Does store card lower score?

[SouthJamaica]

Does having a store card actually lower your FICO score?

If so is there anything I can do to undo the fact that I recently got my first and only store card?

[Anonymous]

One probably isn't going to do it.  If you continue to pay on it and PIF it if possible, you can do alright.  It's the ones with 10 store cards or more that will have issues, not so much with scoring but with obtaining better accounts and getting better balances.  

[SouthJamaica]

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@Anonymous wrote:

One probably isn't going to do it.  If you continue to pay on it and PIF it if possible, you can do alright.  It's the ones with 10 store cards or more that will have issues, not so much with scoring but with obtaining better accounts and getting better balances.  

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Thanks Jon

[RobertEG]

While Fair Isaac has not provided details, they have stated that store cards are not given the same weighting in mix and util as are major bank cards.

It is not so much that they lower score, but rather one of whether they are permitting max scoring if you dont have major bank cards.

[Anonymous]

Hey SJ!  As I think you and I have talked about before, some induustries (like the makers of car insurance) might charge you a higher premium for hving one or more store cards and also for having an averaage CL that is < 10.5k.  But FICO itself doesn't lower your score for having them, as far as anbody knows (including the Auto Enhanced FICO).  The auto industry may very well count store cards (when determining premium) even if they are closed.  Thom Thumb knows more than anyone  else about that I think.  You can find yyour insurance score squirelled away on one of the tabs at Karma.

Your personal "mix" category is doing pretty good if I remember right.  Many accounts, and you have both open revolving  and open installment accounts.

Merry Christmaas, buddy!

[lg8302ch]

I would say if you have suffered a score drop then it is more likely due to the cut of the AAoA and this would happen exactly the same way with major CCs.  That is why any app should be evaluated carefully and if the account makes sense.  I doubt that if I had 1 store card instead of a major CC that my score would be any different with the same number of accounts and AAoA. Closing that store card will not bring your AAoA back up. So you just keep it and garden and your scores will come up with time again

[CreditDunce]

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@Anonymous wrote:

Hey SJ!  As I think you and I have talked about before, some induustries (like the makers of car insurance) might charge you a higher premium for hving one or more store cards and also for having an averaage CL that is < 10.5k.  But FICO itself doesn't lower your score for having them, as far as anbody knows (including the Auto Enhanced FICO).  The auto industry may very well count store cards (when determining premium) even if they are closed.  Thom Thumb knows more than anyone  else about that I think.  You can find yyour insurance score squirelled away on one of the tabs at Karma.

Your personal "mix" category is doing pretty good if I remember right.  Many accounts, and you have both open revolving  and open installment accounts.

Merry Christmaas, buddy!

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I don't want to derail this thread.   However, could you double check the average CL to max out LexusNexus.  Also, if you think retail card limits count against the average CL.  From my reading, they were not calculated for average CL. 

A while I scanned through the LexusNexus Insurance Codes (I am not sure if it was home, auto or both).  I came away with the following goals:

1) Average non-retail account CL $13,002 or greater.  I am counting my overdraft LOCs and Target Redcard (it shows up as a credit card on my CRA) since it is a worst case for me.

2) Keep % of closed accounts less than 25%

3) Boost % of Credit Union and Mortgage accounts to more than 33%.  (This is a weird category.  I am not sure how they came up with it)

4) Before applying for insurance, make sure all of my absolute balances are super low.  There were codes for your total credit card debt. 

5) Do not add any more retail cards. 

6) AAoA needs to be much higher than FICO to max out the category

I decided to ignore some codes.  For example, there were codes for having more than 5 open accounts.  There were also codes for having fewer than 10 accounts paid as agreed.  Or having more than 11 accounts paid as agreed.  (The sweet spot was 10-11 accounts paid as agreed).   There were other things too.

I apologize if you are referring to the TransUnion Insurance risk model.  I have been monitoring my score since you pointed out I can get it via CK.  However, I have not reviewed their codes.  When I asked for quotes, my current insurance company pulled through LexusNexus.

To make up for derailing the thread.  From what I have seen, only with FICO NextGen are store cards given less weight than normal credit cards. With NextGen, someone with only store cards will be at a disadvantage to someone with only normal credit cards.  However, having both store cards and normal cards boost your credit mix.  For example, after I added my Lowes card, Penfed said my score went up about 60 points.  My credit report was too busy in the months between Penfed pulling my credit for it to be a valid data point, but you get the idea.

Let me be clear, only NextGen uses store cards for credit mix.  With all other FICO models, store cards are not counted any differently.  Unless we are talking about PenFed or a very few other lenders, the score doesn't matter.  There is no need to add a store card for credit mix.

[Anonymous]

Thom Thumb is the guy who knows more about the LexisNexis insurance model codes than anybody else here I think -- with the exception of you, CD!  :-)

He sent me a link to for the auto insurance and a link for the home insurance codes.  Boy, were there a lot!  I have been unable to find those links (I forgot to save them).  I'd love to see them again, so if TT is reading this and wants to chime in, that would be great.

My memory about the "average CL" factor is that it was the average CL of revolving lines (period).  Thus it would have counted both store cards and non-store cards when it made that computation.  If so, a typical store card would be spanked twice: once for being a store card and again for lowering your Average CL (since store cards typically have low CLs compared to a major CC).

I very well could be wrong about that, however.  Maybe (as you say) the Average CL factor only looks at the average CL of non-retail cards. 

One fascinating thing I noticed (when I first skimmed through the codes) is that there were a series of codes devoted to spanking you for having an installment loan as your oldest account rather than a credit card.  Apparently the LN model wants your oldest account to be a credit card rather than (say) a mortgage or a student loan.  If I remember right, the LN model looks at the age of your oldest CC and divides that by the age of your oldest account.  If your oldest account is a credit card, then the ratio will be exactly 1.  If you have an installment loan as your oldest account, then the ratio will be < .99999999.  The lower the ratio is, the more you get spanked.  But you do get spanked even if the ratio is just under 1 (e.g. 0.99)

I will be spanked for a long time for this since my oldest account is a student loan and I doubt it will fall off for another 12 years.

I love your idea of putting together a summary of actionable advice for people who feel like improving their insurance scores.  That's awesome.

[Anonymous]

Here's an interesting question about "store cards."  It's clear that a Target card is a store card.  It's a card that is not only associated with Target but actually can only be used there..   It's also clear that a Chase Freedom or a Citi Doublecash are major credit cards -- absolutely not store cards.  They are not associated with any store and they can also be used at a wide variety of stores (grocery stores, gas stations, restaurants, etc.).

But it seems like there are cards that fall in between.  The card is strongly linked to a particular store (it has that store's icon and logo on it) but it also has a major CC icon on it (e.g. Amex or Visa or MC).  Are these hybrid cards classified as Retail cards or non-retail major cards?

[NRB525]

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@Anonymous wrote:

Here's an interesting question about "store cards."  It's clear that a Target card is a store card.  It's a card that is not only associated with Target but actually can only be used there..   It's also clear that a Chase Freedom or a Citi Doublecash are major credit cards -- absolutely not store cards.  They are not associated with any store and they can also be used at a wide variety of stores (grocery stores, gas stations, restaurants, etc.).

But it seems like there are cards that fall in between.  The card is strongly linked to a particular store (it has that store's icon and logo on it) but it also has a major CC icon on it (e.g. Amex or Visa or MC).  Are these hybrid cards classified as Retail cards or non-retail major cards?

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And then there's Macys AMEX, which to my understanding has two different credit lines on the same card: One in store, the other Everywhere Else.

Personally, I doubt the Store Card effect on any sort of credit decisions is worth worrying about; FICO or Insurance or otherwise. If one has to get store cards to get credit, use the available credit for benefits if you see the benefits. If you have to use store cards to get credit, you are not in a place where you can worry about gaming your insurance rates. If you get other cards, your insurance rates should be helped (if indeed there is an effect) by those credit cards. And once you start getting more regular credit cards, it's time to start cutting the store cards that do not provide benefits to your regular spend, or which your kids have outgrown. But these suggestions are just my regular suggestions for how to approach store cards as a rule, not because there's some They out there who is watching them.

"just because you're not paranoid, doesn't mean 'They' aren't out to get you"