Can I do This Without Adverse Action?

[stillirise]

I am no credit expert; I can't seem to get my score above a certain level no matter what. However, I would consider myself adept in finances. I am shopping for new loans with lower interest rates  to replace much higher APR's that I currently have. I have a 20 year credit history but my revolving and installment accts are fairly new. I previously held cards that I never used and they were subsequently closed. Since I read in one of these forums I needed different types of credit; I picked up different types of credit.

Now, I would like to trade some of my high interest accounts for lower rates but I'm afraid I will be penalized for applying. Is there some way to do this with out creditors assuming Im trying to over extend myself?

It seems like a catch-22 if I apply for lower rates the inquiries destroy me. Also if I pay off the older accounts..It seems the new account age will take me down a few notches too. The older credit card accts were deleted from my profiles (I didn't know they did that)

I think my intentions are legitimate and we should be able to lower our interest and payments when the opportunity comes. I can't help but feel I'm being intimidated to keep the higher cost accts. I want to refinance and transfer balances. Is there any way to do this painlessly?

What's the point of working toward the higher scores if we are locked in with the original creditors?

Thanks

[Anonymous]

I would check with local and national CUs and see if they can help you.  They often have low APRs and BT deals.

Another suggestion would be to look at Lending Club.

[stillirise]

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@Anonymous wrote:

I would check with local and national CUs and see if they can help you.  They often have low APRs and BT deals.

Another suggestion would be to look at Lending Club.

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I agree..I have loans via my credit union. I also just joined Lending Club. They told me they only to soft creit pulls but I see the inquiry on Experian. The credit union still does a hard pull for everything. I think I qualify for better rates and I would like to shop for the better rates but the inquiries seem to hurt.

I like the Lending Club and they did offere a slightly better rate. However, what I had in mind was a 12-15 months 0% balance transfer card.

[Anonymous]

If you have high utilization, or derogatories, it may be difficult to get a 0% BT card.

But it pays to do a lot of research, to see if you qualify for something.

For example, I'm a member of PSECU, and they have generous CLs and a 2.9% BT rate.  Many other people qualify for NFCU, which is also very generous and has frequent BT offers.

Penfed is hard to qualify for, but they also are running a 0% BT offer at present.

[stillirise]

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@Anonymous wrote:

If you have high utilization, or derogatories, it may be difficult to get a 0% BT card.

But it pays to do a lot of research, to see if you qualify for something.

For example, I'm a member of PSECU, and they have generous CLs and a 2.9% BT rate.  Many other people qualify for NFCU, which is also very generous and has frequent BT offers.

Penfed is hard to qualify for, but they also are running a 0% BT offer at present.

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My utilization is good the only derog I have is a slow pay in the past 6 yrs. I just applied for the AMEX because of the info I read on this board. I was approved and I'm really excited about it. However, it doesnt have a 0% BT it does have 0% 12 month purchases. I also read a post in here about the NFCU...I am investigated the membership requirement now. Thats one of the reason's Im concerned about applying. I see the light at the end of the tunnel...just afraid to go toward the light.

I want to transfer a high balance credit acct and I'd like to refinance some mortgages. How do I do this without setting off alarms and makng my credit worse? If I get the new accts then pay off the higher cost accts, will it make a difference? Will it hurt the acct age of my credit rofile? I ask because the credit card accts I had over 10 yrs ago are no lnger showing on my report. Now it says my average acct age is only 3.5 years and my credit products complain about my "short revolving acct history"

Should I hold off and try many months later? Am I worrying too much ? I dont want to mess this up!

[Anonymous]

A few comments.

1.  I can't say whether you should or shouldn't get an Amex.  However, it doesn't do anything for transferring balances.  If it's got a promotional 0% purchase rate, you can do an indirect BT by letting the balance on the Amex go up for a while, and using the money to pay off other high APR loans.  I'm not necessarily recommending this.

2.  If your AAoA is 3.5 years, across N accounts, and you add one additional one, then the new AAoA will be:

   3.5 * N / (N + 1)

For example, if N is 6, then the new AAoA would be 6/7 of 3.5, which is 3.0.  AAoA is important, but not as important as utilization and derogatories.

3.  There are at least three aspects to utilization: (a) overall, (b) per account, and (c) proportion of accounts with balances.  Sometimes you can improve this situation by paying balances before the statement date, or moving balances from one account to another, or clearing out all the small balances entirely.

4.  I wouldn't worry about applying for new credit, but I would do so only after doing your homework, and not willy-nilly.  Only apply for something that really benefits you.  I would look especially at CUs, and see which ones you qualify for, such as Alliant, DCU, NFCU, Penfed, PSECU, SDFCU, and so on.

Another thing you could do is take a current copy of your report around to some local CUs in your area, and sit down and talk to a loan officer, and see if they can help you refinance.

Here are two references on CUs that are open to anyone:

http://www.depositaccounts.com/blog/the-big-list-of-credit-unions-open-to-anyone.html

http://www.creditcardconnection.org

[RobertEG]

Yes, sometimes creditors will simply delete closed accounts with no balance, causing loss of their age in your AAoA, and possibly also your oldest acct.

Closed accts are still included in AAoA, but you have no control over possible deletion of the acct.

It's prudent business on their part, as they no longer need to maintain their reporting, or entertain any possible disputes should there, for example, be old derogs under the account.  Housecleaning.

However, if you simply dont close them, but rather use them sporadically and pay them down to a small amount or to $0, they wont delete the account.

By keeping it open, you would also retain an indivicual revolving with low % util, or if paid to $0, also, improve your %cards with balance.  As mentioned, FICO scores both the % util on individ accts and the % accts with balance.

The only reason I would close the higher APR cards is if they carry an annual fee that you wish to avoid.

At least that would avoid the double hit on AAoA, with the addition of an acct at 0 age, and the loss of an acct with age higher than your current AAoA.

[stillirise]

I agree with the utilization theories, Ive seen them in action. Thats how I learned the super low limit cards romising to help your creit are really a joke IMHO. A card with a 300 limit and a 60 fee is pretty useless. I currently have an 8% utilization and no derogatories except for the late pay over a year ago. that was the only late pay in more than 6 years. Thats for all of my accts 15 total. I dont understand why my score wont go up. It was down even before last years late payment. Anyhow thats another post.

I am applying for new cards for two reasons: 1 I want better rates 2 I want better limits. I want accts I can actually use to my advantage without being penalized for using them.I know everyone assumes my payment history and ustilization has to be really bad but...it is not. I have read some of the posts in here and I see a lot of posters with better cards, better limits but worse scores.

Not trying to criticize aynone at all just asking for advice on how to do the same thing. I know income plays a role and while Im not wealthy its not bad.

I took the challenge and posted the scores I just pulled from MYFICO. I am hoping to see my scores go up. ...I feel so beaten by the system I really expect them to go down again with out any real explanation.

I am trying to remain optimistic.

[takeshi74]

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@stillirise wrote:

I dont understand why my score wont go up. 

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The derog is holding you back.

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@stillirise wrote:

I know everyone assumes my payment history and ustilization has to be really bad but...it is not. 

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It doesn't take much to affect your payment history.  See if you can GW the derog.

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@stillirise wrote:

Also if I pay off the older accounts..It seems the new account age will take me down a few notches too. The older credit card accts were deleted from my profiles (I didn't know they did that)

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Paying does not affect AAoA.  They should continue to report for 10 years if they were in good standing.  You'd need to clarify exactly why those accounts were closed and removed from your reports.  Or how you're determining that this is the case.  Given the context of your posts it's possible that you're misinterpreting things or relying on inappropriate sources.

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@stillirise wrote:

What's the point of working toward the higher scores if we are locked in with the original creditors? 

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The point of the higher scores should be obvious.  We are not locked in with the original creditors.  You're currently in a state of building/rebuilding.  It's a slow process so prepare yourself for the marathon.  There aren't any quick fixes.  Until your credit improves it's going to be difficult to get the favorable terms (limits & APR's) that you're looking for.

You indicate that you have a bunch of new accounts and you just need to manage and build them.  While you may have a 20 year credit history it's your AAoA that's taken into consideration.  Definitely hit the FICO scoring subforum and read up a bit for a better understanding.

[AndySoCal]

You need to look at your credit report and in the section that says what is hurting your score there should be reason((s). Interest rates on loans does not help scores it may make making the payments a little easier on the budget.  Opening new accounts  regadrless of the creditor does not help your score in the short maybe in the long run but not with any certainty. There may be posts that say it help but that was in that posters particular situation it is not a one size fits all solution.  To help with the score reaosns here is a link below.

http://www.scoreinfo.org/FICO-Scores/Pages/Score-Factors.aspx

Hope this helps