YACST: (Yet Another Credit Score Thread)

[ShotgunSteven]

I had been carrying a relatively small balance on two separate credit cards. I paid one off the other day and have no plans to use it again, but I have had the card for some time and plan to keep it so as not to affect my score by closing the account.

Will paying the card off have any sort of affect on my score, or do they only care about the total amount of debt that you have across all of your accounts?

 

[Dulanic]

It really matters across all cards. However, if a card has very high usage 50% or more (or something like that) it can have a negative effect beyond your total debt to limit.

 

[kranky]

Most think that they factor in both usage on each card individually, plus usage across all cards. Lower utilization is always better for your score, but some people have seen small increases in their score when going from no usage to using a tiny fraction (like 2%) of their credit line on one or two cards.

 

[spidey07]

No it will not. As long as you keep using it.

Even if you charge 50,000 dollars a month and pay it off every month you will show you are using credit. There is NO...I REPEAT NO reason to "carry" a balance to improve your score. All that does is cost you money.

1) pay all bills in full on time
2) use the credit you have
3) repeat

-edit-
"carrying" a balance is probably the worst thing you can do for your credit score. Not only does it affect debt/credit ratio of revolving credit it makes you pay interest. Lose/Lose.

 

[Muadib]

As Steven's question has been answered, I'll post one of my own.

I just got a notice in the mail on credit cards I haven't used in over 3 years. They are all from the same bank, thanks to takeovers. They say if I don't used them, they are going to close the accounts. If they do close them, how will this affect my score?

 

[kranky]

Originally posted by: Muadib
As Steven's question has been answered, I'll post one of my own.

I just got a notice in the mail on credit cards I haven't used in over 3 years. They are all from the same bank, thanks to takeovers. They say if I don't used them, they are going to close the accounts. If they do close them, how will this affect my score?

What are the credit limits on the cards, and what are the credit limits on the other credit cards you have?

Two exaggerated scenarios:
1. These 3 cards have $3,000 total in credit lines, and you have $100,000 in credit lines on other cards = closing these cards will have minimal effect on your score.

2. These 3 cards have $100,000 total in credit lines, and you have $3,000 in credit lines on other cards = closing these cards will have a potentially large negative effect on your score.

 

[alkemyst]

There are a couple things people have not given the full story on.

Credit score is definitely based on a combination of how much you have available and how much you are using...pushing it past 50% starts to degrade your credit.

New cards impact a score downward...older ones help.

Esp. in today's markets not using a card at all will sometimes get it canceled or the limit severely reduced by the issuer. If you have a nice $10k card just sitting out there while you are using your lower limit card a nearly full capacity, and then they cancel that higher limit card...you can see your score drop dramatically over nothing you did directly.

Also most recommend paying off, but not canceling cards unless there are fees connected to them.

 

[alkemyst]

Originally posted by: Muadib
As Steven's question has been answered, I'll post one of my own.

I just got a notice in the mail on credit cards I haven't used in over 3 years. They are all from the same bank, thanks to takeovers. They say if I don't used them, they are going to close the accounts. If they do close them, how will this affect my score?

Same as if you did. If losing these open balances places your current debt to balance ratio over 50% or so, your score will take a hit.

Use each card for some purchase regularly and simply pay them off when you get home.

I have heard A LOT of people talking about this. My Sears MC was canceled and hit me for about $6000 in balance lost. It was a rainy day card with a decent limit, so-so rate.

 

[Muadib]

Originally posted by: kranky

Originally posted by: Muadib
As Steven's question has been answered, I'll post one of my own.

I just got a notice in the mail on credit cards I haven't used in over 3 years. They are all from the same bank, thanks to takeovers. They say if I don't used them, they are going to close the accounts. If they do close them, how will this affect my score?

What are the credit limits on the cards, and what are the credit limits on the other credit cards you have?

Two exaggerated scenarios:
1. These 3 cards have $3,000 total in credit lines, and you have $100,000 in credit lines on other cards = closing these cards will have minimal effect on your score.

2. These 3 cards have $100,000 total in credit lines, and you have $3,000 in credit lines on other cards = closing these cards will have a potentially large negative effect on your score.

I'll have to look and see what the limits are. I'll be back!

 

[Muadib]

Originally posted by: alkemyst

Originally posted by: Muadib
As Steven's question has been answered, I'll post one of my own.

I just got a notice in the mail on credit cards I haven't used in over 3 years. They are all from the same bank, thanks to takeovers. They say if I don't used them, they are going to close the accounts. If they do close them, how will this affect my score?

Same as if you did. If losing these open balances places your current debt to balance ratio over 50% or so, your score will take a hit.

Use each card for some purchase regularly and simply pay them off when you get home.

I have heard A LOT of people talking about this. My Sears MC was canceled and hit me for about $6000 in balance lost. It was a rainy day card with a decent limit, so-so rate.

I haven't used my Sears card in almost 10 years. It hasn't been canceled though, at least not yet. The rate on mine sucked, so I just forgot about it.

 

[alkemyst]

Originally posted by: Muadib

Originally posted by: alkemyst

Originally posted by: Muadib
As Steven's question has been answered, I'll post one of my own.

I just got a notice in the mail on credit cards I haven't used in over 3 years. They are all from the same bank, thanks to takeovers. They say if I don't used them, they are going to close the accounts. If they do close them, how will this affect my score?

Same as if you did. If losing these open balances places your current debt to balance ratio over 50% or so, your score will take a hit.

Use each card for some purchase regularly and simply pay them off when you get home.

I have heard A LOT of people talking about this. My Sears MC was canceled and hit me for about $6000 in balance lost. It was a rainy day card with a decent limit, so-so rate.

I haven't used my Sears card in almost 10 years. It hasn't been canceled though, at least not yet. The rate on mine sucked, so I just forgot about it.

I have three sears cards...they canceled the non-store one. Their rates are terrible though.

 

[Muadib]

Originally posted by: Muadib

Originally posted by: kranky

Originally posted by: Muadib
As Steven's question has been answered, I'll post one of my own.

I just got a notice in the mail on credit cards I haven't used in over 3 years. They are all from the same bank, thanks to takeovers. They say if I don't used them, they are going to close the accounts. If they do close them, how will this affect my score?

What are the credit limits on the cards, and what are the credit limits on the other credit cards you have?

Two exaggerated scenarios:
1. These 3 cards have $3,000 total in credit lines, and you have $100,000 in credit lines on other cards = closing these cards will have minimal effect on your score.

2. These 3 cards have $100,000 total in credit lines, and you have $3,000 in credit lines on other cards = closing these cards will have a potentially large negative effect on your score.

I'll have to look and see what the limits are. I'll be back!

Ok, I guess I need to start using these. All 3 have at least 10k limits. Two or the three have great rates, at least according to their website.

I had to order new cards for two of them, because I can't find one, and my ex has the other. That one hasn't been used in 10 years.:shocked:

 

[SoulAssassin]

You can usually consolidate the lines together and turn two cards with 10k lines into one with a 20k line. Assuming rates are equal, keep the one open for the longest. One advantage of having the higher single line is many creditors will try to keep up with the joneses and give you a higher line as well. Once I got my first card with a 50k line it became a lot easier to get others.

 

[Muadib]

Originally posted by: SoulAssassin
You can usually consolidate the lines together and turn two cards with 10k lines into one with a 20k line. Assuming rates are equal, keep the one open for the longest. One advantage of having the higher single line is many creditors will try to keep up with the joneses and give you a higher line as well. Once I got my first card with a 50k line it became a lot easier to get others.

I'm fearful of going that route, because of the threat of fraud. The rates aren't the same either, the 2 great rates are in the single digits, while the other is 15%. The 15% one is the oldest, or I'd let it go.

 

[SoulAssassin]

Originally posted by: Muadib

Originally posted by: SoulAssassin
You can usually consolidate the lines together and turn two cards with 10k lines into one with a 20k line. Assuming rates are equal, keep the one open for the longest. One advantage of having the higher single line is many creditors will try to keep up with the joneses and give you a higher line as well. Once I got my first card with a 50k line it became a lot easier to get others.

I'm fearful of going that route, because of the threat of fraud. The rates aren't the same either, the 2 great rates are in the single digits, while the other is 15%. The 15% one is the oldest, or I'd let it go.

That's illogical paranoia. You are protected with maximum out of pocket loss of $50 and no major issuer has charged anyone that $50 in years. If they are within a decent period of time from each other than go with the one with the lowest rate. People get too worked up with trying to get the absolute highest credit score possible. If one has been opened for a year or two less it's not really going to make a difference.

This thread goes into consolidating including listing what companies let you do it:

http://www.fatwallet.com/forums/finance/237296

 

[ShotgunSteven]

Originally posted by: spidey07
No it will not. As long as you keep using it.

Even if you charge 50,000 dollars a month and pay it off every month you will show you are using credit. There is NO...I REPEAT NO reason to "carry" a balance to improve your score. All that does is cost you money.

1) pay all bills in full on time
2) use the credit you have
3) repeat

-edit-
"carrying" a balance is probably the worst thing you can do for your credit score. Not only does it affect debt/credit ratio of revolving credit it makes you pay interest. Lose/Lose.

I wasn't planning on carrying a balance for the sake of building credit or anything like that, I was asking since I had taken a recent hit to my score from a check, and was curious if paying one off might help edge it back upwards.

NOTE: That is not the reason I paid it off, I paid it off because I don't like carrying a balance but had no choice for a time.

 

[AlienCraft]

Originally posted by: Muadib
Ok, I guess I need to start using these. All 3 have at least 10k limits. Two or the three have great rates, at least according to their website.

I had to order new cards for two of them, because I can't find one, and my ex has the other. That one hasn't been used in 10 years.:shocked:

You need to turn that one off as far as she's concerned. Keeping someone you're not with on as an authorized user can affect you if they default.

 

[Muadib]

Originally posted by: SoulAssassin

Originally posted by: Muadib

Originally posted by: SoulAssassin
You can usually consolidate the lines together and turn two cards with 10k lines into one with a 20k line. Assuming rates are equal, keep the one open for the longest. One advantage of having the higher single line is many creditors will try to keep up with the joneses and give you a higher line as well. Once I got my first card with a 50k line it became a lot easier to get others.

I'm fearful of going that route, because of the threat of fraud. The rates aren't the same either, the 2 great rates are in the single digits, while the other is 15%. The 15% one is the oldest, or I'd let it go.

That's illogical paranoia. You are protected with maximum out of pocket loss of $50 and no major issuer has charged anyone that $50 in years. If they are within a decent period of time from each other than go with the one with the lowest rate. People get too worked up with trying to get the absolute highest credit score possible. If one has been opened for a year or two less it's not really going to make a difference.

This thread goes into consolidating including listing what companies let you do it:

http://www.fatwallet.com/forums/finance/237296

Tell that to my friend. He's gone though hell trying to get things back to normal. He thinks he good now, but it took almost a year to get there. The bank was almost no help in getting things fixed. Paranoid? You bet.

Originally posted by: AlienCraft

Originally posted by: Muadib
Ok, I guess I need to start using these. All 3 have at least 10k limits. Two or the three have great rates, at least according to their website.

I had to order new cards for two of them, because I can't find one, and my ex has the other. That one hasn't been used in 10 years.:shocked:

You need to turn that one off as far as she's concerned. Keeping someone you're not with on as an authorized user can affect you if they default.

She never used it, so I wasn't worried about that. It had to be expired by now.