93EXCivic wrote:
BoxheadTim wrote:
93EXCivic wrote:
Also I as told that leaving a little balance on your card every so often helps your credit score. Is there any in truth to this?
I think this is more rumour than fact - I make a big effort to keep my reported card utilization under 10% of the limit so more often than not I end up having to make payments before the billing date. Checking the score over on Credit Karma suggests that having a zero balance will give the score a little additional help. The big one is to keep the reported balances under 10% of total credit limits though for score boosting purposes. The score will still improve over time if you keep the utilization below 30% but it climbs a little faster if you keep it below 10%.
Well until I got a bump in credit at my credit union I was generally around that 30% mark and now I should be around 15%.
According to the usual personal finance experts, you're good if you stay below 30% but get a bit of a bump if you can stay below 10%. Just try not to go over 30%.
50% is the magic mark on credit balances.
The difference between a 50% balance and a 25% balance (the maximum credit score point) is so slight that it's not enough to worry about.
The cool thing about this is that if you are paying cards down to maximize your credit score you'll be much better off paying 2 cards down to 50% than paying one card down to 25%.
I get this data from actual performance at the credit scoring systems not some aftermarket system that's guessing what will happen.
To minimize interest paid then you want your balance as low as you can get it or pay it off, but here we've been talking about ways to boost your credit score and that takes usage AND it takes having a certain number of pieces of open credit.
To get & maintain a high credit score requires a certain number of open pieces of credit. To get & keep a 620 score (the minimum score to get most mortgages) it takes 3-4 pieces of open & good credit. If you want an 800+ it might take 10-12.
The actual number depends upon whether or not you have any negative information on the bureau or whether you've maxed out your credit cards or not.
I'm working with a customer right now that can't get his scores up to a 620 level with 48 pieces of open credit. 48 pieces of open good credit ought to qualify him for the max credit score, but 44 pieces of that credit is student loans but in the early years student loans report with credit balances above the credit limit.
He had the other 4 credit cards maxed out and we got his credit scores raised on them and then got the info incorporated into his report and it raised his credit scores 30 points.
Since credit bureaus don't know your income they can't look at you and say you are over extended so that's not a factor in his low scores. The overriding factor is loan balances to credit limits.
See if the company you work for can get a corporate card for travel. I know some companies where I work have them for travel arrangements and are now giving corporate cards to their folks that travel regularly. I have one but working for the gubmint it was easy to get and mandatory if you travel. I use it regularly. Was just notified of my 5th trip of the year next week and already have what is now my 6th trip already arranged for the week after.
Corporate cards issued to an individual are primarily secured by your company although based off your credit. As a side, could help boost your credit rating. Does usually have rules, such as only authorized for business use. And sometimes all due at time of billing. In other words, no payment plan. Which shouldn't be an issue if you pay it when your company pays you for the trip.
EvanR wrote:
EastCoastMojo wrote:
You can get a free copy of your credit report from each company once a year.
More info about geting your reports
Yes, you can get a free *credit report*, but the only place I know to get a score is quizzle.com
Unfortunately, since credit scores are based on proprietary algorithms, any score you get from a 3rd party can only be an estimate based on their own algorithm.
There is also creditsesame.com
carguy123 wrote:
50% is the magic mark on credit balances.
The difference between a 50% balance and a 25% balance (the maximum credit score point) is so slight that it's not enough to worry about.
The cool thing about this is that if you are paying cards down to maximize your credit score you'll be much better off paying 2 cards down to 50% than paying one card down to 25%.
I get this data from actual performance at the credit scoring systems not some aftermarket system that's guessing what will happen.
To minimize interest paid then you want your balance as low as you can get it or pay it off, but here we've been talking about ways to boost your credit score and that takes usage AND it takes having a certain number of pieces of open credit.
To get & maintain a high credit score requires a certain number of open pieces of credit. To get & keep a 620 score (the minimum score to get most mortgages) it takes 3-4 pieces of open & good credit. If you want an 800+ it might take 10-12.
The actual number depends upon whether or not you have any negative information on the bureau or whether you've maxed out your credit cards or not.
I'm working with a customer right now that can't get his scores up to a 620 level with 48 pieces of open credit. 48 pieces of open good credit ought to qualify him for the max credit score, but 44 pieces of that credit is student loans but in the early years student loans report with credit balances above the credit limit.
He had the other 4 credit cards maxed out and we got his credit scores raised on them and then got the info incorporated into his report and it raised his credit scores 30 points.
Since credit bureaus don't know your income they can't look at you and say you are over extended so that's not a factor in his low scores. The overriding factor is loan balances to credit limits.
Thank you very much for that post.
carguy123 wrote:
To get & maintain a high credit score requires a certain number of open pieces of credit. To get & keep a 620 score (the minimum score to get most mortgages) it takes 3-4 pieces of open & good credit. If you want an 800+ it might take 10-12.
I know you're talking averages on here while I only have a single datapoint (me), but I've fairly easily managed to get a mid-700s score (confirmed by our CU during our mortgage application) with only two pieces of plastic and no other loans, but also no negative info.
In other words, YMMV, at least a little.
Boxhead Tim I said get & KEEP a high credit score. I also said it depended upon what else you had on your report.
If you had other old, good paid off stuff, that has a halo effect - for a while.
But the way the scoring system works if you only have 2 pieces of plastic and that's all that's on your report you can't get & keep that high of a score. By recently paying something way down or off your scores will rise for a reporting cyle or 2, but then it will drop to where it's supposed to be.
Activity drives your score.
carguy123 wrote:
To get & maintain a high credit score requires a certain number of open pieces of credit. To get & keep a 620 score (the minimum score to get most mortgages) it takes 3-4 pieces of open & good credit. If you want an 800+ it might take 10-12.
I'm working with a customer right now that can't get his scores up to a 620 level with 48 pieces of open credit. 48 pieces of open good credit ought to qualify him for the max credit score, but 44 pieces of that credit is student loans but in the early years student loans report with credit balances above the credit limit.
How do you even have 10-12 pieces of open credit?
93EXCivic wrote:
carguy123 wrote:
To get & maintain a high credit score requires a certain number of open pieces of credit. To get & keep a 620 score (the minimum score to get most mortgages) it takes 3-4 pieces of open & good credit. If you want an 800+ it might take 10-12.
I'm working with a customer right now that can't get his scores up to a 620 level with 48 pieces of open credit. 48 pieces of open good credit ought to qualify him for the max credit score, but 44 pieces of that credit is student loans but in the early years student loans report with credit balances above the credit limit.
How do you even have 10-12 pieces of open credit?
That alone would terrify me, my memory would forget one a month
93EXCivic wrote:
carguy123 wrote:
To get & maintain a high credit score requires a certain number of open pieces of credit. To get & keep a 620 score (the minimum score to get most mortgages) it takes 3-4 pieces of open & good credit. If you want an 800+ it might take 10-12.
I'm working with a customer right now that can't get his scores up to a 620 level with 48 pieces of open credit. 48 pieces of open good credit ought to qualify him for the max credit score, but 44 pieces of that credit is student loans but in the early years student loans report with credit balances above the credit limit.
How do you even have 10-12 pieces of open credit?
It slips up on you?
Most of the time when I see this it's the wife having 6 or more of those cards at specialty shops or someone with 4 or more cards at a couple of the same places. They mentally count them as one.
Duke
PowerDork
3/12/13 4:32 p.m.
93EXCivic wrote:
How do you even have 10-12 pieces of open credit?
Buy a fridge at Home Depot and use the "90 days same as cash" deal - that's actually a credit card, and stays open once you pay off the balance. Do the same thing with a sofa or a mattress. Have a couple store cards you got for that 15% off signing bonus. Throw all these in a drawer and forget about them. That's how you get there.
carguy123 wrote:
Boxhead Tim I said get & KEEP a high credit score. I also said it depended upon what else you had on your report.
If you had other old, good paid off stuff, that has a halo effect - for a while.
I don't get the old halo stuff, remember, I'm pretty new to the country.
carguy123 wrote:
But the way the scoring system works if you only have 2 pieces of plastic and that's all that's on your report you can't get & keep that high of a score. By recently paying something way down or off your scores will rise for a reporting cyle or 2, but then it will drop to where it's supposed to be.
Activity drives your score.
I guess it depends on your definition of "keep" - mine's been hovering in the mid-700s ballpark from a good 12-18 months on the two pieces of plastic alone (actually, at least half the time was one a single piece of plastic). Of course now we have a mortgage showing up on our credit reports so I can't blame the score on the two pieces of plastic anymore 
.
Yes, a mortgage ups your score all by itself.
By halo effect I mean that the things you do have some impact that lasts for a while after the event. The reason for that is that creditors don't report every month (that would cost them too much money) so with a 3-4 month reporting cycle events live for a few reporting cycles.
I don't see how your score could have stayed up there with only 2 cards, unless it was the mortgage. The way the scores are computed doesn't allow it. OR I see people all the time zeroing out their cards (not closing them) which gives them more cards on the credit bureau than they would count as active themselves. This also gives them a lot more available credit which raises their scores. By chance do you have other cards that are open but zero'd out. That would explain it.
Mortgage has only been in effect for the last six-odd months, the score was between 720-750 for the year before it at the very least.
I make sure that I pay off the majority of the CC balance before the billing date so my utilization shows as very low and thus the available credit "appears" higher than it would be if I just let the balance sit until the billing date and then paid off the card. I think in the last year I only had one month where the reported utilization went above 10%.
BoxheadTim wrote:
Mortgage has only been in effect for the last six-odd months, the score was between 720-750 for the year before it at the very least.
I make sure that I pay off the majority of the CC balance before the billing date so my utilization shows as very low and thus the available credit "appears" higher than it would be if I just let the balance sit until the billing date and then paid off the card. I think in the last year I only had one month where the reported utilization went above 10%.
That in and of itself is much lower than normal which would help. So you have no other paid off cards on the report?
FICO, VANTAGE and all the major scoring engines say that it takes much more than that get more than a spike to that score. That's also been my experience. I've never seen a person with only 2 open pieces of credit get out of the 600s except as a spike that happens just after closing multiple pieces of credit.
The pecking order for deriving credit scores is like this;
Mortgage credit gives the most credit
Revolving the next
Installment the next (although mortgage lending scores weight installment higher because it's your next biggest payment - think cars)
Other credit gives the least.
A blend supposedly gives the maximum score.
carguy123 wrote:
BoxheadTim wrote:
Mortgage has only been in effect for the last six-odd months, the score was between 720-750 for the year before it at the very least.
I make sure that I pay off the majority of the CC balance before the billing date so my utilization shows as very low and thus the available credit "appears" higher than it would be if I just let the balance sit until the billing date and then paid off the card. I think in the last year I only had one month where the reported utilization went above 10%.
That in and of itself is much lower than normal which would help. So you have no other paid off cards on the report?
No, I only ever had those two cards over here. My theory so far was that I have a comparatively high limit on both cards and with the "payment management" I thus have quite a lot of available credit showing all the time.
carguy123 wrote:
The pecking order for deriving credit scores is like this;
Mortgage credit gives the most credit
Revolving the next
Installment the next (although mortgage lending scores weight installment higher because it's your next biggest payment - think cars)
Other credit gives the least.
A blend supposedly gives the maximum score.
I certainly noticed the effects of the mortgage - obviously the score tanked directly after the mortgage was first reported on the credit report but we're now just about out of that hole and appear to have recovered from the "damage".
Duke wrote:
93EXCivic wrote:
How do you even have 10-12 pieces of open credit?
Buy a fridge at Home Depot and use the "90 days same as cash" deal - that's actually a credit card, and stays open once you pay off the balance. Do the same thing with a sofa or a mattress. Have a couple store cards you got for that 15% off signing bonus. Throw all these in a drawer and forget about them. That's how you get there.
That's basically how I started credit. Paid cash for a washer&dryer at sears and they gave me a card. Paid cash for a microwave back when they first started selling at Penney's and got a card. Used the get a discount if you apply for our card and shredded the cards when I got them. Except the Sears card. Used it for things I needed now but couldn't afford all at once, like tires and paid of early. The Sears card led to a Discover card which led to lower interest rate Visa. Only have 2 low interest Visas now, one I use to pay the kids college and the other for online purchases and emergencies. Also have a debit card that is also a Visa but never use it as a credit card, treat it like a checkbook and buy/debit based on what is in the account.
Zombie Thread from a canoe!!!!
Zombie Thread from a canoe!!!!
Zombie Thread from a canoe!!!!
