CCCs and FICO Scoring

[bichonmom]

I had read previously that all Visa/MC don't score equally, and that CCs from major banks score higher than CCs from CUs. I wanted to be sure that this was accurate (or that I understand it correctly), and also to find out if that goes for the "bigger" CUs I've read about here (e.g. Navy Fed, Pen Fed).

Also, if I just keep my Cap One step card (even though the limit may never go very high), would that be sufficient for the *bank* CC for FICO scoring? Or would that end up doing more harm than good because it's a low-limit card.

I guess I'm wondering if I would be fine w/the 2 CU and Cap One low-limit cards, or if I should try for a major bank CC at some point.

Thanks!

[MarineVietVet]

---

@bichonmom wrote:

I had read previously that all Visa/MC don't score equally, and that CCs from major banks score higher than CCs from CUs. I wanted to be sure that this was accurate (or that I understand it correctly), and also to find out if that goes for the "bigger" CUs I've read about here (e.g. Navy Fed, Pen Fed).

Also, if I just keep my Cap One step card (even though the limit may never go very high), would that be sufficient for the *bank* CC for FICO scoring? Or would that end up doing more harm than good because it's a low-limit card.

I guess I'm wondering if I would be fine w/the 2 CU and Cap One low-limit cards, or if I should try for a major bank CC at some point.

Thanks!

---

Credit cards from credit unions count the same as bankcards from big banks. This wasn't always true, but with the newer models there's no difference. Specifically, this is true for the EQ (BEACON 5.0) and TU (04) scores most used by lenders

Edited to correct yet another typo. 

From a BK years ago to:
EX - 3/11 pulled by lender- 835, EQ - 2/11-816, TU - 2/11-782

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

[bichonmom]

Thank you! That's good to know. The CUs seem to be more open to working w/rebuilders, so I won't sweat getting a major bank card.

[Anonymous]

Right!  And remember that Cap One is a "major" bank card.  (CL's are a non-issue.)

Congrats on your good work in rebuilding!

And btw news stories today (It's National Dump Your Bank day, or some such) indicate that CU's are seeing significant new accounts from folks who feel their needs may be met as well or better with CU's.

[bichonmom]

---

@Anonymous wrote:

Right!  And remember that Cap One is a "major" bank card.  (CL's are a non-issue.)

Congrats on your good work in rebuilding!

And btw news stories today (It's National Dump Your Bank day, or some such) indicate that CU's are seeing significant new accounts from folks who feel their needs may be met as well or better with CU's.

---

I'm glad to know that CLs aren't an issue; I'm just not crazy about Cap One because from what I've read here, it's unlikely that the card will ever go beyond a $500 (or possibly $750?) limit.

I think CUs are going to become more popular with all of these outrageous fees the banks are charging now. I had a dormant ckg acct w/Wells Fargo that I was keeping open -- just for longevity and in case I needed to use it in the future. I closed it last month because they were going to begin charging a monthly fee. And I don't miss it at all.

[RobertEG]

FICO does not score actual CL, but rather your % util of the CL.  So, from a util scoring perspective, $100 on a $500 CL card is the same as a $1000 balance on a $5000 CL card.

The main problem with low CL cards is that it is very easy, with relatively low purchases, to quickly drive up their % util, so they are a bit more troublesome to monitor.

Since FICO scores the % util on individual cards as well as overall % util, carrying a high % util on one of those Crap1's can temporarily ding your score.

But again, more good news.  Since % util is one of the very few scoring categories that has no historical memory from month to month, prior month damage can easily be corrrected the next month.  Thus, fine-tweaking each month is really not necessary until such time as you actually need your score to shop for new credit.

Keeping  util low is still important, as you dont want a history of extended high % util that may cause a creditor to close your card, particularly if it is one of your higher CL cards.

[MarineVietVet]

I need to add a bit more about this. I originally wrote:

Credit cards from credit unions count the same as bankcards from big banks.  This wasn't always true, but with the newer models there's no difference.  Specifically, this is true for the EQ (BEACON 5.0) and TU (04) scores most used by lenders. 

I should have added that it's unsure whether EX treats them any differently but it's believed (though I'm not positive) that EX does in fact look at them in a different light than EQ and TU. I apologize for the omission.

From a BK years ago to:
EX - 3/11 pulled by lender- 835, EQ - 2/11-816, TU - 2/11-782

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

[bichonmom]

Robert, Thank you for the additional information.

MarineVet, Thank you for the updated info.