raccah

Hello,

I am new at this and I am messing up my score - but not by bad actions as much as by rookie mistakes (i.e. OF COURSE I pay my bills, etc.)

In May I started in on this mad brave world of churning. I opened 3 chase accounts, an AA platinum, and two Citi cards (with the requisite days apart). All were approved.

I have three FICO scores for reference:

Before I started, in September of last year my FICO was 820 or so, when I opened my car loan. Then in August some time, when I got my Wells Fargo card, they sent me a note with my FICO score of 760 or so (why do othr credit companies not send me my score when I get a CC??) Then I just signed up now for MyFICO and it now 731!! I have lost 90 points on my score holy molly! I know it is not shredded, and MyFICO says three things that are not great are:

1) Amount of debt (good)
2) Length of credit history (Very Good)
3) Amount of new credit (Bad)

Hard Pulls or what they call "Inquiries that may be affecting your FICO® score":
August 29, 2013 Cbna
August 18, 2013 Cbna
May 24, 2013 Cbna
May 20, 2013 Chase Bank
May 20, 2013 Cbna
November 07, 2012 Chase Bank

They listed this as why I am not higher:

You opened a new credit account relatively recently.
You've recently been looking for credit.
You have too many credit accounts with balances.
You have too many credit cards carrying balances.

I have:

1) Two Ink Cards (may) Biz cards
2) SP (may) Personal
3) United Explorer (May) personal
4) Freedom (2001) personal
4) two personal Citi AA Cards (May)
5) 1 biz Citi AA Card (august)
6) SPG (may)
7) Amex Plat Biz (may - june)
8) Wells Fargo (August)
9) Amex personal cash card (2007)
10) Amex Fidelity card (November 2011)
11) Discover card (1991)

Anyway, clearly I amped up my cards in May through now and I am feeling the pain. Is this normal? How badly did I mess up? If I want to do another round of AOR - will I go even lower???

Thanks,
David

MDtR-Chicago

Pay all but one card to a $0 balance BEFORE the statements cut. (Utilization counts on statement date balance for most issuers.)

Leave that one account with a small balance on the statement (<2% of overall credit available) then pay it in full before the due date.

That will recover much of your lost score.

Then recognize what most people here end up accepting: 750+ is good enough. Not really much good in scoring higher than that.

(EDIT: Even myfico will tell you - they make no distinction on predicted interest rates on loans above a 760 score.)

raccah

WOW! Thanks for the help. I heard that paying off the statement is BAD because Chase gets angry, is this true? I guess what you are getting at is, that if I pay off my cards before the statement cuts, the agencies see that I am not using that much of my CL - is that correct?

Sounds great, and easily enough done, just worrying about pissing off Chase and Amex, the real only card companies I am using now. Also, when do you pay off the cards, a few days before each cards statement date (in other words how many biz days does it take to show on the record and make my credit usage look low)?

Thanks Again!

MDtR-Chicago

The only thing that seems to clearly make Chase mad is "fraudulent" point accumulation and transfer. So if you're not trying to "game the system" they don't seem to care much. They'd rather have you as a customer with a $0 balance who uses the cards than not have you at all.

You may want to spend some time on the myfico.com forums learning about how, exactly, the FICO is calculated. The particular points I quoted are the ones easy to "fix". Just keep overall utilization under 10% and make sure only one or two cards show a balance. (You don't want every card reporting $0 because then you lose points for not using your credit.)

The balance reported is whatever is on your statement for most banks. (A noteworthy exception is USBank, who reports whatever your balance is on the 1st of the month.)

So the only concern is how long it takes to process and post your payment to your account. Usually submitting the payment 2-3 days ahead of your statement date is enough time, if you do it online. I try to time it so the card that shows a balance is whichever is hardest to get the timing right - which is often whatever card is the daily spend card at the moment.

wcj

Good to see MDtR-Chicago back! I owe my barely mid-level knowledge to reading many of your posts. Thanks!

OP- you want those charges to post in time, I have never had a problem paying on the closing date listed on the card and then waiting until after the email notice saying my statement is ready before using that card again. You have others to use while you wait that 2-5 days out.

PS - been doing the payoff before statement cut date for >year with Chase and Amex and no issues.

StartinSanDiego

MDtR is our go-to guy for credit stuff.

But, just to set your mind at ease, think of your credit score as a renewable resource. You harvest and then it needs a little time to rebound. But, it will. My Fico score took a nose dive of 70 points after dabbling in this game. I was stunned!

But the same skills that got you a top notch score will help it recover, too. Pay so that you have zero balance at statement closing time, never make a late payment, etc. It will bounce back in about 2-3 months.

raccah

You guys rock!!! OK, So more work for me and my wife - paying these puppies off 3 days before statement date.

Now, why can I not use them again - right away, if I have 20 cards say, and 18 show a balance - but all are less than or at 10% of the CL (for each card) - so that all the cards are at or below 10% of CL, why is that bad?

I understand the recommendation is to pay them off and make sure they are 0 except for one or two - but the way I am using my cards - most of the 16 or so cards I have are not used at all! I really only use 4 or 5 cards and the rest lay fallow. So if I use the cards like mad and then pay off before statement date, and then keep using them - what will show on the statements are far less than 10% of all CL and far less than 10% for each card.

Is this not advised?? Thanks so much again!!!!

raccah

Finally, given that this may well be my issue - can I not be concerned about going after more cards or should I not do that yet??

Thanks!

MDtR-Chicago

This thread is certainly doing great things for my self-esteem today, so thanks for that, all......

It's a separate negative mark for overall utilization, compared to # of cards reporting a balance. (And actually, looking at the quoted message again, it sounds like your issue is # of cards with a balance, not necessarily overall utilization.)

Keep in mind, the scoring model is believed to count ALL of these things:
(1) 0 or >3(ish) cards reporting balances is bad
(2) Overall utilization on a sliding scale, with 1-10% best and >50% bad
(3) Each individual credit line's utilization, 0-10% best, >50% bad

None of these scales are apparently linear, so that as you drift from the ideal zone, the score effect is more and more strongly felt, until you lose all possible points in that bucket.

And then add on to that complexity that there are different weights for each particular item, depending on what "type" of consumer they have labeled you as, based on the overall profile of your credit history. And, on top of that, each lender can choose from several different slightly-different algorithms that may or may not yield the same numerical value as the public FICO on myfico. And which could be based on data from any of the 3 major bureaus, each of which is often slightly different. Ugh.

The best you can expect to do is to try your best, based on what the community knows thus far, and manage your own expectations.

It might make the most sense to try to work toward the ideal for a month or two, follow the score alerts as the score goes up, then when it plateaus, use your second free complete analysis from myfico to get a fresh set of "negative" narratives.

As far as continuing to apply, most people here would say to "go for it". My personal philosophy is to set a hard target for steady-state score and stop applying when I dip below it. In reality, there isn't much reason to go higher than 760, and even that is only in the case of needing a mortgage.

One exception, I suppose, is when a human will be reviewing your credit report in a competitive situation. For example, trying to rent an apartment in San Francisco. There is a certain cognitive impact to showing up with an 800 score.

(Here's a tip - if you decide you want to keep myfico, they'll usually offer you a discounted rate if you call to complain about the price.)

ddallas

raccah

OK - sounds like a plan - I will try my best to keep to zero going forward:

1) How long will it take for my score to rise back up?
2) What system do you use to track the FICO - do you use MyFICO or more of the FAKO scores?
3) thanks again!

moondog417

Your score will go up and down based on your utilization month to month. Each bank has different lag times from when the statement closes until it is reported. If you're not planing on needing new credit soon, it's not necessary to be extremely vigilant.

Stay up on your FAKO scores to get a general idea of your FICO, but they're generally only relative (up/down trends). It sounds like you already have excellent credit and the absolute FICO score isn't as important.

lacuadra

As you can tell I am fairly new to this game but have to attest my Fico score is now 795. Used to be like 750 before I started getting new credit. So it does get better as your accounts age.

moondog417

Your average age of accounts wouldn't have changed that much in a month. More likely better utilization ratios

PaulMSN

My score has been between 748 and 766 in the past year, and just recently dropped to 746 (hard credit inquiries up to 12), but I've been continually receiving CCs throughout that time. I expect that, as the oldest inquiries drop off and my credit utilization decreases because of the end of the Chase GC bonanza, it will rise again. I don't worry too much about it -- I just slack off a bit when it becomes lower.

Added: I was just approved for another CC at 746. That's 9 this year.