I hope I don't get killed over this question, but here goes

Current situation:
1. recently graduated undergrad
2. working professionally (stable)
3. do not own home or owe any money on vehicle
4. Credit score - 777
5. no debt obligations excluding student loans
6. 2 credit cards (1 rewards, 1 BofA)

My citicard is the only card I have used in the last 3 years, since my BofA cc yields no rewards. I have no late payments, and have paid my card off in full every month since day 1. Of the two cards, the BofA card may be slightly older (both approx 3 yrs), but once again, I have hardly ever used it.

Questions: it seems to be the consensus that 1-2 credit cards probably isnt going to cut it in the long run. 1) Should I bite the bullet now and apply for 2 or so more credit cards or should I delay or stagger my applications, or put it off indefinitely? 2) Should I cancel my BofA cc now or just basically...keep it for a long time since it is my oldest card?

btw, it is highly unlikely that I will need to borrow any money within the next 10 months, but after that time, there is a chance I may purchase a home. 3) Would opening two new cc accounts still look pretty bad a year from now?

LostConsumer, we draw the line at killing here...only maiming and torturing permitted. I won't go into all the possible hypotheticals, but a quick answer seems suitably on topic, as many others face similar situations. it seems to be the consensus that 1-2 credit cards probably isnt going to cut it in the long run.Cut it for what? It depends on your goals. It will be enough (or very nearly enough) to establish a tip-top score if you follow the rules in the OP.

OTOH, if you need to borrow a year from now, two new cards you opened today would have a trivial effect. I wouldn't hesitate if the offers were good, and I certainly wouldn't close the oldest ones you have now.

Thanks for the great responses guys; great thread/topic OP. Regarding my BofA cc - should I use it every now and then to keep it active? Or does level of activity have no impact (besides credit utilization)?

I just got this alert from MyFico telling me my score dropped 8 points, I figured it was from the Experian pull that was done the other day when I applied for the MBNA Quantum card. I logged on and saw it was from a balance increase on one of my cards. I usually pay off my cards before they report but missed this one. They show an increase of 1529% and I now owe $831 on a card that has a $25k Limit. Funny that they make it sound like I am maxing the card out. Will see if it goes back up if I show a zero balance next month

Alert: The balance on one of your accounts has increased by 1529%
Changes to your FICO® Score
Your FICO score decreased to 801 on July 23, 2006.

How balance increases impact your score: A balance increase on an account may lower the FICO score.

A large balance on an account, or balances on many accounts, is a sign of a consumer who may be having trouble paying back debts. Since the FICO score measures the chances a consumer will pay back a debt, larger balances or balances on more accounts can lower the score.

"Maxing out" a credit card or other line of credit is when the balance on the account comes close to the account's credit limit. This can dramatically lower the FICO score because it is often a sign of a consumer who desperately needs credit and may not be able to pay it back.

The drop in a FICO score caused by a balance increase can be reversed by paying down the balance.

astrocase said:I haven't experimented with it yet, but I've noticed that scores drop immediately when your balance increases. Do scores go back up immediately if you pay off the balances?
This is normally linked to utilization.

grrarrgh said:Readers may misunderstand your comment and think that FICO is directly affected by address age, rather rhan interpreting it to mean that many issuers' internal scoring models do use this as a factor in granting creditAre you saying that only internal scoring models look at age of address, not any of the various FICO models? I don't recall recently seeing anything on that...do you have a link or other source? I'd happily edit accordingly, thanks for bringing it to my attention...

As for chaning your address for inquiry purposes, I think that's generally a bad idea. For one thing, even if you get the change in in quiries you like (which is VERY iffy, as the geographic guides are NOT reliable), you might be left with having a couple of different addresses reporting to your file...which could cause confusion, lack of address stability in other models, etc.

DaveHanson said:grrarrgh said:Readers may misunderstand your comment and think that FICO is directly affected by address age, rather rhan interpreting it to mean that many issuers' internal scoring models do use this as a factor in granting creditAre you saying that only internal scoring models look at age of address, not any of the various FICO models? I don't recall recently seeing anything on that...do you have a link or other source? I'd happily edit accordingly, thanks for bringing it to my attention...

As for chaning your address for inquiry purposes, I think that's generally a bad idea. For one thing, even if you get the change in in quiries you like (which is VERY iffy, as the geographic guides are NOT reliable), you might be left with having a couple of different addresses reporting to your file...which could cause confusion, lack of address stability in other models, etc.

From
myfico.com
"What is not in your score:
Where you live."

technically, not inconsistent w/claim that it is how long it is that you live in a given place, vs where you live, that impacts FICO.

more strongly indicative:

From
myfico.com pdf file Understanding Your Credit

"IDENTIFYING INFORMATION.
Your name, address, Social Security number, date of birth and employment information are used to identify you. These factors are not used in credit bureau scoring."

As for the address changing, it is mostly a thought question. I'm not sorely tempted by the possibility of doing so, given the uncertain payoff re: consistently shifted inqs, vs the fairly definite (though hard to measure) payoff of address stability.

The pattern of pulls focusing on EX is somewhat personally frustrating (as alluded to before), and my thought was that if certain other addresses were to consistently pull EQ, just as certain creditors seem to pull my EX w/o fail over the last 6 years or so, that might almost be worth the longer term fallout.

If I were going to seriously contemplate this, I'd have to do more research into changed addresses reporting timing, whether consistent pulls from bureau X are due more to being in city Y, vs being a specific borrower Z. I'd also have to check if original state in which card was applied for matters, etc -- and all of these things are less than dataful. Even on that level, doesn't seem worth it.

I would make the observation that of the last 20 citibank pulls on my accounts over the last 4 years or so, all have been via TU, and a similarly high proportion (though w/fewer data points) of my chase pulls have been EX. If a reliable fatwalleter w/an address in Los Angeles were to tell me that all of his chase pulls (some largish number) were EQ pulls, say, that'd perhaps lower the barrier to my checking out this phenomenon...

off topic fyi: Similarly, I've gotten many AMEX pulls from the same NYC address: 14 of the last 15 were EQ, one was TU. This may be slightly more of a statistical fluke, vs systematic effect, if creditpulls is any guide (as opposed to the citibank effect)

scott1961 said:I just got this alert from MyFico telling me my score dropped 8 points,Scott, are you one of the lucky ones that still gets a TRUE FICO score update daily? Or is this a FAKO variation from myfico.com? I logged on and saw it was from a balance increase on one of my cards. I usually pay off my cards before they report but missed this one. They show an increase of 1529% and I now owe $831 on a card that has a $25k Limit. Funny that they make it sound like I am maxing the card out.That's only because your scores are so stratospheric to begin with...were you, say, 720 rather than 800+, I'd bet that that change would have had no measurable effect. Will see if it goes back up if I show a zero balance next monthOf course you won't have exactly the same info next month...if nothing else, your average age would be up a month. But, if nothing else changes, AND they don't tweak their model at all in the next month, then you would have a pretty good indication that this was the cause."The drop in a FICO score caused by a balance increase can be reversed by paying down the balance."

There's testimony from myfico itself addressing astrocase's question (perhaps it prompted the question..?) That was: I've noticed that scores drop immediately when your balance increases. Do scores go back up immediately if you pay off the balances? The scores do drop immediately upon the REPORTING of the balance increase, and are restored (all else equal) on the REPORTING of the reduction in balance once again. For lines that do report, reporting generally takes anywhere from 1-8 days after the cycle ends--although there are some exceptions. Also, some creditors only report every other billing cycle, or only report to some CRCs and not others (intentionally or no.)


bozo007 is correct that utilization is main culprit here.


catonis asked, What about the effects of a credit score on something like auto insurance? I have heard that this is a factor. Would an "adequate" score raise a premium over a "super-high" score?It depends on the issuer. I insure with Farmers, and both auto and home polices are dependent on credit scoring. They have a model different from FICO that codes A-Z (the name escapes me), and it does reward "super" credit with lower rates than just 700-ish scores. It isn't clear where the "super" cutoff is though. What other (non-obvious) areas, besides the auto insurance, are influenced buy FICO score? Tough to say, as companies are rarely forthcoming with this info unless disclosure laws force them to be. I'm sure that employers, dating services, etc. use some variation of credit checking in many cases. If readers would post other documented examples, I'll work them into the OP. My experience is that scott1961 is right that having a "high-pass" credit score (per the OP) is generally the key here, not an "A" score.


grrarrgh, thanks for those links. As you rightly note, they are careful to argue that "where you live" doesn't influence scoring--not how long you've lived in one place.

The reason for this is pretty simple. Scoring companies have taken a great deal of heat from some quarters for allegedly discriminatory behavior. One area of alleged discrimination is that you score depends in part on whether you live in a wealthier or poorer neighborhood.

The important thing to note here is that scoring can be CORRELLATED with such factors, without in any way being CAUSED by them. So for example, it's a statistical fact that certain minorities have lower FICO scores than whites. Why? Simply because on the average, whites have fewer derogatories on their report. (There's another debate one could have about why this is. I think the simplest answer is the most likely: whites have higher average income, and with more seniority are less likely to be laid off. For these reasons, on the average, they're less likely to have trouble paying bills on time.) But CRCs REALLLY don't like discussing this fact, or even admitting it, for rather obvious political reasons. And it's just silly to say that CRCs have models that ASSIGN credit scoring by race. It's all about the correlations. would make the observation that of the last 20 citibank pulls on my accounts over the last 4 years or so, all have been via TU, and a similarly high proportion (though w/fewer data points) of my chase pulls have been EX.That's pretty striking consistency. My experience has been quite different: the same issuers will pull different reports on different days.

It would be nice to have that inquiry/location database updated more regularly, and with other data like "date of inquiry". That might make it more reliable... I monitored it for a time, but stopped when my own experience was that it was wrong more often than right.

no premium bankcard means not enough visa/mc/AMEX.

3 is a very thin file.

5-6 is better.

app-o-rama for a oouple dozen can be even better