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Strategy for Maximizing Credit Score

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driftless
Valued Contributor

Re: Strategy for Maximizing Credit Score

I would not add cards just to add cards.  Once your cards age and you add a mortgage you should be fine.  I would look instead at the cards that you have and see if there is a type of card that you would like to add the mix.  For example do you and Fiance like to travel?  If so, decide which ecosystem that serves you best, e.g. - Amex, Chase, etc., and then adjust your wallets accordingly.  

CSR | Amex Platinum | EDP | QS (2)
Amex Blue Business Plus
Message 11 of 19
SouthJamaica
Mega Contributor

Re: Strategy for Maximizing Credit Score


@driftless wrote:

I would not add cards just to add cards.  Once your cards age and you add a mortgage you should be fine.  I would look instead at the cards that you have and see if there is a type of card that you would like to add the mix.  For example do you and Fiance like to travel?  If so, decide which ecosystem that serves you best, e.g. - Amex, Chase, etc., and then adjust your wallets accordingly.  


For score optimization he doesn't need any more cards. The longer he goes without applying for anything new....

 

-the older his oldest account gets

-the longer his average age of accounts gets

-the older his newest account gets and

-whatever inquiries there are disappear

 

All magic for his FICO scores.

 

 


Total revolving limits 741200 (620700 reporting) FICO 8: EQ 701 TU 704 EX 685

Message 12 of 19
driftless
Valued Contributor

Re: Strategy for Maximizing Credit Score


@SouthJamaica wrote:

@driftless wrote:

I would not add cards just to add cards.  Once your cards age and you add a mortgage you should be fine.  I would look instead at the cards that you have and see if there is a type of card that you would like to add the mix.  For example do you and Fiance like to travel?  If so, decide which ecosystem that serves you best, e.g. - Amex, Chase, etc., and then adjust your wallets accordingly.  


For score optimization he doesn't need any more cards. The longer he goes without applying for anything new....

 

-the older his oldest account gets

-the longer his average age of accounts gets

-the older his newest account gets and

-whatever inquiries there are disappear

 

All magic for his FICO scores.

 

 


Agreed, my comment address his card mix unrelated to scores.

 

CSR | Amex Platinum | EDP | QS (2)
Amex Blue Business Plus
Message 13 of 19
Anonymous
Not applicable

Re: Strategy for Maximizing Credit Score

A useful thing at this point may be to circle back with our OP and ask how important it really is to get as close to 850 as possible.

 

Basically, why does he want that?

 

If he wants it for a trophy reason, that's totally ok.  Then we can ask him what his timeline is for getting the 850 and give him the best plan.

 

If on the other hand he wants an 850 because he thinks that will give him a little bit of an edge with lenders (compared to him having a 790 say) then that's the misconception we need to clear up.  Once he realizes that he won't get any advantage, he may have a more relaxed goal, e.g...

 

      I want my score to go up (with occasional small dips) till it gets to the 820s.  I have five years to accomplish this.

 

Getting the perfect 850 is fine, but it precludes other things.  Like opening new cards to take advantage of huge signup bonuses, etc.  Or the increased stability Jamie alludes to.  Etc.

Message 14 of 19
driftless
Valued Contributor

Re: Strategy for Maximizing Credit Score

I have often wondered what the upper score range is that supports changing your card mix every year or so adding a mortgage, etc., on a regular basis.   I know that there are a lot of factors that go into it but 820 is my guess.  

CSR | Amex Platinum | EDP | QS (2)
Amex Blue Business Plus
Message 15 of 19
SouthJamaica
Mega Contributor

Re: Strategy for Maximizing Credit Score


@Anonymous wrote:

A useful thing at this point may be to circle back with our OP and ask how important it really is to get as close to 850 as possible.

 

Basically, why does he want that?

 

If he wants it for a trophy reason, that's totally ok.  Then we can ask him what his timeline is for getting the 850 and give him the best plan.

 

If on the other hand he wants an 850 because he thinks that will give him a little bit of an edge with lenders (compared to him having a 790 say) then that's the misconception we need to clear up.  Once he realizes that he won't get any advantage, he may have a more relaxed goal, e.g...

 

      I want my score to go up (with occasional small dips) till it gets to the 820s.  I have five years to accomplish this.

 

Getting the perfect 850 is fine, but it precludes other things.  Like opening new cards to take advantage of huge signup bonuses, etc.  Or the increased stability Jamie alludes to.  Etc.


Yeah but some people have all the credit cards they need or want, and would rather just maximize their scores.

 

In any event, the thread is named "Strategy for Maximizing Credit Score" Smiley Happy

 

 

 

 

 

 


Total revolving limits 741200 (620700 reporting) FICO 8: EQ 701 TU 704 EX 685

Message 16 of 19
Anonymous
Not applicable

Re: Strategy for Maximizing Credit Score


@SouthJamaica wrote:

@Anonymous wrote:

A useful thing at this point may be to circle back with our OP and ask how important it really is to get as close to 850 as possible.

 

Basically, why does he want that?

 

If he wants it for a trophy reason, that's totally ok.  Then we can ask him what his timeline is for getting the 850 and give him the best plan.

 

If on the other hand he wants an 850 because he thinks that will give him a little bit of an edge with lenders (compared to him having a 790 say) then that's the misconception we need to clear up.  Once he realizes that he won't get any advantage, he may have a more relaxed goal, e.g...

 

      I want my score to go up (with occasional small dips) till it gets to the 820s.  I have five years to accomplish this.

 

Getting the perfect 850 is fine, but it precludes other things.  Like opening new cards to take advantage of huge signup bonuses, etc.  Or the increased stability Jamie alludes to.  Etc.


Yeah but some people have all the credit cards they need or want, and would rather just maximize their scores.

 

In any event, the thread is named "Strategy for Maximizing Credit Score" Smiley Happy

 


It's often helpful to ask a person why they want a thing.  The reason is that that they may be under the impression that they need to achieve X because of Y.  Then, when you help them them understand that Y isn't actually the case, they no longer feel like X is important.

 

As I mentioned, he may simply want an 850 because he wants a trophy.  Which I pointed out was fine.  But it would be a shame if he pursued a multi-year credit strategy based on a mistaken assumption (e.g. that an 850 will get me an advantage with a lender over a 790, say). 

Message 17 of 19
Anonymous
Not applicable

Re: Strategy for Maximizing Credit Score

Hey guys - OP here

 

Thanks for all of your input! 

 

As for the questions regarding my goal - I don't "need" an 850 score, and I am aware that any score above a certain threshold will get you the best rates (780 or so).  What I am interested in doing is maximizing my score for the long-term, so that when I do take out a mortgage or buy a car (or whatever I may need to do 5 years down the road), my current credit mix is good enough to still support the hit and keep me in super-prime teritory (in case multiple "life" events happen). 

 

That said, getting specifically an 850 score for trophy reasons is attractive as well, just as long as I don't sacrafice my main goal. Smiley Happy

Message 18 of 19
Anonymous
Not applicable

Re: Strategy for Maximizing Credit Score


@Anonymous wrote:

Hey guys - OP here

 

Thanks for all of your input! 

 

As for the questions regarding my goal - I don't "need" an 850 score, and I am aware that any score above a certain threshold will get you the best rates (780 or so).  What I am interested in doing is maximizing my score for the long-term, so that when I do take out a mortgage or buy a car (or whatever I may need to do 5 years down the road), my current credit mix is good enough to still support the hit and keep me in super-prime teritory (in case multiple "life" events happen). 

 

That said, getting specifically an 850 score for trophy reasons is attractive as well, just as long as I don't sacrafice my main goal. Smiley Happy


Hello Seagraham.!  The reason you are getting some mixed messages is the word "maximizing."  If you mean that you want to know the single best strategy for you to have the absolute maximum score possible in five years, then go with (A).  If you are fine with having a score that is a few points less, but still well over 810, then (B) is also fine.

 

In your initial post you seemed aware of some of the advantages (B) might have:

 

       * You'll have a higher total credit limit (therefore easier to spend a lot and still have a utilization < 9%)

 

       * You'll have more tradelines total, and therefore in the years to come when you to add a new tradeline your AAoA will take a smaller hit.

 

       * It will enable you to take advantage over the next six months of any especially lucrative signup bonuses for credit cards (option A precludes that)

 

You also seem aware that some of the disadvantages traditionally associated with (B) do not apply to you, e.g. inquiries, your Age of Youngest account becoming low, etc.  These are drawbacks only when a person might need to apply for credit in the next 1-2 years.  That's not true for you.

 

So what you'll need to do is to weigh your desire to have a score that is at its very highest it can be, over and against your desire for the other advantages you are aware you might get from getting a few more cards in the next six months (but having a score of 810 instead of 820.)

Message 19 of 19
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