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Store card vs. "Regular" credit cards

Your FICO® Scores can impact your loan interest rates, terms, approvals and more.
Frequent Contributor

Store card vs. "Regular" credit cards

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?


Starting Score: TU 607, EX 606, EQ 611
Current Score: TU 675, EX 671, EQ 654 - FAKO scores TU 744, EX 735, EQ 728 - I wish these were my real scores!
Goal Score: 750 across the board. Simulator says 806 if I stay on track for 24 months
Message 1 of 21
20 REPLIES 20
Established Contributor

Re: Store card vs. "Regular" credit cards

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. 

Chase Freedom: $1500, Citi Diamond Preferred: $3000, Barclays: $3900, Chase Disney Visa: $1500, Chase Southwest Signature: $5000, Citi TY Preferred: $3000, Cap One Platinum: $1750, Cap One Platinum Rewards: $2500, Orchard Bank: $900, Kay Store Card: $6600, PayPal $2200
Message 2 of 21
Senior Contributor

Re: Store card vs. "Regular" credit cards


@NibblesTreats wrote:

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.

Message 3 of 21
Frequent Contributor

Re: Store card vs. "Regular" credit cards

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. 

Message 4 of 21
Frequent Contributor

Re: Store card vs. "Regular" credit cards

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.


Starting Score: TU 607, EX 606, EQ 611
Current Score: TU 675, EX 671, EQ 654 - FAKO scores TU 744, EX 735, EQ 728 - I wish these were my real scores!
Goal Score: 750 across the board. Simulator says 806 if I stay on track for 24 months
Message 5 of 21
Frequent Contributor

Re: Store card vs. "Regular" credit cards

Like everyone has said in FICO score terms store accs are treated the same however some lenders ignore store accounts while evaluating your application for new credit. Ex: bank of America and Chase
Message 6 of 21
Established Contributor

Re: Store card vs. "Regular" credit cards

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

FICO: EQ 768 | TU 813 | EX 781

Amex BCE $25000, SFFCU Visa $15000 + LOC $5000, USAA Amex $6000, USAA MC $7000, Cap1 $8000, Freedom $12000, Slate $500, Barclays "RIP" SM $11500, USBank Cash+ $7500, Citi Diamond $7900, Citi Double Cash $3700, Care Credit $13500k.
My Credit Repair Journey
Message 7 of 21
Mega Contributor

Re: Store card vs. "Regular" credit cards


@mnavas wrote:
Like everyone has said in FICO score terms store accs are treated the same

Not quite true:

 

http://www.bankrate.com/finance/credit-cards/closing-credit-card-dings-credit-score-3.aspx

 

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

Message 8 of 21
Established Contributor

Re: Store card vs. "Regular" credit cards

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.

*Note to self* Remember why and for how long you had to rebuild in the first place! One Day at a Time, One Day at a Time!
Message 9 of 21
Valued Contributor

Re: Store card vs. "Regular" credit cards

Its up to the lender that you are seeking credit from. If chase only wants to see big lenders on your report like amex, discover, etc and do not care about store cards than thats really the only time you'd come into a problem. personally, i see no need for store cards.
CHASE FREEDOM | AMEX BCE | | BOFA REWARDS | CITI TYP | Quicksilver | DISCOVER IT | Sallie Mae | CHASE CSP
--------$32,000-------------$30,000-----------$30,000-----------$30,000-----$13,000---------$18,200----------$15,000---------$6,500----

FICO - TU: 780 EX: 784 EQ: 781
Message 10 of 21