Quick little credit tips.

[Traffic_Cone]

Since questions about credit are brought up once and awhile, thought it would be a good idea to post up my some tips that I normally convey when it's brought up here and on other boards . Also if anyone else has anything to add jump on in because knowledge always benefit's everyone.

-Keep utilization below 30%.
-Don't apply for subprime cards.
-Mulitple store card's isn't always a good idea
-Don't always try for student card's because even though their easy to get they are not really generous on credit lines if you plan to keep it open for awhile.
-Apply for card's that report to all 3 credit bureau's (Transunion,Experian,Equifax)
-Keep the number of hard inquiries down to a minimum because they stay on your file for 2 years.
-Bump soft credit pull's off by using 24+1hr credit watching programs such as TrueCredit from TransUnion.
-Don't bump your credit files to much because you cant create split-files which is not good and I can explain if anyone would like to hear about it.
-If you do apply for student card's try and convert them into other cards by calling the # on the back of your new card once you receive it. Citi Dividend for Student's -> to Citi Simplicity or etc.
-Once you build good relationship's you will recieve generous CL's automatically and sometimes having to sacrifice a hard pull to lower your overall utilization.
-Once you have generous size CL's try to stay under 15% utilization.
-Just because you pay it in full every month doesn't mean jack because if you have terrible utilzation your SOL.
-No matter if you PIF they make money off you either way because they charge the vendor a % fee per transaction (Visa/Mc 1.5%-2%,Disc 2%-3%, Amex 3%-4.5%)
-And having a few credit card's does not create debt, it helps prevent if a creditor rate jack's you leaving you SOL. If a situation occur's like such other card's are their for lower % balance transfer's and etc.

This is barely touching the surface but if anyone has any questions feel free to post up and I can try and answer to the best of my knowledge.

-Josh

 

[RDJ]

Just because you pay it in full every month doesn't mean jack because if you have terrible utilzation your SOL.

+1 on this ....

Interesting additional point ... I just ran my credit ... They have one of those credit predictors ... I found out that my score would go up MORE if I kept the debt and paid regular monthly payments rather than pay what I was going to pay off ... .. by about 50 points. I paid it off anyway but making on-time montly payments will raise your score more than paying stuff off.

 

[Common]

^^^^yes because banks like that since they make lil more money, plus volume is volume..........more payments equals higher score

 

[SILVER06GT]

I deal with credit everyday, since Iam a finance manager for a car dealership, and another thing I see is people with open credit cards and 0 balance if you dont use the card it will not help you, if you dont use it then close it, and always remember that credit unions use diferent scoring systems then banks, and they all have their own internal system
Thanks
Chris

 

[AcE 666]

Work the system and get the 0% card for 12 months that also include 0& on balance transfers, and transfer everything to that card to avoid paying interest.

 

[RDJ]

I deal with credit everyday, since Iam a finance manager for a car dealership, and another thing I see is people with open credit cards and 0 balance if you dont use the card it will not help you, if you dont use it then close it, and always remember that credit unions use diferent scoring systems then banks, and they all have their own internal system
Thanks
Chris

Well this is just bogus bullshyt. if you work as a finance manager I wouldn't want you doing any of my stuff. ....

Open credit cards with a zero balance WILL help you because they lower you percentage of credit used. 3 cards, 2 of which have a zero balance is a pant load better than 3 cards with a balance on all of them.

EVERY credit organization will tell you that closing credit accounts HURTS your score, not helps it. part of the reason is as stated above .. your percentage of credit used goes up when you close unused accounts. Better to leave it open until the creditor decides to close it.

I don't know about most credit unions but mine uses the same credit scoring as the banks. They use Equifax or Experion (cant remember which E it is) and the score matters. Credit Unions are a little more forgiving of negative information than banks but that is a call the loan officer makes, NOT as a result of using a different scoring system. As I said, I don't know about ALL credit unions but the 4 I have dealt with were as I described.

 

[ROSENDO SANCHEZ]

"Just because you pay it in full every month doesn't mean jack because if you have terrible utilzation your SOL."

I have a couple of CC's with zero balance and I only rarely use them to make purchases from eBay..as a matter of fact I have a credit balance on them. When I do make a purchase with my CC, I make the payment in full even before the monthy cycle period ends.

Does that help my credit score?

Should I just close the acct. on just one of them?

 

[hardcore35th]

I deal with credit everyday, since Iam a finance manager for a car dealership, and another thing I see is people with open credit cards and 0 balance if you dont use the card it will not help you, if you dont use it then close it, and always remember that credit unions use diferent scoring systems then banks, and they all have their own internal system
Thanks
Chris

100%wrong bro.

 

[RDJ]

^^^^yes because banks like that since they make lil more money, plus volume is volume..........more payments equals higher score

Volume is not the factor .. credit history is the factor . the longer you have a credit card or open line of credit and make on time regular payments your payment history get longer. A longer good creit history makes a higher score ...

The credit predictor I was using had nothing to do with a bank ... When dealing with credit issues I try to avoid places obviously associated with banks.

 

[SILVER06GT]

Well this is just bogus bullshyt. if you work as a finance manager I wouldn't want you doing any of my stuff. ....

Open credit cards with a zero balance WILL help you because they lower you percentage of credit used. 3 cards, 2 of which have a zero balance is a pant load better than 3 cards with a balance on all of them.

EVERY credit organization will tell you that closing credit accounts HURTS your score, not helps it. part of the reason is as stated above .. your percentage of credit used goes up when you close unused accounts. Better to leave it open until the creditor decides to close it.

I don't know about most credit unions but mine uses the same credit scoring as the banks. They use Equifax or Experion (cant remember which E it is) and the score matters. Credit Unions are a little more forgiving of negative information than banks but that is a call the loan officer makes, NOT as a result of using a different scoring system. As I said, I don't know about ALL credit unions but the 4 I have dealt with were as I described.

How do you figure a credit card with a 5000 limitand a 0 balance is helping you, if you are not using the card then it is not helping you and out here most of the credit unions have a different scoring system, with my credit union I score a 975 now all three reporting agencies score from a 300-850, so I asked my credit union how the hell do you get a 975 when it only goes to a 850 and they told me they have a different scoring system.
and PS.Iam not trying to turn this into a sh*t talking session

 

[RDJ]

How do you figure a credit card with a 5000 limitand a 0 balance is helping you, if you are not using the card then it is not helping you and out here most of the credit unions have a different scoring system, with my credit union I score a 975 now all three reporting agencies score from a 300-850, so I asked my credit union how the hell do you get a 975 and they have a completely different system.

As I said ... My comments on the credit unions is based of 4 that I deal with or have delt with. Your credit union does use a different system. but I think yours is the exception not the rule.

As far as the cards go ... A large part of your score is amount of credit used vs. amount of credit available. for example ...

You have three cards:

CITI - Visa credit LIMIT 5000 with a 3450.00 balance due
BOA - Visa Credit LIMIT 2000 With a 1500.00 balance due
DISC. Credit LIMIT 3000 with a 2500.00 Balance due

Total credit available 10,000 Balance due 7450.00 percentage of credit line used 74% this will not look good because you are so close to maxing out your credit line

Now take the same cards but have a zero balance on the BOA card and the Discover card.

Total credit available 10,000 balance due 3450.00 percentage of credit line used 34% ... that is gonna look a TON better than the 74%. It will not hurt you at all ... ... but that 74% shows that you may not be managing your money as well as you should be and it will make creditors look very hard at extending you more credit.

 

[RDJ]

"Just because you pay it in full every month doesn't mean jack because if you have terrible utilzation your SOL."

I have a couple of CC's with zero balance and I only rarely use them to make purchases from eBay..as a matter of fact I have a credit balance on them. When I do make a purchase with my CC, I make the payment in full even before the monthy cycle period ends.

Does that help my credit score?

Should I just close the acct. on just one of them?

DO NOT close either one of them ... read my further comments my post directly above this one for an explination of why ... Believe me this is something I have researched extensively in an attempt to get my finances under control over the last several years.

 

[AcE 666]

That is true. Having a lot of credit available will make it look better then having 2 cards and having them both at 90%

 

[RDJ]

That is true. Having a lot of credit available will make it look better then having 2 cards and having them both at 90%

Be careful tho too many cards and the benifit begins to decrease. the general rule of thumb from what I have been able to tell is 2 or maybe 3 major credit cards and no more than 1 or 2 store cards. After that the benfits will go down. credit history is a VERY important thing. I have all of mine paid off but will carry a small balance to maintain a credit history with them. I am talking like 2 or 3 hundred balance on a 9500.00 credit limit card.

 

[Wishing4Cobra]

Im just trying to get my credit developed. Since im using the wells fargo prepaid C.C right now. Then after a year they refund the money and it will turn into a real CC. Because if i apply for a CC right now most of the companies will not approve because i have no credit. This is a good thread, how should i get my credit faster? I have cable and phone bills under my name and i pay it on time. I want to be able to have a credit credit score my whole lifetime.

 

[AcE 666]

Im just trying to get my credit developed. Since im using the wells fargo prepaid C.C right now. Then after a year they refund the money and it will turn into a real CC. Because if i apply for a CC right now most of the companies will not approve because i have no credit. This is a good thread, how should i get my credit faster? I have cable and phone bills under my name and i pay it on time. I want to be able to have a credit credit score my whole lifetime.

How old are you? You should be able to qualify for a student card. Just make sure you pay on time and dont go over on your limit and in a year you will get the credit card. Maybe as little as 6 months it depends. btw I work for Wells Fargo :thumbsup:

 

[Tampa03cobra]

I am curious, how does credit counseling adversely affect your credit? How badly I guess I mean.

Lets say you had 3 cards with total of 10,000 in debt. You didn't allow any of them to have late payments, but you just couldn't keep up with it, so you went into debt management to help them get paid off (They negotiate the interest rate down and then you pay them the entire total, but the card is inactive). This is still better than just not paying right?

 

[SILVER06GT]

As far as the cards go ... A large part of your score is amount of credit used vs. amount of credit available. for example ...

You have three cards:

CITI - Visa credit LIMIT 5000 with a 3450.00 balance due
BOA - Visa Credit LIMIT 2000 With a 1500.00 balance due
DISC. Credit LIMIT 3000 with a 2500.00 Balance due

Total credit available 10,000 Balance due 7450.00 percentage of credit line used 74% this will not look good because you are so close to maxing out your credit line

Now take the same cards but have a zero balance on the BOA card and the Discover card.

Total credit available 10,000 balance due 3450.00 percentage of credit line used 34% ... that is gonna look a TON better than the 74%. It will not hurt you at all ... ... but that 74% shows that you may not be managing your money as well as you should be and it will make creditors look very hard at extending you more credit.

Now I dont really disagree with you but I dont agree 100% rather then having 3400 on 1 card it would be better to have that 3400 spread out on to the 3 cards, because a card that is never used and has a limit of 5000 never shows any payment history, never shows a highest balance or any balance for that matter, so rather then just using 1 card for everything and leaving the 2 other cards @ 0 balance use all 3 and even it out between them and never exceed 30% of the limit

 

[SILVER06GT]

I am curious, how does credit counseling adversely affect your credit? How badly I guess I mean.

Lets say you had 3 cards with total of 10,000 in debt. You didn't allow any of them to have late payments, but you just couldn't keep up with it, so you went into debt management to help them get paid off (They negotiate the interest rate down and then you pay them the entire total, but the card is inactive). This is still better than just not paying right?

When you are in credit counseling you are not allowed to get anymore debt while in c/c, and it will report on your credit report that the account is in credit counseling. as far as your credit score goes, I couldnt tell you how it affects it, if any at all

 

[RDJ]

Now I dont really disagree with you but I dont agree 100% rather then having 3400 on 1 card it would be better to have that 3400 spread out on to the 3 cards, because a card that is never used and has a limit of 5000 never shows any payment history, never shows a highest balance or any balance for that matter, so rather then just using 1 card for everything and leaving the 2 other cards @ 0 balance use all 3 and even it out between them and never exceed 30% of the limit

That is certainly one way to do it and accomplish the same thing. However . using a car and paying it off every month DOES give you credit history .. you will get a "pays as agreed" rating every month you pay it off.

I am not saying never use the card ... you should use it once in awhile so the issuer keeps the account open. But the question was "does having a zero balance credit card help or hurt you" the answer is .. it HELPS it does now hurt as you stated in your first post.

The above being said ... NEVER EVER close an account ... That will hurt you no question.