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Thread: Credit question

  1. #1
    Veteran Member Bellona's Avatar
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    Credit question

    I am slowly trying to build up my credit score. I used to have a prepaid credit building card but cut it off when my bank offered me a normal credit card.
    Then i got approved for a Ikea credit card , racked it up a couple of times and paid it off.
    So now I'm wondering if it is better for me to keep it open and use it once in awhile or should I cut it off? I don't need it anymore and have only been keeping it open because I thought it might be bad for my credit score to close it.

  2. #2
    God/dess Deogol's Avatar
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    Default Re: Credit question

    It is bad for your credit score to close it. The age of your accounts are taken into consideration.

    It is good to have available unused credit in your circumstances. There is such a thing as to much credit but I don't think you are in that position yet.

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    Default Re: Credit question

    *** comment removed for lack of economic content ***
    Last edited by Melonie; 07-30-2008 at 02:15 PM.

  4. #4
    AudreyLeigh
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    Default Re: Credit question

    Quote Originally Posted by Deogol View Post
    It is bad for your credit score to close it. The age of your accounts are taken into consideration.

    It is good to have available unused credit in your circumstances. There is such a thing as to much credit but I don't think you are in that position yet.
    No such thing as too much credit. Theres a few people on CB that have over $200K of available credit and scores in the upper 700s. Available credit = low utilization.

    Do not close any cards. You need those cards to get more cards. You need a mix of credit (cc, retail, installment). You want to keep your utilization low (preferably under 10%) Higher limits beget higher limits. What are your FICO scores (the ones from MyFico.com, not the ones from a credit report)?

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    Featured Member Hello_Kitty27's Avatar
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    Default Re: Credit question

    Agreed, agreed, agreed. Definitely do not close the card. Several years ago, I closed my Carsons and Sears cards, and b/c they were my very first cards, it made a negative impact b/c it shortened my credit history. Granted, it wasn't a HUGE impact, but an impact, none-the-less.






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    God/dess anomar's Avatar
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    Default Re: Credit question

    Yes, just keep them and keep them off limits to yourself, but keep the credit available to you on-record. I have my CCs duct-taped together with hello kitty tape and put in the same paperwork box as my bank statements, etc.

    Only $175 to go!

  7. #7
    AudreyLeigh
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    Default Re: Credit question

    Quote Originally Posted by anomar View Post
    Yes, just keep them and keep them off limits to yourself, but keep the credit available to you on-record. I have my CCs duct-taped together with hello kitty tape and put in the same paperwork box as my bank statements, etc.

    Only $175 to go!
    How cute! Mine are in a rubberband... maybe I should go buy some hot pink duct tape. Ive always wanted an excuse to buy some....


    And congrats on almost being out of debt!!! Funny thing is - FICO wants to see 3% of utility being used at all times for highest score SO.... if your credit cards all together are $10,000 you should use, let report and pay in full $300 per month so you will have 3% utility reporting to the CRAs but you will still have no debt since you pay in full each month.

  8. #8
    God/dess Deogol's Avatar
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    Default Re: Credit question

    Quote Originally Posted by AudreyLeigh View Post
    No such thing as too much credit. Theres a few people on CB that have over $200K of available credit and scores in the upper 700s. Available credit = low utilization.

    Do not close any cards. You need those cards to get more cards. You need a mix of credit (cc, retail, installment). You want to keep your utilization low (preferably under 10%) Higher limits beget higher limits. What are your FICO scores (the ones from MyFico.com, not the ones from a credit report)?
    If one has to much credit to income that can support it, one might be denied/face higher interest rates on credit for something that one really would need - like a house or a car.

  9. #9
    God/dess anomar's Avatar
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    Default Re: Credit question

    Quote Originally Posted by Deogol View Post
    If one has to much credit to income that can support it, one might be denied/face higher interest rates on credit for something that one really would need - like a house or a car.
    What does that mean? Like if I wanted to qualify for a mortgage, I could potentially have so much open credit that I could be denied a mortgage b/c I could theoretically pop it on a bunch of CCs?

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    Banned Melonie's Avatar
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    Default Re: Credit question

    ^^^ yes that's exactly the point. To bank credit committees, there is really no difference between having $6,500 worth of available credit on a CC account versus having spent the $6,500 by maxing out the card. In both cases, the bank credit committee is now required by regulators to evaluate the 'worst case' scenario ... which in this example would be the possibility that the day after your mortgage was approved you would max out your credit card !

  11. #11
    AudreyLeigh
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    Default Re: Credit question

    Quote Originally Posted by Deogol View Post
    If one has to much credit to income that can support it, one might be denied/face higher interest rates on credit for something that one really would need - like a house or a car.
    Yes. That I understand.

    My point was $200k of avail credit to someone who makes $200k+ isn't too much available credit.

    Now, if someone has $200k of available credit and make $30k a year - you will most likely have a problem financing a car or house.

    BUT - if you have that much available credit and good interest rates on your cards- you'd probably just charge the car or do a balance transfer into your checking account and use that to buy and get a good interest rate. Seen that done on the other boards. Then use a BT to cover that B/T and you have a 0% car loan for 12 months. If you keep piggybacking you can eventually pay off the car and pay not one dime of interest on it.

    Of course you better know ALL the terms on your cards, etc. Sometimes BTs cost 3% with a max of $100-150 or whatever the terms are. Make sure it makes sense.

    For a house - well, haven't heard of anyone charging one of those so you'd better have the income to back your available credit.

  12. #12
    Banned Melonie's Avatar
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    Default Re: Credit question

    ^^^ but I have seen a guy buy a brand new Lexus LS on his 'Black' AMEX Card !!! Of course he was a 'hedgie' and probably paid the entire balance off when the bill arrived.

  13. #13
    AudreyLeigh
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    Default Re: Credit question

    Quote Originally Posted by Melonie View Post
    ^^^ but I have seen a guy buy a brand new Lexus LS on his 'Black' AMEX Card !!! Of course he was a 'hedgie' and probably paid the entire balance off when the bill arrived.
    Aren't AMEX (except the blue card) Charge Cards so they have to be paid off every month? No roll overs? Wish I could get a centennial card. keep on dream

  14. #14
    God/dess Deogol's Avatar
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    Default Re: Credit question

    Quote Originally Posted by AudreyLeigh View Post
    Aren't AMEX (except the blue card) Charge Cards so they have to be paid off every month? No roll overs? Wish I could get a centennial card. keep on dream
    They have a couple of blue cards. Those are credit cards.

    The others, Green, Gold, Titanium, Centurion - are charge cards. Gots to pay them off monthly.

    Yea man, don't mix up an AMEX credit card with an AMEX charge card or there might be a hell of a surprise waiting at the end of the month! LOL

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