Do Retail Cards Count More or Less Than Credit Cards?

[MsMoneypeso]

We're trying to swiftly pay off all revolving accounts. But when computing F8 or mortgage, would paying off retail cards help increase the score quicker or not than paying off credit cards?

[FireMedic1]

Paying off all debt as a whole will be beneficial. They are all figured into your individual and overall revolving credit utilization %'s. Lower the %'s go. The points go up.

[SouthJamaica]

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@MsMoneypeso wrote:

We're trying to swiftly pay off all revolving accounts. But when computing F8 or mortgage, would paying off retail cards help increase the score quicker or not than paying off credit cards?

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No difference in either scoring model.

The most important things you can do to target your mortgage scores are:

1. make no applications of any kind that could result in a hard pull

2. on your revolving accounts maintain as many zero balances as possible, ideally letting one bank card report a small balance while the others report zero balance and

3. reduce the number of high utilization accounts (e.g. if you have a card with > 50% utilization get it under 50%, if you have a card with > 30% utilization get it under 30%, etc)

[4sallypat]

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@MsMoneypeso wrote:

We're trying to swiftly pay off all revolving accounts. But when computing F8 or mortgage, would paying off retail cards help increase the score quicker or not than paying off credit cards?

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I believe that mortgage scoring can be changed dramatically depending on which account is paid / balance reduced.

Case in point:

My mortgage broker who patiently worked with us (over a year) when we were in the  mid 600s got us to gradually pay down certain accounts like: Barclays, Chase, Citibank - which jumped our scores way up.  Didn't touch the retail card accounts at that time. 

Then he had us work on reducing overall utilization (from 35% to 6%) and scores climbed.

We then paid down some store retail cards (Synchrony & Comenity) which moved our 5,4,2 scores up.

Finally, he had us pay off: AMEX Plat POT and 2 personal installment loans on our closing escrow instructions to satisfy the UW.

As a result, our scores are now in the mid 700s which really helped with lower interest rate, lower PMI, and better UW outcome.

We are closing on our house in a couple of days so it's worth working with a hard to find, patient mortgage broker who will guide you thru the home buying process...

[HeavenOhio]

@MsMoneypeso, as far as utilization goes, there should be no difference in the way FICO scores handle retail cards vs. major cards.

However, some of us have found that a retail card can behave unpredictably when used as one's AZEO card, i.e. the card used to leave a tiny positive balance while the rest of one's cards show a balance of zero.

If you're able to achieve AZEO, make sure that tiny balance is left on a major card.