Keeping your credit strong.

Truly, knowing exactly how the cards effect you credit is hard to do but we do know some things.

Using credit cards younger than a year old will actually drop your credit. Seasoned cards that are older than a year will gain credit.

You will see that in a credit pull there is an income listed for you. If you have too much open debt to your income it may drop your score. This could be one, two, three or even more cards even if you have not used the credit. The credit scoring companies sees this as a risk as your income could not support your total possible debt.

Having debt that is more than 50% of your allotted amount available to you will also drop your credit. For example if you have $1000 in credit line for a credit card and are using $600 of the line your score will go down where as if you are using $500 or less your score will go up.

Makes perfect sense. As a matter of fact, we were researching with another fellow investor onto myFico's website that in fact if you carry balances on only two credit cards your score will be higher than if you would carry balances on three or more credit cards. Even if it's only a few dollars. If you have balances on three or more credit cards your score will drop automatically. We also found out that this only applies to personal credit cards. Business card balances are not reported on your Fico score. There is though one credit card company that reports onto your Fico score regardless if it's a business account.

The purpose of the card isn't a important as who applied. If the credit card application was completed with a social security number it will show up on the credit report of that individual. If it is a business card the application would have been made using the EIN number of the business and would not show up on the individual's credit report.

You are completely right.

Thank you.

... actually 3 credit card convenience checks totaling 80K. Rehabbed the house & sold for 135K. Dean mentioned us using this strategy in Chap. 12 of "Your Town". Even with this, it did not affect our FICO score of 805, in fact Chase kept sending more & more convenience checks. They did close 1 account for not using it for a certain period of time. This could have an advise affect on your score.
Remember that when applying for a loan the bank they are not only looking at Fico scores, which will dictate the interest rate you will pay on the loan but of course your loan to debt ratio that will determine if you qualify
for the loan.

is just another source of using OPM. If you abuse it or are not reponsible, you'll lose it and/or it will cost you too much to use.

Things to think about:

Credit card:
1. One offers 5k crdit line,12% interest, and 60-90 interest free.

2. Offers 5k credit line, 8% interest for 30 days.

Which one would you take?

Answer: 1 even though the interest rate is higher, the 60-90 days w/o interest allows you to use the $$$$ for that time B4 interest is charged.

Use it - don't abuse it.
If you've paid on time and
If you ever want/need to increase your credit line and reduce your interest, call the # on the back of your card AFTER 10pm.DO NOT talk to the 1st person answering the phone- ask for the MGR. This time is when corp big wheels are gone home and there is a walking floor mgr there to approve your request. Ask to increase your credit 3-4 times of current and reduce your interest.Explain that you plan to make some larger purchases and expect to increase your salary by 30-60k this yr. Even if they agree to 1/2 of what you asked for, look where that puts you. Also tell them other credit card co's have offered you better than what you now have, but you would like to stay with current cc company. Don't take no for an answer, just be nice and you'll get the YES.

I've always found it very amusing they tell you to call the ### on the back of the card if its lost or stolen.....how do you do that?

Thanks Mike! That's a great tip.

I want to see what happens when I ask for more credit like you advised in your comments above. Thanks. I'll let you know what happens.

Sharon
Hamilton, New Jersey
Mercer County