Comenity Cards

[Anonymous]

Hello all. Long time reader of Fico Forums, new member.

So, I declared BK in 2016. I have been rebuilding ever since, with very low credit utilization (currently 3%), and 100% on-time payments. I pay my bills immediately, as suggested in another FF thread. My question is what to do with my Comenity Bank cards. Admittedly, I am an impatient person and once I get a goal in mind, I go for it.

In my quest to build my score back up, I signed up, and was approved for the following Comenity cards:

Eddie Bauer - $890

Pottery Barn - $750

West Elm - $750

Williams Sonoma - $1500

I actually use the Eddie Bauer and West Elm cards semi-frequently. I use the Pottery Barn card once and a great while and hardly ever use the WS card, like, I've used it twice in the year or so that I've had it. I also have a Capital One Quicksilver card, a Discover It card, a Visa rewards card through my credit union (I also have an auto loan through them), and a Barclay's Apple card as my wife and I use Apple products and while I don't rely on it, it comes in handy.

In my strategy to continue building my score, should I close any of the Comenity Bank cards? Maybe the Williams Sonoma? Is it  hurting me or helping my score to have them open? My score's are currently between 694 and 700 depending on the bureau. Any advice on strategy would be greatly appreciated. Thanks!

[Remedios]

Hi and welcome 

If you are certain you will never use them, go ahead and close. Having them is not hurting your score (LN has some hangups with store card and auto insurance, but that's whole another topic). A good store card you actually use is as valuable as any other non store card. 

Seeing how you're on the fence, I'd wait a bit longer. If you still feel like closing, do it. The only negative impact closing card can have is on utilization, but you already stated that's not a concern. 

[Anonymous]

Thanks. Appreciate the advice.

[DIYcredit]

I agree that's it's a personal choice depending on your spending habits.If you don't really use them then cancel them.I am not a big fan of store cc's because the stores will typically offer a whopping 10% off or something like that and that's how they get you.I see that you have other cc's that will be more beneficial like the co quicksilver which offers 1.5% cash back.If you cancel the other store cc's, charge anything to your qs watch your credit limit,You can pay it down to 1-6%before the statement closing date be sure to show a small balance on all of  your cc"s and then pay on time monthly to all of your credit accounts,you want to show activity.If their is no balance from cc's reported to your cr then their is no activity to your Fico score.GOOD LUCK..

[Anonymous]

You know, I never considered carrying small balances to show activity. So, if there are no charges made on an account any given month, the company won't report anything to the bureau's? I just assumed showing zero balances was enough to make scores improve? Good to know! So, the strategy is to charge a low amount, to say the CO Quicksilver, and then pay it off before I get the bill or shortly thereafter? Thanks for the help!

[Anonymous]

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@Anonymous wrote:

You know, I never considered carrying small balances to show activity. So, if there are no charges made on an account any given month, the company won't report anything to the bureau's? I just assumed showing zero balances was enough to make scores improve? Good to know! So, the strategy is to charge a low amount, to say the CO Quicksilver, and then pay it off before I get the bill or shortly thereafter? Thanks for the help!

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Having 0 revolving utilization reporting results in a scoring drop because you are not actively using your credit.  The accepted ideal strategy is to only have 1 card report a balance that is below 9% of your credit line.  To make it simple, if your credit line was $100 then you should not let $9 or more report.  

If you pay your total amount owed before your statement cut date, that will result in a 0 balance reported to the bureaus.  Let them send you a bill.  Your statement balance on this bill is what will be reported to the credit bureaus.  That is also the amount you must pay to avoid interest.  Pay that before your next due date.  

By doing that, you won't pay a penny of interest and you'll eliminate a score drop for having 0% UTI reporting.  This seems to be around a 15 point drop on the FICO 8 models on average.  It is as simple as putting Netflix on autopay with a credit card.

A common question on these forums is people are wondering why their score drops when they pay off their credit cards.  It is because of the all zero penalty. 

[Anonymous]

Great advice, @Overmedicated. This totally makes sense now. And the trick of doing something like putting Netflix, etc. on it sounds like a good idea. Thanks!