Two questions: about inactive cards and about negative items on my Credit Report

[Anonymous]

This is a two-parter. I apologize if these have been answered before but I've been lurking awhile and haven't yet seen the answer to my exact questions.

1) I recently obtained my credit history report and saw I have two credit card accounts listed as inactive, both with balances of $0. One is from '04 and one is from '06. Assuming it's possible to still make charges on them, is it worth it? I have read that having a higher credit limit on existing cards can help my util %, but I carry no balances on my three active CC's. My understanding is that if my balance is zero, I have a low util rate, right? So would there be any point then to trying to increase my credit limit? (We plan on shopping for a mortgage in a year and I understand having too large of a credit line can actually look bad to mortgage cos, because it suggests debt one might incur, so I don't want to activate those crads unless it makes sense.)

2) I've generally had an okay credit score (mid to high 700s in the past) and I was surprised recently when a CC I've had for several years with Chase lowered my CL from $2000 to $600. At the same time, another, new CC I'd applied for, also through Chase, was turned down. I checked my CR for the first time in 3 years (okay, I'm not the most hands-on of credit-checkers) and saw the following "potentially negative" item: I'd had two late (30 day) payments on my existing Chase CC -- one in 04 and one in Nov 08. Does that seem like enough to incur such a penalty? I'm wondering if there's some more nefarious reason, though if there is, I didn't see it on my CR.

I have yet to pay for and obtain my FICO score -- that's my next step. Do I have to pay $15 every time I want to see it?

Thanks all.

[Anonymous]

Welcome to the forum!

Don't know about the inactive cards, I'll leave that for others.  But charge something small and let the balance report on one of the three active cards each month.  You get dinged in your score if you show no recent use of credit.

Multiple threads on these boards regarding Chase and their tightening credit standards lately.  Banks are paranoid right now.  Your recent '08 late hurt you with both Chase and your score.

Check out the products link at the top of the page for descriptions of each offered.  Your score report will explain negs and plusses in detail to you, and then you'll know much more about your personal credit than you now do.

Good luck on the house hunting, and please post any further questions you may have!

[GregB]

My score has typically been mid 700s. When my 30 day late from 2002 dropped off after almost 7 years, I saw a 10+ point increase. Your more recent late in 2004 is likely causing more than 10 point hit. A late from 2008 would be much higher. If your true FICO (not a FAKO) was 750, those two lates are likely to take you into the 600s. Goodbye decent deal on mortgage. Make very sure it doesn't happen again! For it to show as a 30 day late, it means you weren't just late, you were late and then 30 days went by. That is, and should be, devastating to your score. A higher score means a bigger hit.

I think you should figure out what "inactive" means on those accounts. Are they some one-time thing like a "12 months, no payment, no interest" appliance purchase or something like that? If they are a credit card for general use, I would get them active and use them enough to keep them active. That normally means some use, even if it is just $100 every few months and then PIF. Use them for some normal use, DON'T spend money you wouldn't spend otherwise to show activity!

Having too large a credit line "because it suggests debt one might incur" has been debunked long ago. My last mortgage was $250K 10 years ago. At the time I had more than $250K available credit on CCs, with $130K available on just two cards. There was no discussion about too much credit available. I do recall there being some discussion about that subject when I bought one house in 1981 and I seem to recall that I had to show most CCs were for business use. Hard to remember the specifics that long ago.