that can cost you some points.

If this is happening to you, and you're trying to squeeze out the last few points, pay off every CC except one before their statement dates, so that they report $0. On the remaining card, pay all but $10, let it show up on your statement, and then be sure to pay it off before the due date --this is easy to forget with two-step paying.

A few cards report differently:

US Bank cards report the balance as of the last business day of the month, and they send that info to the bureaus that night
HSBC and Orchard bank cards (not the Best Buy store-only card) report the balance as of the last business day of the month, but they don't send in that number for another week or so
many American Express cards report the statement balance, but they don't send in the info for four more weeks, so your reported balance always seems to be nearly a month behind. They've started changing on some cards, but not yet all, from what I've read here.

"Playing the util game" is pretty tedious for a lot of people, but it does optimize your reported scores by minimizing your revolving util. You only really need to do this if you're getting ready to apply for something that is highly score-driven --think mortgages and auto loans. But many of us now do this routinely, because we like what it does for our scores.

Don't forget to let one card (just one) report a tiny balance, because most people get dinged for all cards with $0 reported balances. It will take each card a billing cycle for the $0's to show up, show that means it could be a month or more for everything to update, if you just had a statement drop on a card or two.

Re: will a cli help my fico score?

vanillabean — Sat, 22 Jan 2011 20:23:56 GMT

@haulingthescoreup wrote:

Just to clarify: it's possible to "owe nothing" on your credit cards but still get dinged for util.

Just to clarify: I disagree. You are in debt once the billing cycle is over and the statement has been released. If you pay in full by the due date, it merely means you escaped paying interest on the balance. You are then out of debt, but did owe the balance throughout the grace period.

Re: will a cli help my fico score?

woozy — Sat, 22 Jan 2011 23:49:51 GMT

If you "let one card (just one) report a tiny balance, because most people get dinged for all cards with $0 reported balances", then why wouldn't you let a tiny balance show on each card? I'm confused.

Also, how long after the paydown should the score improve?

Re: will a cli help my fico score?

haulingthescoreup — Sun, 23 Jan 2011 00:53:26 GMT

@Anonymous-own-fico wrote:
@haulingthescoreup wrote:

Just to clarify: it's possible to "owe nothing" on your credit cards but still get dinged for util.
Just to clarify: I disagree. You are in debt once the billing cycle is over and the statement has been released. If you pay in full by the due date, it merely means you escaped paying interest on the balance. You are then out of debt, but did owe the balance throughout the grace period.

Well, yes of course, it's debt. If you really want to get technical, we're in debt the moment the CC is swiped, because at that point, we have promised to pay someone for whatever we just bought. That's debt.

But I promise you, if you ask people who pay their CC bills in full as soon as they get the statement, they often feel that they owe nothing, in the sense that they don't carry balances. My 83-year-old mother will chase you with a broom if you try to tell her that she's in debt to Macy's, as she has never carried a CC balance in her life. (And never will.) But she never pays before the statements come, either.

So in an attempt to clarify what gets reported when to credit bureaus, and how it might affect scoring, I went along with one possible meaning of "owing nothing."

Re: will a cli help my fico score?

haulingthescoreup — Sun, 23 Jan 2011 01:05:35 GMT

@woozy wrote:
If you "let one card (just one) report a tiny balance, because most people get dinged for all cards with $0 reported balances", then why wouldn't you let a tiny balance show on each card? I'm confused.

Also, how long after the paydown should the score improve?

There's a ding for having no revolving accounts showing a balance, I guess because it looks like you're not using your credit at all, so you let one report. And there's a separate ding (of course!!!) for "too many accounts with balances."

If all your cards report balances, tiny or otherwise, you'll most likely lose points. I've seen it as a negative on my reports, back when I thought every card "had" to show a balance. It's not a big ding, but for someone trying to squeeze out the last few points, this is a point worth knowing.

The tipping point may or may not be the combination of:

half or fewer of all open accounts (revolving, installment, mortgage, other) reporting a balance
fewer than half of all open revolving accounts reporting a balance
but at least one revolving account reporting a balance

If someone has a mortgage and two auto loans, that's three accounts that by definition will always have a balance as long as they're open. To meet the condtions bulleted above, you'd then have to have 3 CC's without a balance (half or fewer of all open accounts with balances.) But then you'd get dinged for no CC's with balances, so you'd want to have 4 open CC's, one reporting a balance, to meet all three conditions.

(Anyone still awake? )

The simplest way I've found to satisfy all this junk is to just let one report a balance, and keep the others showing $0.

If you want to see all the different ways that you can lose points in FICO scoring , read this: FICO scoring reason codes (stickied at the top of this forum)

edit: seem to have lost the ability to add to three

Re: will a cli help my fico score?

woozy — Sun, 23 Jan 2011 03:36:40 GMT

Thanks, that's very helpful.

I'm applying for a mortgage, and definitely squeezing!

Re: will a cli help my fico score?

climbinghigher — Wed, 26 Jan 2011 15:39:47 GMT

I pay my cards on the due date. I work close to the bank, so I walk in and pay to get credit for my payment that day. It took a little practice getting use to timing the use of the cards. I don't use them for three days after that. My report shows the $10 or so balances on them. I made the mistake at first of using them right after payment and it showed on my statement and was reported for the month on my report.

Re: will a cli help my fico score?

Anonymous — Wed, 26 Jan 2011 18:30:18 GMT

A credit limit increase will help your score if you convince the credit card company not to do a hard pull on your credit in order to authorize the increase.

Re: will a cli help my fico score?

Anonymous — Wed, 26 Jan 2011 19:34:16 GMT

@MarineVietVet wrote:
@Anonymous wrote:
Just want to know if getting a cli will help my fico score climb higher? Thx
Hello there.

CL's themselves are not scored only the percentage of usage of the CL's. However a higher CL can lower your utilization which could help raise your score.

You can also lower your balances to achieve the same effect.

Yep. What MVV said.

Re: will a cli help my fico score?

Anonymous — Wed, 26 Jan 2011 20:19:24 GMT

@haulingthescoreup wrote:
The tipping point may or may not be the combination of:
half or fewer of all open accounts (revolving, installment, mortgage, other) reporting a balance
fewer than half of all open revolving accounts reporting a balance
but at least one revolving account reporting a balance
If someone has a mortgage and two auto loans, that's three accounts that by definition will always have a balance as long as they're open. To meet the condtions bulleted above, you'd then have to have 3 CC's without a balance (half or fewer of all open accounts with balances.) But then you'd get dinged for no CC's with balances, so you'd want to have 4 open CC's, one reporting a balance, to meet all three conditions.

I have a number of old, paid off accounts still reporting, many of them past the 7 year mark since they have been paid. Do those count as "open accounts" for above purposes? The majority of accounts I have reporting are student loans, many of which have been consolidated and reconsolidated over the years. Five of them actually have a balance (that I am paying off), but the rest do not. Can I ask to have the ones that have been paid more than 7 years ago removed? Will this affect my score?

Re: will a cli help my fico score?

MarineVietVet — Wed, 26 Jan 2011 20:35:56 GMT

@Anonymous wrote:

I have a number of old, paid off accounts still reporting, many of them past the 7 year mark since they have been paid. Do those count as "open accounts" for above purposes? The majority of accounts I have reporting are student loans, many of which have been consolidated and reconsolidated over the years. Five of them actually have a balance (that I am paying off), but the rest do not. Can I ask to have the ones that have been paid more than 7 years ago removed? Will this affect my score?

Open accounts are only those that are active and in the case of installment loans still being paid on.

After an account is closed it generally will stay for up to 10 years which continues to help your AAoA (Average Age of Accounts) and credit length history. Some closed acounts will drop off before the 10 year mark but most average the 10 years.

In rare cases closed acounts will remain after that 10 year period and that's a good thing. As long as they are on your reports they are helping you. You should never disturb any old account that is in good standing.

Re: will a cli help my fico score?

Anonymous — Wed, 26 Jan 2011 20:53:32 GMT

I agree. Old accounts that have been paid do not need to be disturbed.

When you apply for a mortgage, we look to see if you have had any problems in the last couple of years. Bankruptcies are a different issue. Any problems after a bankruptcy are a problem.

Re: will a cli help my fico score?

Anonymous — Wed, 26 Jan 2011 20:58:54 GMT

@MarineVietVet wrote:
Open accounts are only those that are active and in the case of installment loans still being paid on.

After an account is closed it generally will stay for up to 10 years which continues to help your AAoA (Average Age of Accounts) and credit length history. Some closed acounts will drop off before the 10 year mark but most average the 10 years.

In rare cases closed acounts will remain after that 10 year period and that's a good thing. As long as they are on your reports they are helping you. You should never disturb any old account that is in good standing.

I thought I read somewhere that having too many things reporting has a negative effect. What about in case of old, paid collections? Do those hurt the score and should be requested off? Or is it better that they stay to help average age? How is average age calculated anyway? Is it the sum of months reporting for all reporting accounts beginning with the date open divided by # of accounts?

Re: will a cli help my fico score?

MarineVietVet — Wed, 26 Jan 2011 21:13:02 GMT

@Anonymous wrote:

I thought I read somewhere that having too many things reporting has a negative effect. What about in case of old, paid collections? Do those hurt the score and should be requested off? Or is it better that they stay to help average age? How is average age calculated anyway? Is it the sum of months reporting for all reporting accounts beginning with the date open divided by # of accounts?

I have I believe 36 accounts showing on one of my reports and it doesn't seem to hurt anything.

Collections do hurt your score but remember I said accounts in good standing should be left alone. Collections can report for up to 7.5 years from the DoFD (Date of First Delinquency) on the OC (Original Creditor) account that led to the collection.

Your AAoA is the sum of the ages of every account (except CA collections) on your report, whether open or closed, calculated in months, divided by the number of accounts and then divided by 12. I use the division by 12 to make it easier to convert into years. This is measured from the time each account was opened until present.

You’ll need to figure the age of each account, open or closed, on each report. If all three reports are identical (very unlikely), you're in luck; otherwise, you'll need to run this for each report.

Re: will a cli help my fico score?

Anonymous — Wed, 26 Jan 2011 21:23:51 GMT

I wouldn't deal with old, paid collections. How would you go about removing them? An accurate old, paid collection leaves you with no leverage to remove them.

You can sometimes succeed in removing an unpaid collection by offering to pay it off in exchange for removing it. No leverage with a paid collection.