topic Re: Store cards - close them? in General Credit Topics

Store cards - close them?

Anonymous — Thu, 14 May 2020 17:13:24 GMT

So apparently having a store card hurts your credit score for mortgage. I have a wayfair card and amazon card with 0% balances. They are not huge, may be like 2K combined against total credit limit of 120K and utilization ~13%. What is the consensus - for the purposes of boosting mortgage specific score should I pay off and close these accounts? Also is amazon considered "store" or not? It's helpful to have amazon credit crad on file.

Re: Store cards - close them?

RSX — Thu, 14 May 2020 17:23:05 GMT

you will get a score boost from paying them down

but closing them may not affect your score at all

is the Amazon a Synchrony card? if yes = Store Card

if it is a Chase Amazon, then it isnt a store card

Re: Store cards - close them?

CYBERSAM — Thu, 14 May 2020 17:58:08 GMT

"So apparently having a store card hurts your credit score for mortgage." NO!

If you have balance on Store cards and paying high interest. You should pay them off.

Credit report do see store cards and is actually good to have couple in your file.

Re: Store cards - close them?

Anonymous — Thu, 14 May 2020 23:59:04 GMT

My understanding - store cards are a low end form of credit seeking and stink of desperation- If you could think of the major credit card companies as the major players and then visualize tiers of credit below them -such as store credit cards and as them being the lowest. So it boils down this-

Why aren't you using my credit card says Chase, BOA, Fargo? They will see, that you have opened store cards and may not entertain high credit limits at a later date. Also, the closing of any account (s) are another negative and shows another form of unstable behavior- totally about algorithms in thier system- not personal- credit is a business & it is seldom personal.
Super sorry I rambled on. Hope this is helping you. The truth is you only need a couple of cards to establish great scores. Don't run it to the limit and pay on time is the secret sauce! Best of luck to you!

Re: Store cards - close them?

DollyLama — Fri, 15 May 2020 02:34:27 GMT

If either Amazon or Wayfair is your oldest revolving credit, store or bank, due not close the oldest. It will sink your age of oldest account and then effect the average age of accounts. My mortgage scores were over 760 having store cards. I've really only seen where having your first "credit card" of being store, having an effect on your insurance.

You are so close to <8.9% utilization aggregate, that if possible, get it to minimum of that, and you will see a very nice increase in FICO.

What is your middle mortgage score?

Re: Store cards - close them?

Anonymous — Fri, 15 May 2020 14:27:53 GMT

I have not seen or heard sufficient evidence supportive of the suggestion merely having a retail store card(s) is damaging to your credit score or, more specifically, a potential mortgage. Having said that, many "new to credit" and "rebuilders" will rapidly accumulate numerous low limit retail cards. Often they employ what is/was called the Shopping Cart Trick (SCT), which would approve a new retail trade line with a soft credit pull. If you are trying to obtain a mortgage, predominantly having retail cards as your revolving credit would not likely comfort to a mortgage lending underwriter. Having some retail cards mixed in with a selection of bank/CU cards, combined with low utilization, and reliable payment history, then I believe it makes no difference at all. If there is a store you frequently purchase from that gives good discounts and/or no/deferred interest for various purchases, great, get it! I would focus more on the totality of your file than whether having a retail card or two is like garlic to an underwriting vampire.

@Anonymous wrote:
So apparently having a store card hurts your credit score for mortgage. I have a wayfair card and amazon card with 0% balances. They are not huge, may be like 2K combined against total credit limit of 120K and utilization ~13%. What is the consensus - for the purposes of boosting mortgage specific score should I pay off and close these accounts? Also is amazon considered "store" or not? It's helpful to have amazon credit crad on file.

Re: Store cards - close them?

Brian_Earl_Spilner — Fri, 15 May 2020 03:06:33 GMT

It doesn't hurt your mortgage score. It can hurt your insurance rate. The only time it might make a difference on a mortgage app is if the underwriter or lender is picky. And, even if you close them, they'll still show on your report for up to 10 years. You would need to get them to remove their tradelines from your reports.

Re: Store cards - close them?

Anonymous — Fri, 15 May 2020 09:33:22 GMT

@DollyLama wrote:
If either Amazon or Wayfair is your oldest revolving credit, store or bank, due not close the oldest. It will sink your age of oldest account and then effect the average age of accounts. My mortgage scores were over 760 having store cards. I've really only seen where having your first "credit card" of being store, having an effect on your insurance.

You are so close to <8.9% utilization aggregate, that if possible, get it to minimum of that, and you will see a very nice increase in FICO.

What is your middle mortgage score?

Regarding the statement in bold up above, not true. Closed accounts stay on your reports for up to ten years and continue to factor into the account aging calculations.

Re: Store cards - close them?

CreditCrusader — Fri, 15 May 2020 13:50:07 GMT

@Anonymous wrote:
My understanding - store cards are a low end form of credit seeking and stink of desperation- If you could think of the major credit card companies as the major players and then visualize tiers of credit below them -such as store credit cards and as them being the lowest. So it boils down this-

Why aren't you using my credit card says Chase, BOA, Fargo? They will see, that you have opened store cards and may not entertain high credit limits at a later date. Also, the closing of any account (s) are another negative and shows another form of unstable behavior- totally about algorithms in thier system- not personal- credit is a business & it is seldom personal.
Super sorry I rambled on. Hope this is helping you. The truth is you only need a couple of cards to establish great scores. Don't run it to the limit and pay on time is the secret sauce! Best of luck to you!

I have NO idea where you picked up that notion, but it's a 100% prevarication.

I closed a home loan at 3.25% fixed for 30 years with a slew of store cards in my file.

It's having those cards with heavy balances that "stinks" of desperation...that or having a ton of store lines to mask the fact that you have heavy UTIL on your primary cards to create the illusion of low usage. Regardless, the store cards aren't the culprit in either circumstance. Heavy usage IS.

Re: Store cards - close them?

Anonymous — Tue, 26 May 2020 06:00:07 GMT

I'm not sure who is telling you having store cards hurts your credit score for mortgage, in my experience, that is not the truth at all. I closed on my house in August of last year with 18 credit accounts - 8 of those being store cards. All I had for a long time was store cards and Credit One credit cards. In everything we learned buying a house, you don't want to do ANYTHING with your credit at least 3-6 months prior to actively obtaining a mortgage other than paying down account balances. Definitely don't close down accounts unless the lender asks you to close them.

Re: Store cards - close them?

Anonymous — Wed, 27 May 2020 02:15:45 GMT

Does anyone know if CareCredit Synchrony is considered a store card?

Re: Store cards - close them?

FlaDude — Wed, 27 May 2020 15:09:52 GMT

@Anonymous wrote:
Also, the closing of any account (s) are another negative and shows another form of unstable behavior- totally about algorithms in thier system- not personal- credit is a business & it is seldom personal.

I am pretty sure this is incorrect.

Re: Store cards - close them?

RSX — Wed, 27 May 2020 16:06:43 GMT

@Anonymous

i would say Yes, it is a store card

Re: Store cards - close them?

GApeachy — Wed, 27 May 2020 16:25:28 GMT

@Anonymous wrote:
1. I have a wayfair card and amazon card with 0% balances. Deferred Interest promo purchases on both? get utl. down on both.
2. They are not huge- Have you tried for a sp cli on any one of those 2 store cards?
3. for the purposes of boosting mortgage specific score should I pay off ~~and close these accounts~~? I'd try for a cli and do payoff.