ok it seems the biggest problem with folks is that they tend to close accounts that have atleast 12months credit history and it lowers their score each time they do that it lowers their FICO score...Mine dropped one time by 20 pts for doing that so lesson learned for me!! My question is now should I ask my creditors to increase my credit lines on existing accounts (cards) so my credit lines are higher and it shows my total avail credit as a higher percentage than amounts owed. it seems to make sense to me, but wanted to run it buy a few "smart" folks ~ Darin
Your goal is to increase your options and improve your terms. If an account has no annual fee, there is seldom a reason to close it, unless they are "toxic" and mess up your account. Since your goal is to increase options for improved terms, it would make sense both to ask for increases on accounts where you consider the terms good, or to apply to offers with new lenders where again the terms are good relative to what you already have. Either way, you only do one or two inquiries a year so that your scores are not depressed affecting the terms of your existing accounts or new offers.
well I'm increasing my revolving credit lines (macys, dillards etc...). Some them have 0 balances, some not, but I want my credit to show that my cards are not maxed out but rather within reason for balances on open trade accounts.
Once you have accounts, you can get accounts. The next level is to get them on better terms. You probably don't want to generally use store cards, both since they are limited to that store, and since their terms are generally poor (around 22%). Once you have used them to start your credit history, it makes more sense to concentrate on more useful VISA or MC cards, both due to competition in rates, and due to the opportunity for higher credit limits to improve your scores. Other than that, and ensuring everything is paid as agreed with low balances, it is more a matter of length of credit history. Let time do the work for you.
Many store cards (Macy's, Neiman Marcus, Nordstrom, Dillards, Target) do have a more upmarket variant that you may be able to upgrade to over time, so I wouldn't rule those out.
Scores are calculated from reports, so you would not want inquiries on any report at a rate more than 1 or 2 a year. You may have no control over which report different lenders pull, and they may pull reports from several CRAs. Why would you actually need more than 1 or 2 a year, if your goal is quality of terms and size of credit limit, not quantity of individual accounts? A bunch of $500 accounts, or even $3k accounts, are not worth the trouble, and you aren't likely to be getting the lowest rates if that were all you were offered anyway. They don't help your total available credit enough to justify opening them.
Once again, Iâ??m impressed and Iâ??m surprised with your wise reply. I agree with you 100%. â?¦ What Iâ??ve seen on credit forums so far are â??road warriorsâ?, app-o-rama and competition who is going to open more accounts. Donâ??t get me wrong â?? Iâ??m not judging anyone. Not many people would agree with you â?¦
If you have high scores, large limit accounts, and good rates, you don't need another low limit overpriced account offered by a clerk at Target. (I actually have nothing against Target.) And you may actually want to make your charges on a card with a bank that is NOT associated with a merchant you are purchasing from, should you have a dispute. There is the FCBA, and then there is what people actually do.
