Club 800: Tips & Tricks

• 
  The following is purely my opinion based on my experience and the many, many posts here about how to get a better score.
  
  â?¢ The number of cards you have does not matter that much. What matters is mostly the total LOC and the average balance you have.
  
  â?¢ Mortgages/HELOC doesn't help your score unless they are paid off. Back in 2001 I had 10 CCs, 2 LOC, no mortgage, no HELOC, no auto loan. I had a 35% utililization, no derogs and stable 740-750 scores. I have seen here a 800 Club members with no mortgages too.
  
  â?¢ If you have no balance on an account at all, it means you don't use it. They are not happy about it, 'cause you don't bring any money to the house. Use every card you have every month - buy gas, get a pair of socks. An account is considered "active" even if you spend $1.00 a month.
  
  â?¢ Pay each card off at the end of the month. Once in a while make only the minimum payment, so they can get few dollars. Based on your average CC usage you will have a low total balance and, depending on your total LOC, a low utilization. The easiest way to calculate it is: if your average CC spending for a month is $500, you need a total LOC of at least $5,000, so at any given time you will have not more than 10% utilization.
  
  â?¢ Pay attention to the individual CC utilization - three cards with 0% balance and one with 100% balance is worst than four cards with 25% balance. A $300 Macy's card with a $150 balance gives you 50% utilization, which definitely affects your score, even if your overal utilization is good.
  
  â?¢ Do the CCB - credit card bumpage. Instead of applying for one card every few months, apply for 10 cards if you want, but do it once an year. You will get 10 hard inquiries, but after the year is gone - so are the inquiries and you are clear to do the CCB again.
  
  â?¢ One year instead of the CCB, take a look at what you have. Let say you have 10 cards with a total LOC of $20,000. Call all CCCs and ask for a CLI. Then pay off and close the cards with a lowest LOC (like the store cards). At the end you will have 5 open accounts with the same total LOC. You will also have 5 revolving accounts, paid off and closed by consumer with $0.00 balance. Accounts in good standing forever. Next year do the CCB again. If you do everything right you may end up with few cards and a total LOC of $150K - $200K.
  
  â?¢ Get a loan from your bank, put it in a CD for 6 months, then pay it off in full. You will lose few dollars because of the different APRs, but you will get a paid off installment loan. An account in good standing forever.
  
  â?¢ Get a "reserved" LOC (RLOC) from your bank. This is like a pre-approved line of credit which you can use at any time without going through the whole process of a loan approval. Citibank calls it "Ready Credit". When you get a new CC with a $5,000 LOC and 0% intro BT APR for the next 6 months, request a BT to the RLOC. The CCC will do it, because it is a credit account. Your RLOC will go $5,000 plus. Take that money and put it in a CD for 6 months. Do proper payments on the RLOC every month - you don't lose anything, the APR is 0%. At the end of the 6 months take the money off the CD, keep the interest and pay off the card. Now, during these 6 months your score could go down a little - you will have an individual utilization of 100%. But, after you pay it off, it will jump higher than it was before.
  
  â?¢ If you have a "negative cash flow", never take cash from a card more than you can pay off when the bill comes. Instead, arrange for a BT and look for the best APR offer.
  
  â?¢ Whenever you get a new card, do not get carried away. It is not your money. It is money you can use if you really, really need. Remember that the bill will come at the end of the month and you will have to pay it.
  
  
  So, my idea of the way to the 800 Club:
  
  • â?¢ At least 5 years of credit history.
    â?¢ No derogs for the last 7 years.
    â?¢ Individual and overal utilization of 10% - 20%.
    â?¢ No derogs for the last 7 years.
    â?¢ At least 5 revolving accounts.
    â?¢ No derogs for the last 7 years.
    â?¢ At least 5 accounts, paid off and closed by consumer with $0.00 balance.
    â?¢ No derogs for the last 7 years.
    â?¢ At least one paid off installment loan.
  
  
  Your comments, cheers and disagreements are welcome ...

 

• As I said, I'd do it once in a while. This will trigger their system to flag me as a "profitable" customer". For about two years I was paying everything in full the day I get the bill. During this time I was getting good offers for credit or APR once every 6 months. When I started paying just the minimum from time to time, these offers started coming every month.

 

Re: Re: Club 800: Tips & Tricks

• 1. Why would you need 30-40 open accounts?
  
  2. As I said, a $300 Macy's card with a $150 balance gives you 50% utilization, which definitely affects your score, even if your overal utilization is good.
  
  3. When applying for a new card you may get the following reasons for denial:
  - Too many active accounts
  - Number of accounts with balances
  
  4. With every open account there is a potential risk to get it reported as "paid ## days late" by mistake. With the closed accounts this will most likely not happen.
  
  5. This is not a rule, but a piece of advice. You don't want to do it - don't do it ...

 

• 
  In addition to my original post ...
  
  â?¢ Sometimes a bank can deny you a CLI, but give you a new card with a new balance. Take the new card, before activating it, call the bank and ask them to combine the two cards into the old one. This way you will still get the CLI and will lower your utilization.
  
    Note: If you have a better APR on the new card and if you plan on doing a BT, do the BT first, then combine the cards. Otherwise you may lose the good APR.