Amex Charge Hurts Your Fico Score

Discussion in 'Credit Talk' started by JustMe, Jun 20, 2001.

  1. JustMe

    JustMe Well-Known Member

    I was told today by my banker that having a Amex " Charge" product will hurt my Fico Score. He said that he has seen consumers score drop as much as 25 points even after a year of having the product. Because it is not revolving Fico Scores it different as all being due at once. It lowers your min monthly payment scoring. I am so mad. I have to close this account. I was just approved last week.

    Has anyone score droped this much?

    Any suggestions???

    If any thing I thought my score would have gone up because Amex is so hard to get.

    Any thoughts???
  2. breeze

    breeze Well-Known Member

    LOL Your banker probably got turned down for it. ;)
    Keep the card.

  3. jonesing

    jonesing Well-Known Member

    I was wondering about this kind of thing. AMEX is hard to get, Providian cards are easier, MBNA Quantum is hard etc

    Does FICO even know anything about how hard or easy a card is to get? I mean if Citibank Visa is moderate but the AAdvantage Visa is really hard, is that considered? How would FICO even know hat type of Citi, MBNA etc card it is? The CRAs don't say Amex Platinum, Citibank regular, MBNA Titanium do they?
  4. dogman

    dogman Well-Known Member


  5. dogman

    dogman Well-Known Member

    Breeze LOL - probably didn't make the $15K ann minimum :)

    I hope my message reaches you in good spirit.
  6. Cadillac408

    Cadillac408 Well-Known Member

    You went this far to get it......why close now??? Am/Ex is the cream of the crop.

    You could just make 1 big purchase for $xxxx and then after you pay that....only use the card up to 1/3 of your high balance?????? Wouldn't this not upset your credit score??

    Anyone care to comment?
  7. Momof3

    Momof3 Well-Known Member

    . From my experience about this charge card, I can tell you this much. I just received my merged reports and even though this account is a charge, they listed it at a 15.00 payment per month according to my debt ratios.
  8. JustMe

    JustMe Well-Known Member

    My banker is the President of the Bank. Its a small home town bank, but he is the towns richest resident. He could have any card he wants. He carries the Citibank World Mastercard instead. He said it's just like AMEX Charge with no-preset spending limit. But Fico scores it different because it it a revolving credit card. This guy knows what he is talking about. I am so confused at this point.
  9. Momof3

    Momof3 Well-Known Member

    Sorry I still think he is wrong. And from my reports, he appears wrong.
  10. breeze

    breeze Well-Known Member

    My CR shows a $15 a month payment also. It is not skewing scores, silly. They know what it is.

  11. JustMe

    JustMe Well-Known Member

    Thanks Mom. I am going to keep the card anyway. I finally got approved. So what if my score goes down 20-25 points. I guess it worth it to have the card. Besides I am not looking for any new credit for at least a year.
  12. dogman

    dogman Well-Known Member


    Hey I drove down to mountain view and then realized for the first time in about 3 yrs that my air conditioner did not work.

    I could fix it and charge it , but hell, it went back to 55 in San Francisco.

    HOW R YA? :)
    Dogman has been wondering what your up to!

    I'm waiving up here to ya thru tonight's heat !!!
  13. J. Edgar

    J. Edgar Well-Known Member

    Mr. Banker has been sniffing too much new money. Having an Amex is not going to drag down your FICO score. Certainly not any more than having one more open account will drag down your score. Having an Amex and not paying the bills on time WILL most certainly drag down your FICO score.

    If one knows how to 'read' Amex account numbers, you can tell what kind of card it is from the first four digits. I used to know this piece of trivia 8 years ago, but have long since forgotten it. It's probably outdated now that they have Optima, Blue, and several other products.
  14. Momof3

    Momof3 Well-Known Member

    HI J Edgar, long time no see. I hope things are going well for you:)
  15. DaveLV

    DaveLV Well-Known Member

    The real question this thread raises for me is one I've asked here before. How would the FICO formula know the difference between AMEX and any other type of charge card? Or Blue and any other type of revolving credit card.

    I've seen nothing to make me believe it can. I have no doubt a credit-savvy person reading a credit report can tell at a glance if you have a bunch of sub-prime cards, but the scoring formula itself has no way of knowing -- other than perhaps by looking at credit limits.
  16. JustMe

    JustMe Well-Known Member

    I just got off the phone with a manager at Amex, she said that she gets calls all the time of consumers that inquire about the Fico Score going down do to charge products. She recommened that it can be a problem if your score is below 675 and if your credit profile is new between 2-7 years old. Otherwise the hit your score takes is between 15-20 points. Also depends the balance you carry each month. The higher the balance the more your score lowers the lower less the hit...

    Hope this helps....
  17. Doris K.

    Doris K. Well-Known Member

    I also believe that what the small town banker is telling you is a crock of you-know-what! I'm originally from a small town, and I currently live in one that is being swallowed up by a huge city. Those independent, small-town banks seem to try to do everything possible to avoid lending to anyone who isn't kin or friends. I'd be willing to bet that most of them don't even mess with FICO. It's just one of those cases of who you know, known as the "good ol' boy" system.
  18. G. Fisher

    G. Fisher Banned

    Yeah, right.

    She doesn't know that any more than she knows what I had for breakfast.

    Credit reports designate the American Express card as an OPEN account, not revolving.

    So, it could have a different effect than revolving accounts.
  19. JustMe

    JustMe Well-Known Member

    I called Amex credit reporting dept this morning. Spoke with Supervisor, she confirmed that "charge" products lower your score just a little but not by 15-20 points. She said it's around 7-13 points. She said that the revolving products do not have that same effect.

    Hope this helps.......
  20. tmitchell

    tmitchell Well-Known Member

    Can someone tell me the difference between a "charge" account and a "revolving" account? What makes my Target card a "charge" account instead of a "revolving" account?



Share This Page