Understanding and reviewing CC's

[xaximus]

Admins/Mods, please move to correct category if posted to incorrectly (sorry!)

Hi everyone, new here but have been reading the forums for months now, been using the tips and tricks I've learned to fix and clean up my credit. Big thanks to everyone on here for guiding me into being better and smarter with credit. I had a few questions regarding credit though (sorry if they have been answered before!)

I'll list out all the cards that I have, when they were opened, and CL.

Alliant Credit Union Visa Rewards- 7/2018, $10k
Amex Blue - 4/2016, $1k > $1.5k
Amex Blue Cash ED - 6/2018, $6k
Amex Cash Magnet - 6/2018, $6k
BOA Platinum Plus - 2008, $2.4k CL > $5k
BOA Cash Rewards World MC - 6/2018, $13k
Chase Freedom - 2011, $300 CL > $5.3k (June 2018)
Chase Freedom UL - 6/2018, $9.6k
Chase Slate - 1/2018, $6.2k
Chase Southwest Rewards Premier - 1/2016, $2.5k > $7.5k
Cap1 Platinum - 4/2014, $3.5k
Cap1 QS - 11/2014, $4k
Citi Double Cash - 2016, $1k
Citi Thank You Pref - PC from Diamond Preferred in May 2018, $2.3k
Discover - 12/2017, $13k > $13.5k
Home Depot - 2009, $5.2k

I have 3 installments - 2 cars and one student loan. 1 car I cosigned but there were late payments which definitely has hurt my credit. I think the last 10 months has been on time but prior to that, it's been late pretty often. Is there anything I can do about this? I have all my credit cards on PIF other then the following - Discover, (about 4k balance, paying it down now), Cap1 QS (700 balance), Chase Slate/Southwest (1200 each). Everything else is zero or PIF every month. I have added a couple cards in the last 2 months and definitely need to garden for now so that my CL can update with all the new limits. What else can I do help raise my score? Should I combine the Cap1 cards into one? I dont really use the Platinum card as it's pretty useless rewards wise. Will it hurt combining them since the QS is a younger card?

AAoA shows 4.6 years

Oldest card - 11 years.

FICO Scores

Amex - 704
Alliant - TU - 710
BOA - 684
Chase - 712
Citi - 723
Discover - 684

Update - Citi closed my Double Cash card for inactivity on July 1 apparently. I did not know this and called to have this reactivated. It shows on my account now. Also, I applied for the Citi Simplicity card as well prior to the closing of the Double Cash card, I don't think that was a good idea but not much I can do now. It shows as decision pending.

[HeavenOhio]

Neither of your Capital One cards is your oldest card. If the combined account were to ever become your oldest, by the time that happens, the seven months difference isn't going to matter.

As far as scoring, the number one thing would be to check out the Rebuilding forum for strategies to get rid of your baddies. In particular, check out BBS's Saturation Technique thread.

Outside of that, the only thing I can see is tweaking your utilization. It's already in great shape, but there are likely still some points on the table.

The first thing I'd do is bring your Discover balance down to 28.9% or below. If you're paying interest on that balance, pay down to 27% to ensure that you're still below 28.9% when interest is added at statement time. This addresses the "individual card utilization" portion of your score, which is determined by the card with the highest utilization. I'd bet on a score bump if you do this.

The next thing I'd do is snowball (pay off) the three cards with smaller balances. You already have a small number of cards with positive balances and may already have all your points for this area, but it's still possible that you'll see a gain.

One last question. Are you in the market for new credit relatively soon? The reason I ask is that your sampling of FICO scores indicates that you're in reasonable shape. Maybe it'd be more prudent to pay down your balances in a way that makes sense for other reasons (like interest) and let the scores take care of themselves.

[HeavenOhio]

I forgot this. Check with Capital One to see if there are product change offers on your Platinum. If it can be turned into a Quicksilver or Savor, you can combine and keep the older card.

[xaximus]

Thanks for the response and advise! I combined the Cap1 Platinum and QS and kept the QS card. I'm currently paying off the cards now, should zero out the Discover in a month or so, and then the others. I should be able to zero balance all the cards in 3 months. 

Should I stick some bills on each card company (I.E. 1 bill on BOA, 1 on Amex, etc.) so that a balance reports of some kind every month and do a PIF for all? I figured I'd use 3 cards (food + gas + tolls) so that 3 will have some balance while others are PIF. Is that a good idea? Also, as per reading the Saturation Technique, I'm not sure how much it can apply to me as the lease was signed by a family member and I cosigned. Even though, they made the payments and I never made one. I was on the lease. Not sure what I can do because of that. I believe that's what really has been hurting my score.

Thank you!

[HeavenOhio]

It's definitely the baddies that are hurting your score. You might want to ask about how to go about removing baddies related to co-signing in the rebuilding forum. The readers over there are likely to be better equipped to address that than the group reading here.

Credit card balances are the only thing you can really control on a regular basis, and in your case, you're already in pretty good shape. To ensure that you top out your utilization points, let a small balance report on one card (at least $5 but not much more than that) with the rest of your cards reporting zero. The card with the positive balance should be a major card rather than a store card. And it's easier if that balance is on something other than a Chase card (because they report zero whenever you pay to zero). We call that AZEO (all zero except one). A search for AZEO should bring up lots of information.

You may find that your score remains the same if you're somewhat beyond AZEO, though. The general advice for optimal scoring is under 8.9% overall, no more than 28.9% on any single card, and no more than a third of one's cards with positive balances. Some people report gains for going below those numbers, though, particularly with the number of cards with positive balances.

You might want to bring your balances to AZEO to get your top score, then experiment a bit to see what kind of leeway you have. After you hit AZEO, let larger balances report or try letting more cards report positive balances. You might find that your score stays at its topped out state. Or you might see a ding that you deem to be acceptable.

[xaximus]

I will reach out in the rebuilding forum.

 Credit card balances are the only thing you can really control on a regular basis, and in your case, you're already in pretty good shape. To ensure that you top out your utilization points, let a small balance report on one card (at least $5 but not much more than that) with the rest of your cards reporting zero. The card with the positive balance should be a major card rather than a store card. And it's easier if that balance is on something other than a Chase card (because they report zero whenever you pay to zero). We call that AZEO (all zero except one). A search for AZEO should bring up lots of information.

Correct me if I'm wrong but I've heard both sides of the argument where some say to report a small balance on one card but to have all other cards as zero, and also I've heard to have small balances report on each major company card (i.e. BoA, Chase, Cap1, Citi, Amex, Disco, etc. ). Some say to carry a small revolving balance, others say PIF every month in full. Is this all a matter of testing and playing around to see what works best? Or is there any specific method that works best? I will be paying off all the cards with in the next 2-3 months and carrying a small balance monthly on 2-3 cards (one for gas, one for groceries, other for misc. purchases, all have different rewards hence why the multiple cards.)

As before, thank you again for your insight, it's been a huge help!

[HeavenOhio]

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@xaximus wrote:

Correct me if I'm wrong but I've heard both sides of the argument where some say to report a small balance on one card but to have all other cards as zero, and also I've heard to have small balances report on each major company card (i.e. BoA, Chase, Cap1, Citi, Amex, Disco, etc. ). Some say to carry a small revolving balance, others say PIF every month in full. Is this all a matter of testing and playing around to see what works best? Or is there any specific method that works best?

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The gurus in the scoring forum have tested very throughly. The top scoring benefit for most profiles occurs when:

• Total balances add up to 8.9& or less than total limits
• Hightet card utilization is at 28.9% or below
• A small number/percentage of cards report positive balances

Occasional reports indicate a score change at a level under 8.9% utilization, possibly around 5%. Likewise, some have reported changes at less than 28.9% individual card utilization. These are unusual and are difficult to test. But because the data points appear to be valid, it's something to keep in mind.

The reason for AZEO is that you don't have to worry about the details. You know that the revolving portion of your score will be at its best. If you've been bringing your balances down and AZEO doesn't offer any further benefit, you'll know that you have some leeway. Or, as I mentioned, you can bring yourself to AZEO, then test higher balances and/or more cards with positive balances to see how your profile reacts.

To clarify a couple of terms, in industry jargon, "carry" a balance generally means to "revolve" a balance and likely pay interest. Here on the forum, we often see "carry" a balance to refer to any balance that posts. And in plain English, I suppose it could refer to any balance at any time. Oftentimes, it's necessary to clarify that we're all speaking in terms of the same definition.

Pay in full is another one that gets thrown around loosely. Generally, the term means to pay your full statement balance by the due date, which will avoid interest. We often see it used to bring any current balance to zero, which is pay in full plus more. The latter scenario is better referred to as "pay to zero."

To do AZEO, you'd pay to zero before the statment cuts on all of your cards except one. Then on the remaining card, you'd pay in full after the statement cuts.

As far as reporting a balance on every card, there's no evidence that it will benefit your score, but there's a lot of evidence that it will hurt it. A small handful of profiles, generally belonging to people with very high scores, can "get away" with it. But they're not benefiting.