Did One Card Mess Up My Score?

[Anonymous]

What you have is an AU (Authorized User) account under your wife's name unless you're a joint applicant when it was opened.  This effectively gives you all of the point gain w/o the liability of the amount due.  If she defaults... your score goes down but, you can simply have yourself removed from the account and your score goes back up.

However,  if that were to happen and you don't have your own set of accounts.... you're stuck with your installment loans which provide some scoring but, to get another card w/o ANY cards reporting if you lose the AU card above... you would probably end up starting from scratch with a secured card and a low limit as if you were transported back in time to the age of 18 again w/ no credit established.

When your leases change from one to another the accounts get closed out and opened and this would impact your score.

[Anonymous]

OK, thank you for the response.

So it seems like recommendations are going towards me getting my own credit card account, since all I appear to have is:

 - three installment accounts

 - one AU account

Yet, I still managed an 800+ for many years.  I'm concerned opening a new CC will (at least temporarily) drop my score.  Hmm?  Still not sure what dropped it to 770 to begin with.  As you folks previously mentioned, maybe a closed CC account dropped off.

Also, when I get one of my annual reports from annualcreditreport.com, they report doesn't show a FICO score.  Yet, many members here display their scores.  Am I to assume these people have paid subscriptions to constantly see thier FICO score?

Thank you.

[Anonymous]

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@Anonymous wrote:

Also, when I get one of my annual reports from annualcreditreport.com, they report doesn't show a FICO score.  Yet, many members here display their scores.  Am I to assume these people have paid subscriptions to constantly see thier FICO score?

Thank you.

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Most of us have several accounts with a variety of lenders that provide free FICO scores monthly.  Amex provides you with Experian, Discover provides TU, and Citi provides EQ.

Your score will dip a bit or actually go up with the approvals.  It depends on the buckets and thresholds you encounter in scoring.  Ideally you want 3 cards that are "active" to build a solid score.  Seeing as you are ahead of the game in the scoring department they don't need to be that active but, maybe use them every 3 months to generate some points in the long run.  

What I do with idle cards is just throw a recurring bill on them and setup autopay for the statement balance as to not miss a payment or leave a large balance hanging somewhere with a high APR attached to the account. I've done this with a couple of accounts now and managed to grow them to CL's over 50K just by generating monthly activity and being persistent with hitting the CLI request option with each of them on the specified time table which varies by lender.

It all kind of depends on where you want your credit to be and the flexibility you want when using a card for a purpose.  I like to have high limits so I don't have to watch the balance as closely to keep my scores above 800 at any given time.  Some go more for the allowance type of spending with lower limits and weekly pays to make their card function more like a debit but, with the CC protections.

[Anonymous]

Thank you for the lengthy advice.  I appreciate your explanation and the hint into your tactics.

OK, I will look into this new CC.  I thought having idle cards sitting around, while having a high CL of potential spending was a detriment rather than a help. I figured lenders thought, "Careful, this guy could possibly go run his cards to the limit and be on the hook for $50k+...we better not lend him much for this new account then."  Clearly I had it backwards.

BTW, this whole business of looking after your credit can get addicting, can't it?  Each time I sit down to research the topic, hours go buy and my brain starts racing!

[Anonymous]

There are algorithms in place to stop the run up and leave them hanging sort of thing.  It's technically called "bust out" and there's a score associated with it that you can't get unless you're the lender.

Spending time on learning about credit can be addicting at first but, once you get it down it's just something to keep up with every once in awhile to see what's new.

I would just take it slow for now and find a card that meets your needs and potentially has a bonu$ attached to it to make it worthwhile.  Typical bonuses for prime cards avg $300+ just for spending what you would normally spend in a 3 month period.  There are some lower bonuses though around $150/$200 that can be easily met with a $500 spend as well.

https://frequentmiler.boardingarea.com/best-credit-card-sign-up-offers/

[VanderSnoot]

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@Anonymous wrote:

BTW, this whole business of looking after your credit can get addicting, can't it?  Each time I sit down to research the topic, hours go buy and my brain starts racing!

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Lol, yep! It pays off, though, since so much of it is counterintuitive (as you're discovering).

[SouthJamaica]

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@Anonymous wrote:

Thanks again for the reply.  Here are my accounts as you requested:

1. Credit Card (Citibank Advantage, has existed about 15 years):

Acct in my wife's name, but I also hold a card

$700 current balance, always paid monthly in full.  Limit $35k

2. Amex Business Card:

This is the newest acct, sometimes has $50k-$100k charged to it, but paid immediately

~$3000 current balance, always paid monthly in full by employer

3.  Car Lease Payment (has existed about 6 years):

I think about $1000/month, paid by company, but lease in my name

This lease is when the creditor showed I had an 812 FICO

4.  HELOC (has existed about 10 years):

balance is $100k (and has been for about 10 years)

5.  Car Loan Payment (has existed about 4 years):

balance is about $4,500,  ~$220/month

---------------------------------------

That totals what I have.  As previously noted, all the above existed for at least a half dozen years while I enjoyed the 800+ FICO rating.  The only thing that changed was that Amex card, and then my bank displays to me I have a 770 FICO, starting right after I got that Amex card.

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Amex business cards do not report to your personal credit, so if it's a business card it wouldn't be affecting your credit score at all.

[Anonymous]

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@Anonymous wrote:

I thought having idle cards sitting around, while having a high CL of potential spending was a detriment rather than a help. I figured lenders thought, "Careful, this guy could possibly go run his cards to the limit and be on the hook for $50k+...we better not lend him much for this new account then."  Clearly I had it backwards.

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NW Person,

In your first post you referenced the 812 score provided to you at the time you scooped up one of your auto loans.  You did not reference the scoring model / bureau data used to generate that score.  Do you know what it is?  If not, you may be able to look back on your paperwork from the deal and find it on there.  The chances of it being the same TU Fico 8 score that you receive from your bank monthly is extremely small.

Regarding the section I have quoted above, the answer really is that "it depends" not that you have it backwards.  For someone with a weak credit profile with (say) low 600's scores you could very well be correct regarding how a potential lender may see them with high limit cards sitting around, because they're an increased risk individual.  That doesn't match you, though.  Someone with a strong credit profile and (say) 770+ scores that has high limit cards sitting around is showing restraint and the ability to manage that credit; they're a low risk individual so banks care far less about it.  One place you went wrong was not using your own CC years ago, causing it to get closed for non use.  It's generally recommended on this forum to swipe a CC at least once every 6 months and as often as once ever 3-4 months for certain lenders (WF is one of them) in order to ensure that it doesn't get closed down for limited/non-use.

As for why your TU Fico 8 score that you have been monitoring monthly dropped, my best guess would be due to changing age of accounts factors and/or the reported balance changes on the AU card.  Any time you open a new account your AAoA will drop and your AoYA will be reset to 0 months, in addition to any inquiries made for that new account.  On many profiles, an AoYA reset from a number > 12 months to 0 months alone results in a 15-20 point score drop.  To put it simply, if you haven't opened an account within the last year and you do so, you can expect your score to drop at least 15-20 points.  When you turned your 1 lease in and got a new lease for example, that created a new account and would have reset your AoYA to 0 months and dropped your AAoA as well.  

Is your closed CC from non-use still on your CR?  I know you said it was closed in 2012 and typically they stick around on your report for 10 years after closure.  Is that your oldest account on your CR?  If so, at ~30 years AoOA, you're maxed out for scoring purposes relative to that factor if it has remained constant during this time period that you've been questioning why your score has changed.  I'm just trying to rule that out as a variable.

[Anonymous]

I forgot to add my recommendation for you, OP.

I'd suggest grabbing one CC in your name.  Just one.  You'll see a lot of people on this forum recommend 3+ to you and considering your situation/profile, it's absolutely unnecessary.  You're clearly fine with using the 1 AU card with your wife all the time, as evidenced by your other personal card getting closed for non-use.  Your credit scores in the 770-800 range are more than adequate to allow you to obtain the best credit products out there at the best rates, but having a bit more cushion on them would be a good idea in the event that your score does need to drop for some reason (like several apps) in the future.

I like the idea from another member above to set up a recurring charge on the card and set up autopay to pay the statement balance in full monthly.  Then you can forget about the card, throw it in your sock drawer and go on with life as you have for years. 

As for your credit scores, if your current AoYA is < 12 months, you probably won't all too great of a score drop in adding a new CC.  If your AoYA is > 12 months, you'll see a greater drop from the new account reporting and the AoYA reset to 0 months.  100% of any lost points though will return in 12 months time.  Any drop you receive though may be diluted due to other factors being aided when the new account shows up... having a non-AU account, aggregate utilization will drop, number of [revolving] accounts with a balance can go from 100% to 50%, etc.  It's possible you'll see little to no score drop at all.  As for the scoring benefit, in 12 months time (if you open no new other accounts) when the new CC account reaches 12 months in age my guess is that your scores will always be over 800 and probably level out in the 810-820 range.

Do you know what your AAoA is currently?  If you're looking for a place that calculates it for you and provides you with a free Experian Fico 8 score, head to creditscore.com.  On their summary page where it shows your Fico score it will show your AAoA and AoOA.  That summary page only shows you your open accounts though, even though your AAoA is being calculated (correctly) using both your open and closed accounts.  If you know how many total accounts, both open and closed that you have on your CR, it's easy to determine what your AAoA drop would be from the addition of 1 new account. 

[firefox100]

What is AOYA ?