Simulator Improvement by CC

[Anonymous]

The nitty gritty... all scores 666 - 670, Mortgage, Monster Student Loan $300k+, 2 Autos, 1 Smaller Student Loan < $15k, One Credit Card $1600/$2700, One Merchant Card $100/$1500.  No recent negatives in 2 years.... the negatives were from student loans that have now been rehabilitated.  In the past 30 days I had most of the negatives removed, some still pending.... Score stayed the same or went down 10pts in one case. 

Im a high income person still building networth (will take some time ... that student loand acrrues interest at the tune of $1900/mo)  The Fico Score simulator says that just getting a credit card will improve my score 45 to 50 pts depending on agencie.  

How accurate is that simulator and is that an instant improvement?

Im trying to get a descent rate on a new mortgage (2nd home) as its taking time to sell my first home and Im tired of throwing away equity by renting.

[jamesdwi]

having 2-3 national credit cards is the minimum to get the best score possible. 

[Anonymous]

Thx for the reply.  Wouldn't a new tradeline drop my credit or is it a case of net gain far outweight short term loss due to "newness"?

[SunriseEarth]

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@Anonymous wrote:

Thx for the reply.  Wouldn't a new tradeline drop my credit or is it a case of net gain far outweight short term loss due to "newness"?

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If you're buying relatively soon (as in, within the next 6 months), I wouldn't necessarily recommend getting a new CC.   You would benefit from improved UTIL, but you'd also take the HP, the new account ding, and the lowered AAoA.

The fastest way to improve your scores is to improve your UTIL on your CCs.  For optimal scoring, UTIL should overall be <10% (but more than zero) and <10% on each CC.  You also want balances posting on less than half of your CCs.   For you that means only one card should have a posted balance.   I recommend paying off your store card and paying the balance on your major CC to below $270 (10% of your current CL).   You could also see about getting a CLI on that card, too.   

Would you be willing to share what you two particular cards are?   We might be able to give more advice regards CLIs and balances.  

(edited: typo)

[Anonymous]

One is a CreditOneBank card I share with my husband, the other is a Best Buy Merchant Card.   I generaly hate CC's but the insidious nature of credit is that if you want a good mortgage rate you are forced to have them.

"EDIT" As a side note, my brother recently got a new CC 4 months ago and he said his score went to 780 over night and then started slowly coming down a few pts each month.

[Ubuntu]

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@SunriseEarth wrote:

You also want balances posting on less than half of your CCs.   For you that means only one card should have a posted balance.

I recommend paying off your store card and paying the balance on your major CC to below $270 (10% of your current CL).   You could also see about getting a CLI on that card, too.   

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I'm not disagreeing with the line in red, just making an addition, and I completely agree with the second line.

I had two cards for a considerable amount of time and in my experience with two cards you need to have exactly one card reporting a balance. If neither or both cards reported my score always dropped but then came right back up when I got back to just one reporting.

The optimal score may vary depending on your bucket or the total number of cards you have but I would say a general rule would be "less then half but always at least one".

[SunriseEarth]

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@Anonymous wrote:

One is a CreditOneBank card I share with my husband, the other is a Best Buy Merchant Card.   I generaly hate CC's but the insidious nature of credit is that if you want a good mortgage rate you are forced to have them.

"EDIT" As a side note, my brother recently got a new CC 4 months ago and he said his score went to 780 over night and then started slowly coming down a few pts each month.

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It's easy to see why you might hate credit if CreditOne is your only major CC.   I think credit is often hated because it's misunderstood.   I've learned to enjoy it for a few reasons.   For one, I feel safer using it.   If someone steals my CC info, then my credit limit could be compromised, but it someone stole my debit card info, my bank account could get wiped out.   I'd much rather the first situation, if I had to chose.   I also find it more organized to make one large payment to a card, as opposed to dozens of transactions from my bank.  Finally, I enjoy the cash back rewards I have just for buying what I normally do.  Using a PIF strategy has helped me out a lot.  

Any, to pull this back to topic, if you do decide to go for another CC, I'd recommend seeing what CC could meet your needs and would be attainable.   A new CC should help you get rewarded for the purchases you already make, not push you into debt.  However, if you don't want another card, don't get one.   Work with what you have to boost your scores.