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BofA Shut Me Down. Guess I’ve learned now...

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Valued Contributor

Re: BofA Shut Me Down. Guess I’ve learned now...

There are too many differences between profiles to even attempt to understand how AA works. No 2 profiles are a like. What may work for me, may not work for you and vice versa. Generally, the credit game as mentioned before - is a slow and steady race. Do too much too fast, there's risk.

OP - I would definitely recommend gardening for atleast 6 months to a year. Let your profile age and everything else. The last thing you want is to spook anyone else. I have seen one company do AA and then next thing you know, others follow suit.


Scores - All bureaus 750 +/-
TCL - Est. $275K
Message 31 of 51
Community Leader
Mega Contributor

Re: BofA Shut Me Down. Guess I’ve learned now...

I am hopefully that reason for AA is not excessive apps. I really do hope OP gets them restored, but I also hope that the lesson has been learned.

EX 759 EQ 774 TU 753


Message 32 of 51
Established Contributor

Re: BofA Shut Me Down. Guess I’ve learned now...


@ChargedUp wrote:

While I agree that the "app spree" is a thing of the past, I'm glad that I got a majority of my cards within an 18 month period. It *did* dip my scores down to the 660's for about a year, but now they're mostly aging at the same pace and in the long run, it'll make my AAoA more solid. I'm currently sitting in the 740's all around.

Trust me though... I was walking on egg shells after getting CFU and CSP within 4 months of each other. I let my AAoA hit 3 years and then I apped for Clearpoints and Savor. While I love SUB's, these cards will serve a long term purpose for me and help me maximize rewards on spend that I make anyways. There's a handful of cards on my wishlist still, but I'm going to wait at least another 18 months before I think of apping for anything. (I may just wait until I hit that magic 5 year mark. I've got plenty of open lines for what I need, so there's really no excuse to rush into anything.)

 

This being said, I've never been late and usually pay within a week of statement closing. I've never made a payment under $1K unless the balance was less than that. (I'm a firm believer that anything near "minimum payment" sets off an internal flag with lenders.) If I carry a balance, it's usually for maybe a month or two unless I'm strategically playing for a CLI. Chase, Amex and BoA have seen many payments in the $5K-7K range, and BoA once got a $26K payment when I was reimbursed for $22K in testing equiptment I needed for a job. (I get reimbursed for A LOT of work expenses, so my lenders see lots of spend, and generally very large payments coming through to them, and always from the same credit union checking account.) I'm fairly certain this has helped me build a layer of trust with these banks... But I in no way take that for granted.

 

AA is real, and I credit the wisdom and counsel of the financially savvy group here at My Fico for helping me steer clear of behavior that would put me on that road. Props to the OP for sharing his story, and I hope you do join us in the garden to help your profile age and make your existing lenders feel a bit less skittish. Time is the one variable that will make a profile grow stronger no matter who you are. Smiley Happy


 

Some great points here! 

 

App sprees, even if successful, will significantly lower your credit scores for the short term.

 

Spacing out individual apps no earlier than 3-6 months apart has a higher degree of success - much smaller risk of AA and more lower impact on credit score.

 

Picking cards that give a SUB but also will serve a long-term purpose is a prudent stategy.

 

Patience and being willing to sit in the garden for months or even years can be an important element of building a credit file.

 

Minimum-only payments may be a red flag to lenders.  (I agree.)

 

Using the cards you have (heavy spend) is good, even if you rotate the cards you are putting it on.  Banks like to see you use the credit lines they give you.

 

Consistent payments from the same banking account on your cards make you look more stable and trustworthy.  (I agree.  I can imagine if someone was always changing their payment accounts or using a lot of different banks, it might reek of suspicious activity or even money laundering.) 

 

Occassionally putting heavy spend on an account to drive your balance up towards the credit limit can be one way to try to get higher limits.  (The caution here is to try to do it so you don't pay interest on a carried balance.)

 

While I'm not saying that this applies to @ChargedUp, the only thing I would caution others is that if you are carrying a balance for EVEN a month or two on a cash-back credit card, keep in mind that you probably just completely wiped out any cash rewards you earned on that card for months or even years!!  Interest rates on cash rewards cards are almost always a least a few points higher if not even 5-10 points higher than non-reward cards from the same bank, since lenders know they can recoup some of their rewards when people don't pay in full.  That is why I believe everyone should consider having at least one card in their wallet that is just a low-rate, non-reward card for use when they know they won't be able to pay a balance in full.  For those with good to excellent credit, there are cards out there right now that only charge about  7 to 10% interest.  For example, the Navy Federal Platinum Visa is a great card that only charges 8.24%. 

 

For example, let's say you have an unexpected $3,000 expense you know you won't be able to pay immediately, something that happens to a lot of people sometimes.  (A 2017 Bankrate survey showed that 57% of Americans don't have even liquid reserve to cover even a $500 debt.)  Maybe you even put that on a fairly common type of credit card available from many banks that pays 1.5% on everything, so you'd earn $45.  But if your interest rate was at 20% annually, your first month's interest charges alone would be $50!  (That just completely wiped out the cash-back in less than one month.)  Even if your interest rate was 15% which is more typical, you'd pay $37.50 for the first month's interest, so in less than two months, you've wiped out that cash-back.  At 10%, your interest payment drops to $25, which gives you almost two full months before you lose all your cash-back.  Still, it disappears rapidly.  

 

But more importantly, let's look at what happens over time.  Your minimum payment might be only 2% of the balance, which would be $60 the first month.   Most readers will know where I am going with this, but if you continued to pay minimum-only payments, you'd pay this debt off in 264 months (22 years!) and pay 4,184.47 in interest charges!   However, let's say you're able to pay if off with $250 per month, which would take 12 months to pay off the principal, before interest.  That 20% card would take 14 months to pay off and incur $375.49 in interest charges.  The 8% card would be paid off in 13 months but would only cost you $137.43 in interest, saving you $238.06 over financing that $3000 charge for one year. 

 

The same goes for anyone who incurs late fees.  Many late fees today are $35 to $39, and usually at least $20 minimum.  Outrageous.  One late fee can wipe out most of the cash-back earned on a large $3000 charge.  Today, it is pretty easy with most lenders to set up automatic minimum payments and I think most people should have that option enabled on all their cards as a layer of protection.  (Personally, I now pay most of my cards early and sometimes several times a month before the statement is even generated.  However, I still have the autopay enabled.)

 

Of course, an even better strategy would be to roll that balance over to a card that is offering a balance transfer for 12 to 18 months.  Yes, you could apply for a new card to do that, but what I'm talking about is using one of your existing cards.  Some banks are really good at offering these transfers regularly.  You'll usually pay a fee of 3% to 5% but that is effectively your annual interest charge now for the 12 months - 0% interest offer.  It may take a few weeks for the balance to transfer, but you've now minimized your overall  interest charges. 

 

You may say, but wait! Instead of using my low-interest rate card, couldn't I just use my cash rewards card, get the cash back, and then transfer the balance?  Sure, if there was an offer available, either one you could get approved for short-notice or one being offered by your current banks.  But you don't know what offers are going to be available at any time.  Having that low-rate card available at any time is good insurance, in my opinion.

 

*Long-term interest calculations per Credit Card calculator on Bankrate website.

 

 




Total Length of Credit = 35+ years; AoOA (Currently open accounts) = 26+ years;
AAoA = 9.5+ years; AoYA = less than 1 year (Aug 2019)
Total Open Credit Lines Over $400K. Utilization Less Than 1%. Inquiries until May 2020 (TU:1 -- EQ:0 -- EX:5)
*Hover cursor over each card to see name, CL
Message 33 of 51
Frequent Contributor

Re: BofA Shut Me Down. Guess I’ve learned now...


@xaximus wrote:
There are too many differences between profiles to even attempt to understand how AA works. No 2 profiles are a like. What may work for me, may not work for you and vice versa. Generally, the credit game as mentioned before - is a slow and steady race. Do too much too fast, there's risk.

OP - I would definitely recommend gardening for atleast 6 months to a year. Let your profile age and everything else. The last thing you want is to spook anyone else. I have seen one company do AA and then next thing you know, others follow suit.

Very true.  I have opened many cards in the last 90 days and it probably was too much, too fast which is my i am in the garden now...I'm surprised b of a gave me anything honestly. Everytime I call the cc dept now they always mention how they see my multiple checking and savings accounts and try to get me interested in other products...so to me they definitely look at the overall picture in my opinion.  I do think the amount of money in your accounts, income and history with them may play a role.  I surely didn't see myself getting what I did from them recently with everything else I just got.  

Message 34 of 51
Established Contributor

Re: BofA Shut Me Down. Guess I’ve learned now...


@Saeren wrote:
Nobody with less than 5 years AoOA should be spreeing.

That made me chuckle. Good luck getting anyone to heed high expectations like that. You also shouldnt smoke, drink or be overweight. But people do what they want. Not what they should.

FICO- Experian: 797, TransUnion: 781, Equifax: 804 (Updated Monthly)
Message 35 of 51
Community Leader
Super Contributor

Re: BofA Shut Me Down. Guess I’ve learned now...

Lol, trying to hit 5 years AAOA, AoOA, or anything while on myFico is akin to discovering how Brutal went from $500 offers to $5000 with DiscoSmiley Happy
#ChaseCreditCardHobby Enthusiast
2022
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Message 36 of 51
Super Contributor

Re: BofA Shut Me Down. Guess I’ve learned now...


@AverageJoesCredit wrote:
Lol, trying to hit 5 years AAOA, AoOA, or anything while on myFico is akin to discovering how Brutal went from $500 offers to $5000 with DiscoSmiley Happy

5 years of AoOA is easy since even closed accounts matter. 

My point is that banks already know that younger files are risky, sprees kick that risk up even more. 

Sprees are a bad idea in general but the most AA seems to happen to younger files. 



01/2019:
10/2019:

Hover over my cards to see my limits!
Goal cards: Cash+, Freedom.
Message 37 of 51
Senior Contributor

Re: BofA Shut Me Down. Guess I’ve learned now...


@Saeren wrote:


Sprees are a bad idea in general but the most AA seems to happen to younger files. 

I would agree with your assessment, I am just glad I am both old & ThickSmiley Wink

My Average of All used to be well over 10 years, probably 12-13. now its 2.7 to 3.2 depending on what Bureau.

Message 38 of 51
Senior Contributor

Re: BofA Shut Me Down. Guess I’ve learned now...


@AverageJoesCredit wrote:
Lol, trying to hit 5 years AAOA, AoOA, or anything while on myFico is akin to discovering how Brutal went from $500 offers to $5000 with DiscoSmiley Happy

Congrats on That Spade, now that you are a more seasoned Gardener, we can work you a little more. UncleB will be proud of youSmiley Wink

 

SmartieSmiley Very Happy

Message 39 of 51
Moderator Emeritus

Re: BofA Shut Me Down. Guess I’ve learned now...


@M_Smart007 wrote:

@Saeren wrote:


Sprees are a bad idea in general but the most AA seems to happen to younger files. 

I would agree with your assessment, I am just glad I am both old & ThickSmiley Wink

My Average of All used to be well over 10 years, probably 12-13. now its 2.7 to 3.2 depending on what Bureau.


Boy did you set yourself up on this one: "I am both old & Thick" sure could take off on this but, ... will let it go (opportunity lost Smiley Sad )

Starting Score: Unk
Current Score: 847
Goal Score: 850


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Message 40 of 51
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