Subprime and low limit cards

[janov]

I'm wondering about a question regarding having or not subprime cards (like credit one)

Usually this cards have low limit, high APR, and you try to get rid of it as soon as possible. I don't think that FICO score weights it in any different way but other lenders? If you apply for a big bank they can see as a bad thing that you have 3-500$ cards? Something like you're a not profitable costumer yet.

If this is true it means that you should get rid of it as soon as you get a nice card?

Sorry if it's a silly question, i'm wondering how it works

[Anonymous]

Credit one isn't weighted differently in the FICO algorithm than say Discover.

The only factors weighted are payment history, utilization, age of account etc etc

As for lenders, having a credit one card in most cases won't effect whether or not you get approved for their card. They are generally more concerned with your payment history and how you handle the limits you have. Also whether or not you are profitable to them. Income and how many cards you have factor into that more so than what card you have.

[Anonymous]

 But yes, generally when people's score improve and they are able to get higher limits with other cards, they tend to close cards such as Credit one.

[marty56]

As lonng as there is no AF, I would never close a CC.  Let it age and help your profile.  Back in my credit dark days, a $450 limit Samsclub  and gas card card got me through some rough times.

[FireMedic1]

FICO doesnt care what the name of the card is. Theres no bonus points for a Chase, AMEX, ect. What your total credit limits are. FICO likes whats reported each month, below 8.9%, the age of the account, the AAoA's, and at least 3 cards for best scoring possibilities. Older your file and the scores that come with age go up. Then creditors see the history, or computers, and then decisions are made to approve you. The card/s report as secured. So if you prove yourself. Then you can graduate to unsecured for your hard work.

[calyx]

Like others have said - it has no impact on your FICO score.

I have seen people get very concerned about manual underwriting, and worry that sub-prime or secured cards will negatively affect you if someone is looking at your report, but I don't think they do.    If they're looking at your overall profile/behavior outside of FICO, that's what matters, not the actual card.

I realize that I'm an n of 1 - but I had three secured cards when Chase UW gave me a CSP with a 17k limit and 2 paid collections.  They were clearly OK with lower limits (my highest at the time was 1400 with Discover) and secured cards.    If my subprime hadn't had an annual fee, I'd still have it.    I don't mind having it on my report, I just mind fees that I can avoid.

So don't stress sub primes or low limits - just manage them well - if that's all you can get.  That's what FIs care about:  Do you pay your bills and will you give them swipe fees.

[janov]

thanks for all the replies

I'm realizing today that i'm still thinking about credit with my experience in my country, and the sub prime card thing could totally be a problem over there. If a credit card market actually exist 

I wasn't asking for my situation (I basically have only low limits so not a lot of choices). I was curious since evaluating your profile from the "nobility" of other lender that choose to work with you is something could happen in my country.

I'm trying to understand as much as possible, today i went in bank and speak with a consultant for business and he made me realize that i made a mistake in UTL in this months. I've always used A LOT my card and paid in full before statement cut and never report any balance. So he told me that in this way i'm not showing any kind of usage, like I don't have any payment history, and that's the reason for most of my denials 

This usage way is actually the opposite of what banks teach us in Italy, instead is one of the worse thing to do.

Thanks for all the help i'm learning a lot on this forum!