FAQ + discussion: GETTING, KEEPING high credit / FICO scores. Glossary, data points, utilization, etc. Updated 7/23/06

airloeb said:   SuperG03 said:   motuwallet said: thank you. is there a standard time one should expect between statement closing and posting new balance to bureaus?

Honestly, it really depends on the credit issuer and the bureau. For me, Experian gets updated the fastest (usually 1-2 days after stmt cuts), EQ & TU probably a couple more days after that. Again though, it really depends on the issuer. For example, AMEX has been known to lag a ways behind in reporting. Sometimes, the balance is 2 months old! In *MOST* cases, I would say about 5-7 days after the statement date is sufficient timing for ALL 3 credit reporting agencies to have been updated.

On a side note, keep in mind, that your FICO can actually be LOWERED if ALL of your CCs are reporting a $0 balance. Again, probably not a huge point loss, but if you are applying for something, and you have the ability to pay the CC just before the statement, why not "put your best foot forward". As a rule of thumb, you want about 1-2% utilization reporting on the CC. However, don't have more than 25%-33% of your TOTAL OPEN CCs reporting a balance at all. As an example, if you have 4 OPEN CCs, then to earn the best score, have NO MORE OR LESS than 1 CC reporting a balance (which should be 1-2% utilization). If you have 8 OPEN CCs, then you could have 2-3 reporting a balance, each with no more than 1-2% utilization. Once again, this is getting VERY picky, but I know there are some instances (i.e. applying for a mortgage) where 2 FICO points can make the difference in what % int rate you get approved for, or if you get approved at all.

Hope that helps.

SuperG03

I had an AMEX which was maxed out that i just finished paying off and was planning on applying for a new card. If on creditkarma it shows my balance as having been paid off does that mean that AMEX has already reported it to the bureaus?

I believe CreditKarma uses TU for its data. So, if on CK it shows as being paid off, that means for sure on TransUnion it is updated. That doesn't guarantee it is updated on EX and EQ. Though, I will say EX usually updates first, so most likely EX & TU for sure. TU & EQ are close to each other, so it depends on how long it updated on CK to get an idea. Hope that helps.

SuperG03

muskan123 said:    I dont want to wait to apply for my CC after mortgage as Credit Karma shows that my credit score will drop by 100 points post mortgage request.

That's not going to happen on any credit score that prospective lenders would actually receive.

Do the mortgage app first, unless there is a compelling reason for the CC app now. HTH.

airloeb said:   does anyone know how long it takes after adding someone as an au for it to show up on their credit report??

Assuming they (the CC issuer) adds the AU right away, which most do, then it should show up just after the next statement date. Generally credit reports are updated by CC issuers with the most recent statement information. So, if added the AU say near the end of July, but your next statement date isn't until like August 20th, well then it will probably report a few days after that. Keep in mind that not ALL cards send AU information to the credit bureaus. Now most big CC issuers (i.e. Chase, Citi, BoA, Discover, AMEX, Capital One) WILL report AUs. Hope that helps.

SuperG03

If only we could mate SuperG03 and DaveHanson ... imagine the financial Super Genius that would result! (and we'd really have to throw in suckisstaples, too ... and just for spice, a little TripleB ... )

tajar96 said:   SuperG03 said:   airloeb said:   does anyone know how long it takes after adding someone as an au for it to show up on their credit report??

Assuming they (the CC issuer) adds the AU right away, which most do, then it should show up just after the next statement date. Generally credit reports are updated by CC issuers with the most recent statement information. So, if added the AU say near the end of July, but your next statement date isn't until like August 20th, well then it will probably report a few days after that. Keep in mind that not ALL cards send AU information to the credit bureaus. Now most big CC issuers (i.e. Chase, Citi, BoA, Discover, AMEX, Capital One) WILL report AUs. Hope that helps.

SuperG03

Is there an impact to having AUs on any card in your credit report ? I figured that since you just gave a name for the second user, it wouldn't really matter.

EDIT : I mixed up additional users versus Authorized users. I assume these are different.

Generally, "Additional Users" is the same thing as "Authorized Users", just different verbiage from different CC issuers. If a person is an AU (Authorized or Additional) then that person can benefit from the entire history of the owners card. However, the owner wouldn't see any ill effect on their report (unless of course the AU goes on a spending spree and the owner couldn't pay ). Now if you add someone as a JOINT owner, then yes, you could see an impact, because if the joint owner had something negative on his/her credit report show up, then the CC issuer may do some AA against that joint card you have. Also, keep in mind that you do not have to give an AU's social security number, etc for it to report. Many times a name is enough if they can match it up by address, dob, etc. In fact, many CC issuers don't even ask for anything but the name of whom you would like to add, and sure enough, it gets reported to the credit bureaus. Hope that helps.

SuperG03

@DaveHanson:

Dave I'd first like to say if I can that your comprehensive FAQ on the first page is absolutely fantastic. I've no idea how much work you put into that but I've been able to learn a lot from combining your lessons with a few other pages I've subscribed to, both in this forum and not.

SuperG03 said:   Generally, "Additional Users" is the same thing as "Authorized Users", just different verbiage from different CC issuers. If a person is an AU (Authorized or Additional) then that person can benefit from the entire history of the owners card. However, the owner wouldn't see any ill effect on their report (unless of course the AU goes on a spending spree and the owner couldn't pay ). Now if you add someone as a JOINT owner, then yes, you could see an impact, because if the joint owner had something negative on his/her credit report show up, then the CC issuer may do some AA against that joint card you have. Also, keep in mind that you do not have to give an AU's social security number, etc for it to report. Many times a name is enough if they can match it up by address, dob, etc. In fact, many CC issuers don't even ask for anything but the name of whom you would like to add, and sure enough, it gets reported to the credit bureaus. Hope that helps.

SuperG03

Now, after the ass-kissing, my question to whomever can answer it:

According to the post above, if I were to add an authorized user to one of my credit card accounts with a relatively low limit (3k) but 100% repayment history (36 months) and has always had a moderate utilization 20-40%.. Could that person benefit from the "entire history" of the owners card as described above?

SuperG03 makes it sound like I could add an 18 year old freshman in college to an account that's been in good standing for 10 years and instantly give said 18 year old impecible credit history. So, the same effect, if my parents were severely upside-down on many ventures and have terrible credit (500-600 FICO) I could, at least, help them a BIT by adding one of them to my account?

On the same thought, is there any way this could adversely effect me? My dad wouldn't be getting the physical card, just the benefit of having an account in good standing.

Thanks in advance team.

Rajin said:   Here's your adverse consequence: if you add someone as an authorized user, they can call up and get a replacement card sent to them, run up charges, and leave you with the bill.

Luckily in this scenario we're talking about my parents who don't even understand why I want to help them and put my own score in jeopardy. The aforementioned quote isn't a plausible scenario. Guaranteed.

brandle said:   I'm interested in opening a few new credit cards to boost my available credit, but am worried that the new lines will significantly lower my score due to their influence on the average age of accounts. I've got a 9 year old (closed) and 3 year old line (open) now. My score is 778. I would go ahead and pull the trigger, but I'm worried because, starting february, I'm going to be unemployed for at least a couple of months and will be moving to Seattle where I will be looking for a job and a new place. I assume my credit score will be passing to lease whatever place I want and get a new job?

I would first start off by asking why are you trying to boost your available credit and how many is a "few"? As far as answering your initial question, yes you will see a lower score initially due to the new accounts, hard inqs, and average age being lowered. How much is very difficult to figure, since every report is different, and there are so many variable included. However, your score will gradually increase back as the accounts age, the inq stop impacting, and you show positive payment history on the new CCs. Regardless, with a 778 currently, I don't see a scenario in which applying for a couple of cards would cause your score to drop so much so that you can't get approved for a lease or a new job.

SuperG03

Apologies for not checking this thread in some time:

Big thank you to SuperG03 for taking the time to offer good guidence to BradisBrad, brandle, and others. FWIW, I don't disagree with a word SuperG03 has said to you folks...or any other of his or her statements that I can recall.

BradisBrad and max, thank you for the kind words! I'm glad this thread has been helpful, and am grateful to everyone who's taken the time to make it a valuable resource.

I think Credit Karma is out of whack when it comes to utilization. Since I have a little over $500k in available credit it's tough for me to keep 1% or over and usual shows as 0% even though I owe around $4k each month so I get a C in that . Must not have a big effect on score though since my overall grade is still an A and score 808. Did some big charges last month and my balance is about $11k now so showing 2% utilization and an A but my score did not change? on the other hand my Vantage score dropped 18 points because of it?

goku2 said:   Is your fico score negatively impacted if your utilization drops from 1% (1-20% is suppose to be 'ideal range') down to 0% utilization? I know some credit scoring methods would have this to be the case such as with Credit Karma but I'm wondering if this also applies to Fair Isaac.Alas, the answer is, "it depends."

All else equal, it is good to show 0-10% utilization on a couple of cards. I've never seen scores jump with utilization of more than about 6 at once, however. While credit scoring methods will differ in how they account for this variable, I've observed that behavior consistently. HTH.

goku2 said:   I saw my scores drop dramatically on some scoring models when I prepaid my balances on all of my cards this month with absolutely no other changes to my credit report.While the drop should not be "dramatic" on any of your true FICO scores, it's very plausible that they'd drop somewhat when you had them ALL showing 0% utilization. As I said above, showing utilization on a couple of them will be a net positive, generally speaking.

we'll see if doing 2 out of 4 cards makes a difference in that regard.My guess is that this will give you a modest boost, and leave you very slightly better off than if you were utilizing all four.

I show several revolving lines being utilized every month, with additional cards dropping my scores slightly. For this reason, if I've any reason to watch my scores in a particular month, I tend to pay off a few of my cards before the statement closes so that they will show no utilization.

Bump.

I have a question about FICO scoring that I thought would be better asking here than opening a new thread:

A few months ago I've opened two new credit card accounts to cash in on bonus promotions. Today, when I ran the 3-in-1 credit check by Equifax, I see that my FICO score is negatively affected by "You've opened credit cards recently". In addition, the average age of my open accounts is now lower. Would closing those two recent accounts improve my credit score? I have three more CC accounts that are >5 years old that I plan to keep as-is, and I always pay them off every month so regardless of these recent accounts my debt-to-credit ratio is still very low. Thank you!

A brokerage firm performed a hard inquiry on my 2-year old, active account. Their T&C do not permit this and I spoke with a rep (name and date/time recorded) who confirmed that I could dispute the inquiry as they should not have performed a hard inquiry. Disputed with EQ and got the standard "matter of record" BS. What's the best course of action or recourse at this point?

I am a little surprised with Chase. I did cancel 2 credit cards over the last 6 month (got them for mileage bonuses) and both time was able to consolidate their credit limit into another card. I have now 2 cards with them 1 with 25k and the other one with a whopping 60+k credit limit because the other 2 cards eventually consolidated into this one (40k added today with the closing of a card).
Anybody else has a similar experience with Chase and should I eventually be worried they will do something about it ? My wife has another 3 cards with a total of 60k (they just gave her a new one late last week with 30k limit). Their total exposure to me did not change though and our household income can easily support those lines.

jarhed said:   As far as authorized users on a credit card goes, If they are on my CC it shows up on their credit report.Yes, generally. Some issuers don't report to AUs, while others (most IME) do.
If I were to remove them as an authorized user, would the account be removed from their report? Sometimes, but often this would require the AU to dispute the account as "not my account."
Would it allow a lender to disregard the account when computing their ratio if they were applying for a mortgage?Depends on the lender. Many lenders consider anything and everything on the report so that they don't have to invest the resources to ferret out real obligations from phantom ones. So it's good practice to not be an AU on accounts with large balances, especially if your DTI (debt-to-income) ratios might be at issue (as with a mortgage application).

DaveHanson said:   GermanExpat, your question, while an excellent one, is OT as it isn't about credit scoring. I will say briefly that others (myself included) have indeed had similar experiences with Chase, and IME that kind of consolidation hasn't been a reason for AA--at least not by itself. FWIW.
Thanks a lot for your reply. I did not ask about credit scoring but a potential financial review or closing of the cards had me a little concerned and therefore I would rather avoid it and if needed even voluntarily lower the credit lines.

So just to clarify, you should only have a balance post on 25-33% of your credit cards (i.e. 1 in 4 cards) and the amount should be 1-2% of the credit limit of that card?