Utilization rates and maximizing large spends

[Anonymous]

Hey all!

I'm new to the world of credit, but wanted to seek some advice regarding an upcoming large spend period.

My FICO score is around 650. I'm a recently out of college, had a single credit card I haven't utilized in years (but which contributed to an account age of 7 years). Income is around 100k, no outstanding debt.

I am newly engaged and have a large amount of spend in the next year or so as a result of wedding expenses. Before I educated myself, I attempted to sign up for the barclays uber card and was denied.

Realizing my mistake, I did some research, found my actual score and recalibrated the class of cards I was looking for. I used Cap1's preapprove program and got into quicksilver at 2k CL and a 150$ sub for 500 spend.

If I want to maximize my upcoming spend, does it make sense to apply for products with a better sub program in the coming months? I've read that keeping utilization low is important to building credit, if I want to use my Cap1 card for some larger wedding expenses, can I pay it off before the month ends in order to keep reported utilization low? The card will be PIF regardless.

Really appreciate any help, still getting oriented with the game.

[NRB525]

Yes, you can pay off charges on any credit card after they move from Pending to Posted. With Capital One they are as good as any for getting the payments cleared. 

Yes, targeting to get your balance lowered in the days before your statement is processed is a good way to manage reported utilization.  

Question to clarify what you mean by “haven’t utilized in years”. Does this mean you have not had any credit card statement balances reporting any amounts except zeros for years? If that is the case, it might relate to your 650 score.  Are there any late payments in your past? 

[Anonymous]

I guess my main question is what is causing your score to be only 650?  I'm guessing either payment history issues, high utilization, or a combination of both?  Whatever the issue, you'll want to rectify it prior to apping for products or you'll expect either denials or low-limit/starter bucket approvals.  Your income and length of credit history are sufficient, so it really comes down to the factors holding back your score.

[Anonymous]

I'm still pretty new to this, so not 100% sure. I've done the credit check through cap1, no late payments. All categories are excellent except for available credit which is showing as 0$ and recent inquiries which shows 3 / 24.

I had my parents open the account for me 7 years ago(which is the reported oldest credit line), maybe they did it so that I'm a sub-account or some such, and the CL on that old card might not show up under my report?

[Anonymous]

In conversation with my folks, it's an additonal card on my parents account. They said it should be reporting on my credit, but maybe the CL from that card doesn't count towards my report. 

[Anonymous]

What's the source of your "around 650" Fico score?

I'd suggest heading to creditscore.com and grabbing your free EX Fico 8 score.  Along with that you'll get some good summary info of your accounts including payment history, utilization, etc.  Based on that you can report back what you're seeing and what your opportunities are.

Someone with a brand new credit file that's 6 months old and clean with low utilization will debut often with a Fico score in the 700-730 range.  The fact that with a more aged and thicker file you're coming in well below that is suggestive of only those 2 things I referenced earlier... payment history issues or utilization (amounts owed) issues, or both. 

[K-in-Boston]

I would grab your 3 credit reports from annualcreditreport.com and check to see which (if any) of the credit bureaus that card is reporting to.  It should factor into your utilization, age and scoring. CapOne uses a VantageScore score and their credit information while giving you your actual VantageScore 3.0 score (for TransUnion I believe) may not display the correct numbers that your score is based on as they usually discard closed accounts and authorized user accounts, which do factor into scoring.  Where did you obtain your actual FICO score, and which version?  You can get your Experian FICO 08 free from Discover at creditscorecard.com

[Anonymous]

Thanks for the advice folks, very much appreciated!

I went to creditscore.com, and they have my number at a 708. They do show a quite high credit card debt of 9.5k. Talking to my parents, this debt is from the card I have which is a subcard of theirs. 

Maybe this is the culprit? There are no late payments for this card, but it could still be high utilization. I feel like i should stay on this card since it's the only one noted as open on my account, how big of a deal is the high utilization?

[K-in-Boston]

It really depends on the amount of utilization. $9500 on a $10,000 card is murder on your scores. $9500 on a $100,000 card is perfectly fine. What is the limit showing on the card? All in all, the age and presence of the card is likely helping your score regardless of the utilization if you have very limited credit of your own. However, getting approved for credit might be difficult if the card is nearly maxed.

[Anonymous]

The report currently shows me at 0% utilization and 0 credit, even with the 9.5k debt.

I will look into the limit on that card, but as you said, it's likely a net benefit anyways. I don't have full control over that utilization amount, as the current debt on that card is my folks. I haven't used that card in years myself.