Do charge cards help your score?

[bigblue7722]

I only have one card that comes up as charge card (fingerhut) on my credit report. I want to close fingerhut cause I really dont think I need it anymore but sense it is listed a charge card I dont want to lose any points if i close it. Any thoughts?

[Anonymous]

One basic issue with charge cards is whether a limit is reported, and factored into utilization.

It looks like your Fingerhut card is 20% of your total CLs, and removing this 20% would cause your overall utilization to increase by 1.25 (125% of 80% is 100%).  If you PIF, this is not necessarily an issue.

As far as charge cards intrinsicially helping you, I don't know what the gain would be.  You might look at these articles:

http://www.myfico.com/crediteducation/questions/charge_cards.aspx

http://www.bankrate.com/finance/credit-cards/how-charge-cards-affect-credit.aspx

[bigblue7722]

hmm so it doesnt really help your score having a charge card it can only hurt it if you dont pay on time. 

[Lechte]

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@bigblue7722 wrote:

hmm so it doesnt really help your score having a charge card it can only hurt it if you dont pay on time. 

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Yes a charge card can help your score...if you pay on time and keep your utilization low.   A lot has to do with what is already on your credit file too.

[myjourney]

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@Lechte wrote:

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@bigblue7722 wrote:

hmm so it doesnt really help your score having a charge card it can only hurt it if you dont pay on time. 

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Yes a charge card can help your score...if you pay on time and keep your utilization low.   A lot has to do with what is already on your credit file too.

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That depends on the Fico model being used

UTL is excluded from some AKA hidden TL and included in others 

[Lechte]

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@myjourney wrote:

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@Lechte wrote:

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@bigblue7722 wrote:

hmm so it doesnt really help your score having a charge card it can only hurt it if you dont pay on time. 

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Yes a charge card can help your score...if you pay on time and keep your utilization low.   A lot has to do with what is already on your credit file too.

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That depends on the Fico model being used

UTL is excluded from some AKA hidden TL and included in others 

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Are you talkin about store charge cards or cards with no preset limit?

[Revelate]

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@Lechte wrote:

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@myjourney wrote:

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@Lechte wrote:

---

@bigblue7722 wrote:

hmm so it doesnt really help your score having a charge card it can only hurt it if you dont pay on time. 

---

Yes a charge card can help your score...if you pay on time and keep your utilization low.   A lot has to do with what is already on your credit file too.

---

That depends on the Fico model being used

UTL is excluded from some AKA hidden TL and included in others 

---

Are you talkin about store charge cards or cards with no preset limit?

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Specifically revolving tradelines with a term of 1 month.  I don't know much (well anything) about store charge cards as I tend to avoid store cards in favor of national bank cards; however, under FICO '04 and '08 models, a tradeline with a term of 1 month (vis a vis, an Amex charge card) is discounted from the revolving utilization calculation.  That is not the case with FICO '98 where it is counted just like a regular credit card without a limit: namely, your balance vs your high balance, is your utilization on the card.

It is still factored into the "number of tradelines reporting a balance" calculation.

I don't think that a charge card counts differently than any other revolver when it comes to mix of credit.

Beyond that it helps or hurts your credit the same way any other tradeline does regarding payment history.

[myjourney]

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@Revelate wrote:

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@Lechte wrote:

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@myjourney wrote:

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@Lechte wrote:

---

@bigblue7722 wrote:

hmm so it doesnt really help your score having a charge card it can only hurt it if you dont pay on time. 

---

Yes a charge card can help your score...if you pay on time and keep your utilization low.   A lot has to do with what is already on your credit file too.

---

That depends on the Fico model being used

UTL is excluded from some AKA hidden TL and included in others 

---

Are you talkin about store charge cards or cards with no preset limit?

---

Specifically revolving tradelines with a term of 1 month.  I don't know much (well anything) about store charge cards as I tend to avoid store cards in favor of national bank cards; however, under FICO '04 and '08 models, a tradeline with a term of 1 month (vis a vis, an Amex charge card) is discounted from the revolving utilization calculation.  That is not the case with FICO '98 where it is counted just like a regular credit card without a limit: namely, your balance vs your high balance, is your utilization on the card.

It is still factored into the "number of tradelines reporting a balance" calculation.

I don't think that a charge card counts differently than any other revolver when it comes to mix of credit.

Beyond that it helps or hurts your credit the same way any other tradeline does regarding payment history.

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+1