Recently my fiance said that he was told by a woman at his credit union that store cards don't help your credit. The only cards that help your credit are the regular bank credit cards. How true is this? I understand that an AMEX is going to look better than a Victorias Secret, but credit is credit nonetheless. Am I wrong?
Well, it's not really true. A store card will impact your utilization and available credit ratio in the same way as a traditional credit card. So that could help or hurt you depending on how you use it, just as with any other card. Obvioulsy, a tradtional card provides more spending flexibility and other advantages, but all of the numbers are the same.
Recently my fiance said that he was told by a woman at his credit union that store cards don't help your credit. The only cards that help your credit are the regular bank credit cards. How true is this?
Not true. Always consider the source, validate & corroborate. There are plenty of reputable resources online that refute that claim. Some scoring models may assign more weight to regular cards versus store cards but I'm not aware of any that completely ignore store cards. Store cards are still credit and dismissing them entirely would be a significant oversight.
That said, no card ("store" or "regular") inherently helps or hurts ones credit. It's the usage that makes the difference.
FICO does not differentiate between store cards and bank cards. Some banks (Chase, I think?) may not factor in store cards when calculating history or in internal models.
Thanks everyone. That's what I was thinking, since it's still credit being extended to you, so I wasn't sure why he was told that - by a bank nonetheless. I have a couple of store cards and they have helped with my utilization.
You'd think we could take the advise of these people but you never know. Or, they might have diff rules. A rep at DCU that wanted me to shoot for a c/c told me that INQ's don't really have any negative effect either. lol
Like everyone has said in FICO score terms store accs are treated the same
Not quite true:
The credit mix (is) like 10 percent -- and that looks at the proportion of different kinds of credit. The big categories would be credit cards and mortgages and auto loans. But then within credit cards, it breaks it down into whether you have bank cards or department-store cards
The whole article (interview with a FICO product manager) contains lots of useful stuff on topics frequently brought up here
I do not agree that Chase and some other banks do not factor in your store cards when reviewing your report. When I was denied for a Chase - and spoke with a rep - one of the reasons given was my "high" balance - on my Firestone account - It was not particularly high as far as I was concerned - and the balance did little to impact my overall utilization - but it certainly did factor in the denial.