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@Anonymous wrote:Your Citi update will be using FICO 8 Bankcard Enhanced, right E2W?
CGID, that is correct.
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Can I just jump in real quick here...I'm still on the fence if the SSL is right for me and I really dont want to go through the effort if it is not going to be beneficial. My report says I have 37 total accounts....28 of those are credit card....0 are real estate...6 are auto....0 are student....3 are other.... Every Account is closed with 0 balance except for 3 CC that are open and reporting a 8%utilization as I have one card with a small balance reporting....payment history is at 100%...1 derogatory mark which is my BK7...total account says excellent...my oldest account was opened in Jul 27, 2004 but Karma of course says my history is crap because they don't factor in the closed accounts..... This information is pretty consistent across all 3 agencies.... so would this SSL be of any help to me at alll? Im thinking no but wanted to double check what you guys thought???? Thanks so much!!
In the past couple weeks or so, I've gotten unusual offers from my creditors--never anything like this before. They made no sense to me but now I think I understand. LMAO!
First, Amex sent me an offer to reduce my APR from whatever it is--around 11-12% I think to 6.99% for a year I've had this card for over 30 years, have never carried a balance. Why now? Then, Chase sent me checks in the mail (going to call them and STOP IT) to use as I like, also a low APR. Then, to top it off, I got a letter in the mail from the bank where I have a LOC. They wanted to tell me that they have "approved" me for an increase in my LOC! Never mind that I have never used it! No hard pull either.
Ok, this is my take on what happened. In their routine review of my CR, these guys have seen that I suddenly have a secured loan!!! It's the first time they've ever seen a loan on my account. It's as though they are saying, Whitebird, we had no idea that you needed a loan--why didn't you say so!!! We'll be happy to accommodate you. No need to go elsewhere! I'm still chuckling over this...
It will be a big help to you. The reason is because you have no open installment loans.
There is an impoortant factor that we have been calling installment utilization. It's discussed in the second post of this thread (the "theory" section) -- read this section carefully if you haven't yet done so. This factor is located in the "Amounts Owed" group of FICO factors, and this group has a big weight. Because right now you have no open installment loans, you are getting zero points from this factor. (Analogously, if you had no open credit cards, you'd be unable to get any FICO points for having a low CC utilization.)
When you use the SSL technique you end up getting all or almost all the points you can from the IU factor. Going from zero points to all the points is a big improvement.
The only tweak to this advice would be if your sole reason for wanting a score improvement is in prep for a mortgage. Two of the three mortgage scores (EQ and TU) don't benefit from the technique. But the EX mortgage score still does, so personally I think it makes sense even if all you care about is mortgage scores.
I need advice for my circumstances. I had already thought about getting a secured loan to pay off the last $1,000 of my devil card SYNC, which would also add another type of account (I have 2 loans on record, but they are closed satisfactory.)
My problem is my activity....I have been credit poor since 2009. Had 5 baddies and a 630 score. Ive been fixing things and now I am down to 2 baddies (1 will be off the end of Sept and the other Nov)...scores went up to 695 in August. We desperately needed to get another car, which we did. I did have an auto loan usage of about 50%...adding the new one, plus the 2 yr old auto, takes it up to over 80%. I also added 2 new credit cards...BCE and CSP.. These have not hit yet, the car did and the extra HP's (now 9). So my score the first of Sept went down to 665. Just this past 9/17, all my scores went back up to 695 except EQ. Not sure what hit, other than my paying down UTIL form 17 to 12%. I now have 2 car loans, 1 - 5 yr old cc, 2 - 1 yr old cc's and the 2 new ones (not on my cr yet). I have no mortgage, no loans, and no other.
So I am very concerned about my AAoA and HP's. Im not sure how much the CB's are going to like when the 3 new accounts hit (The car was a trade with a 2 yr old acct, then the 2 new cc'c) adding a 4th to the mix may hurt more than help? I am looking to do a secured and make sure they do a SP or I wont do it. Also my UTIL will be less than 10% next report.
Also, I found this thread this morning, so another question iis, since my installment (cars) value is around $27,000 at 80%, would I still need to pay the installment back down to >9%? Doesnt seem like it would matter?
Any Advice would be most appreciative. I knew when I added the car and 2 cc's my scores might dip down. But with my derogs gone by Nov, I have 6 years perfect payments, 3 types of loans, should really give my credit a solid fondation to grow from. We are looking to buy a house 2017.
Thanks in advance
You have two open auto loans. Auto loans are a sub-class of the much bigger class of "installment loans." Other examples of installment loans are student loans, home loans, personal loans, etc.
The SSL Technique is designed for people who have no open installment loans. As per the first post in this thread:
Who will not benefit from this technique?
* People who already have an open installment loan.
The second post gives the theory for why that would be the case. In short, when you already have an existing open loan, adding an SS loan does not help you lower your total installment utilization.
If it looks like both car loans will be paid off before you buy your house in 2017, then using the SSL Technique makes sense, though again it will only help you when the other loans get paid off. Personally I would try to avoid paying the cars off in the run-up to the home purchase -- though if you chose to pay the amounts owed down that would be ok.
Feel free to get general guidance on how to improve your scores by posting in the General forus or the Mortgage prep forum. To advise you best, they will need to know the total number of open credit cards you have. I suspect you have at least four (counting your new CCs) -- if so, you are set as far as CC's and do not need to add more.
The guidance you will get will boil down to:
* Let your derogs fall off. (Big help there.)
* Do not open any more accounts and do not do anything to trigger more inquiries.
* Pay all your cards down to $0 and then continue to use one card for modest purchases (keeping your total utilization above 0% but otherwise small, e.g. < 5%)
* Allow all your existing accounts to age, but also learn how to accurately and precisely compute your AAoA (as well as your age of oldest account, which is different). You may well get a benefit when those numbers cross an "interger" mark. For example, if your AAoA crosses from 1.9 to 2.1. Do not use Credit Karma for evaluating anything related to account age.
* Obtain some free tools for pulling your credit reports frequently. Credit Karma is good for that. Experian also offers a free tool now. You need to be able to become very familiar with your reports on a monthly basis, especially as your derogs get ready to fall off. When all your derogs fall off and your CC balances are changed (as per advice above) then it would be time to see what your mortgage scores are, which you can do via myFICO. No point in doing that before, in my opinion.
Thanks CGD, I guess I am just confused about the different types of accounts. I thought it was 1. Revolving, 2. Auto, 3. Mortgage, 4. Installment, and 5. Student.
I have seen on my CR's where it says I dont have a good enough mix of accounts, so that was what i was trying to address.
Thanks for the clarification! I just going to garden until next year!
There are two big kinds of accounts: revolving and installment.
Within revolving there are subdvisions further: credit cards vs. charge cards, for example.
Within installment loans there are also subdivisions:
* Student loans
* Auto Loans
* Mortgages
* Personal Loans
etc.
Within the "Credit Mix" category you get scoring points for having show you can successfully manage both Revolving and Installment accounts. It is quite possible you get a much smaller amount of points also for demonstrating a broad range of subtypes. For example it is possible that you get some points for having shown you can manage a mortgage. And specialized flavors of FICO likely heavily weigh certain sub-types (e.g. the Auto Enhanced flavor likely looks hard at whether you have ever managed an auto loan before).
But (as you will remember from the Theory Behind the Technique section of this thread) the bigger boost you get from this SSL Technique is not in the Credit Mix Category, which is comparatively small part of the FICO score, but rather the Amounts Owed category -- which contains the factor we have been calling installment utilization.
Your installment util was already being dominated by your auto loans. Adding a small personal loan wouldn't change that.
THAT clears it up! Perfect answer. That is also why I couldn'y figure out why they were paying it down to 9%? I didn't think the CB's looked at the util of the loans that much, rather just the payments affecting your DTI.
I bought the car in August when my current loan util was 50% and it went up to over 80%, my scores dropped from 695 to 665.
But then when my revolving dropped from 17% to 12% ( and a collection may have dropped off on TU, cant tell exactly right now unless I pull a full report)...and they are back up to TU 699 +32, EX 680 +5, and EQ662 +0.
Thanks again for helping!
I applied for the loan on Aug 4, loan was approved and active in my online banking on Aug 16. 5 years, $500