Credit increase, time

[Anonymous]

Hi Alex.  Remember that you opened a huge number of accounts, probably all of them credit cards, very recently.  It could be that half a dozen or more are just starting to hit TU. 

Do you have a tool that enables you to check your credit reports (not score, but reports) and to do so frequently?  Any time you are puzzled by a score drop you should always be looking at your reports to see if there is anything that looks unexpected.  Be sure to look not just at the accounts reporting but all the different fields on each account.

So that's a big idea: always look at credit reports.

Another big idea question: is it clear to you why you opened so many accounts in such a short period of time?  That's a good question to ask yourself in life -- why am I doing X?  Although it is true that one needs more than just one credit card to eventually get an ultrahigh score, you don't get really any scoring benefit for having more than 3-4 cards. 

If you don't see anything unexpected on your TU report (compared to your other two reports), you should just give yourself some time, keeping your head down and always paying in full -- and stop opening credit cards for a good while.  Your profile will stabilize and you will get a sense of what your scores actually are and are likely to be.

PS.  You have mentioned your scores a few times.  What service are you using to get and monitor your scores?

[Anonymous]

Quick note to Damac and Alex:

Both you guys seem interested in what kinds of medium and long range behavior would be good for your credit scores.  One thing you should be doing for sure is paying in full (or PIF).  This is as opposed to carrying a balance.  Allow your cards to report balances, sure.  But in the week or two after the statement cuts, be sure to pay it in full.

This is not just wise financial management.  PIF-ing classifies you as what is called a transactor, rather than a revolver (which is what people who often carry a balance are called).  Transactors are known to be much safer credit risks than revolvers, so you want to establish yourself in your reports as a transactor as soon as you can.

The FICO 8 score does not currently make the T vs. R distinction, but many creditors are using other products that do make that distinction and in the future this will be VERY common.  So get started on establishing a history as a transactor now.

[Anonymous]

Hi CreditGuyInDixie,

Thank you for advise.  My point is simple -  utilization. More cards - more limits - low util and more money that you can spend without hurt your score. I think it's the point for all here.)

About TU - nothing unusuall except inquaries (I have approximetely 20 on each CR).  And I have strange inquary from "CREDCO-SCM".  ?!       Also I have 2 cards with util more 60%.  But all util 12%.  So maybe this is the issue.  But I didn't expect if 2 of 15 cards with util 60-65% can drop my TU score by 60-65 points.   But EX and EQ scores doesn't dropping.

[Anonymous]

I understand if I left balance when statement cuts I must pay interest. 

If I PIF after statement cuts, bank has money and has interest.  So I prefer PIF before statement cuts.  Maybe it's not so good for lenders.  So obviously scoring models created more for banks and creditors.  

[Anonymous]

Hi Alex.  Glad you are thinking hard about your credit.  Wish you all the best for it.

Wanting to have a very low utilization is very commendable.  Good for you!  But it's just not a good reason for adding new credit cards.  A guy with one card and a total credit limit of $300 can spend as much as he wants/needs and still have a utilization in the range of 1-5%.  Now there are definitely good reasons for wanting more than one card.  And as a long term goal it certainly is reasonable to eventually plan to have a much bigger CL (e.g. eventually $30,000 rather than $300). 

But if somebody is paying in full, then the only real advantage of a big CL is convenience.  It does not in itself enable you to have a low utilization that you were not already perfectly capable of obtaining with the much smaller CL.  And the big total CL does not give you a better FICO score than the small CL does.

If you are interested in hearing how to have an ultralow utilization while spending whatever you need to, let me know and I'll explain.

PS.  I still feel that you will benefit a lot from allowing your credit profile to stabilize in the way I described earlier.  It sounds like you have no immediate need to buy a house or a car, so just using your cards naturally, keeping each card at under < 40%, paying in full, and opening no more lines of credit will help you a lot.  In 3-4 months things will be stable and you can try zeroing out all cards except one with the remaining card having a small balance.  That will give you an idea about where your score is.  And then after all these accounts and their associated 20 inquiries are at least 1 year old, you will see again a good deal of improvement. 

You have no negative data on your report, right?  No lates, collections, etc?

[Anonymous]

No negative, no collections.

But I suspect that inquary from "CREDCO-SCM" could hurt my TU score.  Can it be true?

And it's a little frustrating that you can not predict your score.  I have 2 unexpected jumps from EQ - 1st down by 50 points and then up the same. It was within recent 2 months. Now drop from TU,  I hope EX will be OK.  They stable for now.  

[Anonymous]

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@Anonymous wrote:

I understand if I left balance when statement cuts I must pay interest. 

If I PIF after statement cuts, bank has money and has interest.  So I prefer PIF before statement cuts.  Maybe it's not so good for lenders.  So obviously scoring models created more for banks and creditors.  

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Nope.  You are mistaken.  Paying the full amount on your statement after it cuts does not result in you paying any interest to the credit card company. 

The way credit card balances work is this.  At the end of every billing cycle, your card produces a statement.  This is the Amount Owed -- the same as the balance at the end of that cycle (plus fees, etc.).  That amount is reported to the three credit bureaus.  You then have maybe 25 days or so to pay your bill.  If you pay that amount in full, you owe no interest.  To PIF means exactly this: paying the full amount that appears on your statement, after the statement cuts but before it is due.

To pay your card down to $0 before the statement cuts is fine if you want to.  It's just that you do not need to do that to avoid paying interest.  And there is something nice about creating a record on your credit reports of you owing money on the statement and then paying it in full. 

There is a totally different thing which is called carrying a balance.  That where you do not pay the full amount on the statement, but do pay the minimum payment.  Whatever amount you did not fully pay is carried over to the next statement and THAT you do have to pay interest on.

[Anonymous]

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@Anonymous wrote:

No negative, no collections.

But I suspect that inquary from "CREDCO-SCM" could hurt my TU score.  Can it be true?

And it's a little frustrating that you can not predict your score.  I have 2 unexpected jumps from EQ - 1st down by 50 points and then up the same. It was within recent 2 months. Now drop from TU,  I hope EX will be OK.  They stable for now.  

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No, a single inquiry is not hurting your score. It is the total inquiries that can have an impact. A cursory search indicates that Credco is involved in pulling reports for auto loans. Have you applied for one?

[Anonymous]

No, I already have auto loan.  

So I thought it was something like security inquiry or something like this.  

I read about this Credco inquiry, maybe even here and most people wrote the same things - no applied  and then score dropping.  Strange.  

[Anonymous]

It's what I found

https://www.creditkarma.com/question/in-my-inquiry-account-fa-credco-is-listed-where-did-this-inquir...