@Anonymous wrote:
Hi everyone,
I thought it might be helpful for us to post on the board some of the credit card lessons we have learned during the course of the year in the hope that these may help others, both those new to the board and seasoned members as well (we are all always learning, are we not?)
I'll start the thread with a few:
1) Reduction can be a good thing. I've added credit and am now culling the herd to further refine my profile into the profile I want. I'm reducing down from 230k in credit and may even decide to get down to 170k over the next 9 months in order to not show "too much credit" to creditors. It's great to both add with a purpose and to downsize when needed.
2) Adding with a purpose. I planned in advance which cards I wanted to add when I went on my spree in July. Now that I have those cards, I'm culling some from the herd that will be less helpful to me going forward.
3) Needs change. A card that may have been helpful to me one year ago may not be as helpful to me now, and it's important to have the flexibility to realize that.
4) Utilization is key. When I started reading posts on myfico early this year, I didn't understand utilization as well as I do now. I never maxed out a card, but I often kept cards at 50% of credit limit. Reading and learning about utilization has helped me keep my overall utilization to between 4%-6%. I even get very watchful in a good way if an individual card exceeds 20%, just so I don't repeat prior utilization mistakes.
5) Be aware of what is going on in the credit world, and keep your knowledge current. I've learned a lot from fellow myfico members and that knowledge has helped me in my approach to lenders. For example, I've always had a great relationship with Barclay; however, seeing some of the posts on here about certain trends others have experienced has helped me to treat certain lenders even more conservatively.
6) Dramatic moves in the credit world are probably not a good idea. I have read situations on my fico where members have made dramatic moves in terms of utilization spikes, adding 15 cards all at once, opening and closing cards rapidly, or other moves that can spook lenders, and I am careful to keep that knowledge in mind when considering decisions of my own.
7) Learn from mistakes. Learning is a process and is ongoing for all of us. We've all added cards that we question ourselves about later and say, "what was I thinking?", even when we have a plan. Different things happen and learning is key.
8) Share knowledge with others in a friendly way. We all have something to share, but none of us has all of the answers and being humble is important. Treat others as fellow learners in the journey, not as if any of us are an expert and the other person is not quite where we are at in terms of knowledge.
9) Credit is a journey, not a race. It's exciting to see others adding credit yet important to do so in a measured, planful way. I'm not new to credit, but when I see people who are new to credit trying to add too quickly, I hope they will learn valuable information from others on the board that there isn't any rush to build, especially if your profile does not support adding many cards at once.
10) Diversification is important. It's best not to put all or most of your eggs in one basket with a particular lender, or with too many of the same types of lenders. A diversified mix of lenders is really helpful given the ups and downs of the financial world today.
11) Respect the difficult journeys of others. We all have our individual challenges. I feel fortunate that I've never had negatives in my credit history, and when I see others who have built their way back from some really challenging negatives into a success story, I have a great deal of admiration and respect for that. Well done!
I like all but the ones highlighted more. Number six is part of the highlight because it is time this community in 2016 not encourage people to app. just because... We have worked hard to build it so lets maintain quality over quantity.
When we see someone whose profile we don't know alot about, lets probe a bit further for more information and if what they want isn't ideal, lets suggest that. Sometimes, tough love is a good thing. It may not be evident at that moment, but they will thank you later.
. Could of used alot more 1990 love!
