TTMA credit cards/ scores how all this works

[hedgeday]

Hi, I’m a long time lurker but I was hoping to get some advice on credit cards/credit score. I’ve been googling and researching but I’m just not financially savvy. I know there are several ladies with good budgeting/financial skills so I thought I would ask here. It’s long, so thanks in advance. Pdq just in case.

I had no credit card up until 4 years ago, which meant I had no credit history other than past rental records when I lived in apartments (all in good standing). I decided to build my credit, so I got one card through my bank and used it responsibly. I got another card with better points/etc and used that responsibly as well. Finally, I got a 3rd card that had really good rewards. Fast forward to now, I only pretty much use card #3. The other two rarely has balance, maybe here and there to keep it active but paid off immediately. The third one gets used every month and paid off in full. My credit score is in firmly “very good” range. So what’s the problem? I decided to apply for a card with mileage rewards etc that was promoted by the same company that I have card #3 with. I was shocked when I got rejected. I decided to pull up my credit reports with all 3 agencies and everything looks good. Any advice on what to do? Or who to contact to get more information? I don’t need the credit card right now so that doesn’t matter but I just want to understand what’s going on. I may also try to get a new car in 2 years so it would be helpful to get things straightened out now.

Tl Dr - rejected by credit card company’s despite other cards in good standing and good credit score. Any advice on what to do or who to contact?

Thanks again!

[sarenu]

I might be wrong with this, but credit card companies are going to look at your earnings, then at you credit lines. They do a calculation to see if you can take on more debt (They always consider you may max out your cards).

Call the credit company and see if you can switch cards. I believe this will count as a card closure on your credit report.

[frantastic]

Possibly because you have 3 accounts already open. While they're all in good standing, your already-available credit can be considered potential debt.

Keep in mind that there are still approximately one million factors that go into calculating credit-worthiness. However, I'd suggest paring down to 2 accounts.

(Source--worked for one of the big credit card companies for 5 years.)

[hedgeday]

Apr 20, 2018 13:54:34 GMT -6 sarenu said:

I might be wrong with this, but credit card companies are going to look at your earnings, then at you credit lines. They do a calculation to see if you can take on more debt (They always consider you may max out your cards).

Call the credit company and see if you can switch cards. I believe this will count as a card closure on your credit report.

I will call and ask them about switching cards. It’s weird because card #3 recently increased my limit and lowered my Apr without me asking. So I thought I was good applying since it’s the same company!

[hedgeday]

Apr 20, 2018 13:59:53 GMT -6 frantastic said:

Possibly because you have 3 accounts already open. While they're all in good standing, your already-available credit can be considered potential debt.

Keep in mind that there are still approximately one million factors that go into calculating credit-worthiness. However, I'd suggest paring down to 2 accounts.

(Source--worked for one of the big credit card companies for 5 years.)

Wouldn’t closing an acct affect negatively on my credit score? Or that doesn’t really matter in the grand scheme of things?

[Deleted]

Your credit score is going to depend on a variety of factors - what's your utilization like? On card 3, you're paying in full every month, but are you getting close to your available limit? Paying it down more frequently would help keep your utilization low.

Your credit mix is also going to factor into your score - it sounds like all your credit is short-term financing (credit cards) - do you have any auto loans or home loans? A long-term history of making payment on a non-revolving faciity will also help your credit score.

(I work in banking and review personal credit reports on a regular basis)

[Deleted]

Apr 20, 2018 14:02:04 GMT -6 hedgeday said:

Apr 20, 2018 13:59:53 GMT -6 frantastic said:

Possibly because you have 3 accounts already open. While they're all in good standing, your already-available credit can be considered potential debt.

Keep in mind that there are still approximately one million factors that go into calculating credit-worthiness. However, I'd suggest paring down to 2 accounts.

(Source--worked for one of the big credit card companies for 5 years.)

Wouldn’t closing an acct affect negatively on my credit score? Or that doesn’t really matter in the grand scheme of things?

Are you registered for CreditKarma? They have a credit stimulator that will stimulate the effect of a variety of things on your credit report. (Closing a card, carrying a balance, applying for new trade lines, paying down a line of credit, etc)

[Deleted]

Also, your rental history doesn't really affect your credit history unless you've been delinquent on payment and it was reported to the credit bureaus.

[frantastic]

Apr 20, 2018 14:02:04 GMT -6 hedgeday said:

Apr 20, 2018 13:59:53 GMT -6 frantastic said:

Possibly because you have 3 accounts already open. While they're all in good standing, your already-available credit can be considered potential debt.

Keep in mind that there are still approximately one million factors that go into calculating credit-worthiness. However, I'd suggest paring down to 2 accounts.

(Source--worked for one of the big credit card companies for 5 years.)

Wouldn’t closing an acct affect negatively on my credit score? Or that doesn’t really matter in the grand scheme of things?

It can, but having too many accounts/too much available credit can be seen as a risk to creditors and negatively affect your credit as well.  And so can the hard inquiries that take place when you apply for another line of credit, regardless of whether or not you're approved. 

Had you actually been approved for card #4, it would not surprise me at all if the limit(s) on one or more of the first three were lowered in the near future. 

[hedgeday]

Apr 20, 2018 14:05:06 GMT -6 @k3am said:

Your credit score is going to depend on a variety of factors - what's your utilization like? On card 3, you're paying in full every month, but are you getting close to your available limit? Paying it down more frequently would help keep your utilization low.

Your credit mix is also going to factor into your score - it sounds like all your credit is short-term financing (credit cards) - do you have any auto loans or home loans? A long-term history of making payment on a non-revolving faciity will also help your credit score.

(I work in banking and review personal credit reports on a regular basis)

I don’t get near the limit very often anymore - maybe 10%. For the first year or so, I had it up nearly 50% to use it more.

We do have a mortgage but my name is not on it - we bought our first house 5 years ago and they couldn’t pull any credit history on me (hence me beginning credit building journey). I’m not sure if I can get on it now or if it’s even a good idea?

[snowyowl]

While we are on the topic, can I hijack a bit because I have a similar question?

My bank account is 15 years old with BOA and is a checking, savings, and credit card. I never use the credit card anymore and I think I want to switch banks.
However, my other two cards, which I always use because they have rewards, are significantly “younger”, only about 4 and 2 years old.

I have a credit score in the “excellent” range. I know there are tons of variables, but age of accounts is one of them. If I close my bank accounts in favor of a new one and cancel that BOA card, would the hit to my score be significant?

I’m planning to buy a new car in the near-ish future.

[Deleted]

Building your credit will take time. You’ve had a good start but going from 0 to 600 (just guessing here, the OP has not offered actual numbers) will happen more quickly than going from 600 to 800.

I’d pare down to 1 card and use it for everything. Not much is gained by having more credit available than you can service. A longer the relationship with a single service provider will reflect positively on your credit bureau. Additionally, shopping or seeking credit will reflect negatively on your score. Be cautious when looking for credit.

Revolving accounts (credit cards) are only a part of they overall picture. A single instalment (fixed term) loan will help drive your score up provided you make every single payment on time.

Treat yourself right by making your payments on time, don’t shop for credit and build credit histories with creditors. Be patient, driving that score up will take time.

[goldenbird]

I've also wondered about closing accounts. I have a David's Bridal CC that I opened to buy my dress and will never use again, as well as a Visa through American Eagle. Both are five years old, used once and paid off. It seems silly to keep them open.
I have a Visa through my bank that I use sometimes, but it has had a O balance for a couple years now. I would keep that one.

[frantastic]

Apr 20, 2018 14:25:42 GMT -6 goldenbird said:

I've also wondered about closing accounts. I have a David's Bridal CC that I opened to buy my dress and will never use again, as well as a Visa through American Eagle. Both are five years old, used once and paid off. It seems silly to keep them open.
I have a Visa through my bank that I use sometimes, but it has had a O balance for a couple years now. I would keep that one.

Yes, close them. 

Credit score aside--I don't like inactive accounts just sitting open because it's one more thing that could be hacked/stolen.

[goldenbird]

Apr 20, 2018 14:29:59 GMT -6 frantastic said:

Apr 20, 2018 14:25:42 GMT -6 goldenbird said:

I've also wondered about closing accounts. I have a David's Bridal CC that I opened to buy my dress and will never use again, as well as a Visa through American Eagle. Both are five years old, used once and paid off. It seems silly to keep them open.
I have a Visa through my bank that I use sometimes, but it has had a O balance for a couple years now. I would keep that one.

Yes, close them. 

Credit score aside--I don't like inactive accounts just sitting open because it's one more thing that could be hacked/stolen.

That's one of my worries for sure.

[hedgeday]

Apr 20, 2018 14:24:13 GMT -6 @lamp said:

Building your credit will take time. You’ve had a good start but going from 0 to 600 (just guessing here, the OP has not offered actual numbers) will happen more quickly than going from 600 to 800.

I’d pare down to 1 card and use it for everything. Not much is gained by having more credit available than you can service. A longer the relationship with a single service provider will reflect positively on your credit bureau. Additionally, shopping or seeking credit will reflect negatively on your score. Be cautious when looking for credit.

Revolving accounts (credit cards) are only a part of they overall picture. A single instalment (fixed term) loan will help drive your score up provided you make every single payment on time.

Treat yourself right by making your payments on time, don’t shop for credit and build credit histories with creditors. Be patient, driving that score up will take time.

I’m not concerned about the credit score per se, it is already in very good range verging on excellent. No late payments, everything paid in full at the end of the month... I just want to make sure I’m building my credit in a way that I won’t be turned away for car loan or mortgage (if we decide to sell ours and move in the future).

[hedgeday]

Apr 20, 2018 14:15:41 GMT -6 @snow said:

I would keep your oldest card (b/c I believe one of the things that goes into your credit score is your length of maintaining accounts), and see if you can switch out the second no-perks card for the new one that you want. I have excellent credit and a reliable decent income and was declined for a card last year, and was told it was because the card company deemed I already had access to enough credit with the cards I had. It sounds like something similar is going on with you.

Okay, that makes a lot of sense. I wish I had asked here before I applied for the card. I think I will go ahead and close the second one. I don’t really need the new card - we are traveling a lot in summer so I thought I might as well use that to earn extra mileage on flights and dining out. I think I will wait a while before applying for a new one.

[potatocakes]

Apr 20, 2018 14:19:15 GMT -6 snowyowl said:

While we are on the topic, can I hijack a bit because I have a similar question?

My bank account is 15 years old with BOA and is a checking, savings, and credit card. I never use the credit card anymore and I think I want to switch banks.
However, my other two cards, which I always use because they have rewards, are significantly “younger”, only about 4 and 2 years old.

I have a credit score in the “excellent” range. I know there are tons of variables, but age of accounts is one of them. If I close my bank accounts in favor of a new one and cancel that BOA card, would the hit to my score be significant?

I’m planning to buy a new car in the near-ish future.

I had the same issue when I stopped banking with Wells Fargo a year or so ago. I closed my checking and savings, but kept my CC open, since it was my longest history (by several years) and that is pretty valuable towards my credit score. I use it just enough to keep it open, and have no connected WF accounts, and it's totally fine.

[Nymeria]

Apr 20, 2018 15:14:23 GMT -6 hedgeday said:

Apr 20, 2018 14:15:41 GMT -6 @snow said:

I would keep your oldest card (b/c I believe one of the things that goes into your credit score is your length of maintaining accounts), and see if you can switch out the second no-perks card for the new one that you want. I have excellent credit and a reliable decent income and was declined for a card last year, and was told it was because the card company deemed I already had access to enough credit with the cards I had. It sounds like something similar is going on with you.

Okay, that makes a lot of sense. I wish I had asked here before I applied for the card. I think I will go ahead and close the second one. I don’t really need the new card - we are traveling a lot in summer so I thought I might as well use that to earn extra mileage on flights and dining out. I think I will wait a while before applying for a new one.

Hard inquiries stay on your credit report for 2 years and it's good to not have too many. 2 or less is ideal per Credit Karma.

Age of accounts is also important so keeping your oldest one active is a good idea.

[AmyG]

pull a copy of your own credit report to see if the wedding dress and other retail cards show on it. If you haven't used them in years, they may have closed the card accounts on you without telling you. They do that sometimes.

Then see what they report as your credit limits on the cards and how much is used each month, and any late payments as well as history on those cards, etc.

You can't decide what to actually do until you know where you actually stand on everything.

If you pay off your credit card every month that may actually look worse than carrying a small balance but repaying on it regularly and more than the minimum payments every month. Like buying a mattress for 1000 and paying it off over 6-10 months to show you can make timely payments regularly, like a house or car payment would be.

[wasabi]

Sorry I’m no help on this, but @k3am, how do I get to that simulator on the CK app? I can’t find it

ETA: nvm I’m on the full site now

[sterling]

Apr 20, 2018 14:29:59 GMT -6 frantastic said:

Apr 20, 2018 14:25:42 GMT -6 goldenbird said:

I've also wondered about closing accounts. I have a David's Bridal CC that I opened to buy my dress and will never use again, as well as a Visa through American Eagle. Both are five years old, used once and paid off. It seems silly to keep them open.
I have a Visa through my bank that I use sometimes, but it has had a O balance for a couple years now. I would keep that one.

Yes, close them. 

Credit score aside--I don't like inactive accounts just sitting open because it's one more thing that could be hacked/stolen.

Closing accounts lowers your score, however. So I’d keep them open and monitor, personally.

[bsouls]

I don’t know why you were denied the card.

But, length of credit history and credit utilization play a large role with increasing your credit score. I was competing with my brother to get a higher score and the quickest way I increased it was to increase my credit limit on my cards. I had kept it with what I was initially approved with, since I didn’t need more. Some let you request online, but I’d be cautious if they want to do a hard inquiry since you don’t want too many of those.

You do not need to keep a running balance on credit cards. I pay mine off monthly, because I am not going to pay interest. I just use it to get the cash back.

Lots of cards and sites offer credit scores and they explain the breakdown of the score.

[Deleted]

DO NOT CLOSE YOUR ACCOUNTS

[Deleted]

Apr 20, 2018 16:34:47 GMT -6 @gentleapricot said:

DO NOT CLOSE YOUR ACCOUNTS

I agree with this in hedgeday's case. She would be losing 33.3% of her credit history by closing one trade line. 

For people with a more substantial/varied credit history, closing an account is not necessarily the end of the world. 

[Deleted]

Apr 20, 2018 16:55:37 GMT -6 @k3am said:

Apr 20, 2018 16:34:47 GMT -6 @gentleapricot said:

DO NOT CLOSE YOUR ACCOUNTS

I agree with this in hedgeday's case. She would be losing 33.3% of her credit history by closing one trade line. 

For people with a more substantial/varied credit history, closing an account is not necessarily the end of the world. 

Yes. If OP were to close her account it would drastically change her utilization and her credit score will decrease.

[cmb]

I’ve delved into this recently myself because I cannot be on our mortgage and no one can figure out the reason (1 of my 3 is significantly lower than the other 2, which disqualified me with the 720 cut off).

There isn’t one sole way to calculate a credit score, and there’s variation between each credit bureau.

TransUnion’s “magic” threshold for credit history length is 5 years. This is the average, not the longest open account. Removing my H from his mother’s account as an authorized user dropped his score over 20 points..

Check with the card issuer on the one you do use and find out when they report your balance. Some will report mid statement, showing a higher utilization than what is really true (our fidelity card does this, and it drives me batty)

I’d also pull your reports and make sure nothing is there that doesn’t belong.

[kitchen]

Apr 20, 2018 15:49:40 GMT -6 AmyG said:

pull a copy of your own credit report to see if the wedding dress and other retail cards show on it. If you haven't used them in years, they may have closed the card accounts on you without telling you. They do that sometimes.

Then see what they report as your credit limits on the cards and how much is used each month, and any late payments as well as history on those cards, etc.

You can't decide what to actually do until you know where you actually stand on everything.

If you pay off your credit card every month that may actually look worse than carrying a small balance but repaying on it regularly and more than the minimum payments every month. Like buying a mattress for 1000 and paying it off over 6-10 months to show you can make timely payments regularly, like a house or car payment would be.

Charging a big thing and paying credit card interest rates on it seems very expensive for the likely minor credit boost.  You can get the benefit of having a balance without ever paying interest by always charging something else before you pay the prior month balance.  We put every single thing on a credit card, so we always have an outstanding balance but have never had to pay interest. 

[kitchen]

Apr 20, 2018 17:59:31 GMT -6 cmb said:

I’ve delved into this recently myself because I cannot be on our mortgage and no one can figure out the reason (1 of my 3 is significantly lower than the other 2, which disqualified me with the 720 cut off).

There isn’t one sole way to calculate a credit score, and there’s variation between each credit bureau.

TransUnion’s “magic” threshold for credit history length is 5 years. This is the average, not the longest open account. Removing my H from his mother’s account as an authorized user dropped his score over 20 points..

Check with the card issuer on the one you do use and find out when they report your balance. Some will report mid statement, showing a higher utilization than what is really true (our fidelity card does this, and it drives me batty)

I’d also pull your reports and make sure nothing is there that doesn’t belong.

The fact that I had been an authorized user on my parents credit card since I was 16 was why my H wasn't on our first mortgage.  My score was WAY higher than his when we were in our early 20s and this was the only difference in our histories.  Definitely plan on doing that for my kids when they're older.

[cmb]

Apr 20, 2018 18:02:17 GMT -6 kitchen said:

Apr 20, 2018 17:59:31 GMT -6 cmb said:

I’ve delved into this recently myself because I cannot be on our mortgage and no one can figure out the reason (1 of my 3 is significantly lower than the other 2, which disqualified me with the 720 cut off).

There isn’t one sole way to calculate a credit score, and there’s variation between each credit bureau.

TransUnion’s “magic” threshold for credit history length is 5 years. This is the average, not the longest open account. Removing my H from his mother’s account as an authorized user dropped his score over 20 points..

Check with the card issuer on the one you do use and find out when they report your balance. Some will report mid statement, showing a higher utilization than what is really true (our fidelity card does this, and it drives me batty)

I’d also pull your reports and make sure nothing is there that doesn’t belong.

The fact that I had been an authorized user on my parents credit card since I was 16 was why my H wasn't on our first mortgage.  My score was WAY higher than his when we were in our early 20s and this was the only difference in our histories.  Definitely plan on doing that for my kids when they're older.

We removed him because it’s *always* caused issues. The card was initially opened before he was born so it’s always a fraud alert when we try to do anything credit related. We never remember to bring proof that it’s really him when we go do things. So frustrating.

It popped up on the mortgage application, which is why we ultimate said to just remove him- we didn’t know what the bank or card was and thought it was fraud. It wasn’t until we pulled H’s 3rd report that we put two and two together based off a security question 🤦🏼‍♀️ he hadnt used the card in so long that we forgot about it