Thread: Credit Rating/Credit Cards

I can´t help sorry. In the same subject, do you know if there is some kind of prepaid credit card for international use?

Switching won't matter, my brother is a financial advisor and he used to switche his balance all the time to cards that have lower introductory rates. I think he did that like every 6 months or year.

Originally Posted by Vieope

I can´t help sorry. In the same subject, do you know if there is some kind of prepaid credit card for international use?

Yes, it is called the Five Finger Discount Platinum Express. It isn't good for long, so spend fast.

Actually yes, this could negatively effect your credit score. The score is determined by many things some of which are unknown, but frequency of hits and credit availability to debt ratio is a huge factor. Lowering your available credit could lower your score.

Originally Posted by Dale Mabry

Switching won't matter, my brother is a financial advisor and he used to switche his balance all the time to cards that have lower introductory rates. I think he did that like every 6 months or year.

Thanks DM. I keep getting card offers with great introductory offers. The one I am going to apply for has 0% APR on purchases and balance transfers with no transfer fees for 15 months. That should hold me over until the next card comes along. I just don't know if I should dump the cards that I don't even use.

Originally Posted by largepkg

Actually yes, this could negatively effect your credit score. The score is determined by many things some of which are unknown, but frequency of hits and credit availability to debt ratio is a huge factor. Lowering your available credit could lower your score.

But keeping this high credit limit could hurt my chances of getting a new card with much better terms, right? They could deny me because I already have a stack of credit cards--even though I don't use most of them at all.

Originally Posted by largepkg

Lowering your available credit could lower your score.

Are you sure? I thought it was the other way around.

Originally Posted by PirateFromHell

I have about 5 or 6 credit cards with a total credit limit way higher than I need. I am considering getting rid of about 4 of them and getting one more better one. Does anyone know how this effects my credit rating? Is it better to keep as high of a total credit limit as possible, even if you don't spend nearly close to your limit? Does it look bad to keep getting new cards and dumping old ones? Any insight is appreciated.

having too much credit can definetly have a negative effect on your credit score. what you want to do is keep 2 of the cards that you have had the longest and keep the balance on them to 25% of the limit or less. when you have a lot of credit cards it lowers your score because you have the "potential" to get yourself in a lot of debt. a lot of activity on credit cards can also have a negative effect on your credit score....

Like I said the formula used is unknown. The fact you have to much available credit could certainly hurt you given it's a substantial amount. There's a formula they use to determine this as well. I believe it's based on income to available credit.

There will be an initial shock to your score if you reduce your available credit. However, in the long run it may be a positive. If you're not going to be making any large purchases in the next year or so this would not matter to you and will more than likely be beneficial.

Reducing your debt if any will have the most impact on your score. If you're just flipping balances and adding more available credit this will hurt you.

Yes, the more credit available to you the less likely a company will extend more.

Originally Posted by LAM

having too much credit can definetly have a negative effect on your credit score. what you want to do is keep 2 of the cards that you have had the longest and keep the balance on them to 25% of the limit or less. when you have a lot of credit cards it lowers your score because you have the "potential" to get yourself in a lot of debt. a lot of activity on credit cards can also have a negative effect on your credit score....

Well said!

Originally Posted by largepkg

Well said!

I'm an ex- mortgage broker (soon to be again) and a loan officer...I used to spend 35% of my time fixing peoples credit to qualify them for loans...fixing your credit score is easier than a lot of people think, but just like getting rid of a hangover it takes time...lol

Great, that answers my questions then. Since I just got this offer, I suppose it was made based on my current credit score. I will get the new card, then dump the cards I don't use. Then I will be set for the next 15 months (assuming I don't get denied). Unfortunately, the cards I don't use are the oldest. I can't imagine why these companies issue me so much credit. I am a full-time student taking out maximum financial aid loans with no income. I never default on payments and always pay in full before interest occurs, though--thanks to my school loans.

Originally Posted by PirateFromHell

Great, that answers my questions then. Since I just got this offer, I suppose it was made based on my current credit score. I will get the new card, then dump the cards I don't use. Then I will be set for the next 15 months (assuming I don't get denied). Unfortunately, the cards I don't use are the oldest. I can't imagine why these companies issue me so much credit. I am a full-time student taking out maximum financial aid loans with no income. I never default on payments and always pay in full before interest occurs, though--thanks to my school loans.

for future reference...making payments actually increases your credit score vs paying off the balance in full. credit card company's don't make any money off those who pay no interest..

Originally Posted by LAM

for future reference...making payments actually increases your credit score vs paying off the balance in full. credit card company's don't make any money off those who pay no interest..

I have to disagree with you on this LAM. I will agree that for the young people establishing credit that a solid history of payments will increase the score.

For those of us that have many established loans ie. mortgage, and auto there is no benefit in keeping a balance on your cards even a low one. Your payment history is well established by these reoccurring lines.

Also, the credit companies profit margin has no effect on your score. If they make nothing on you via interest this still has no ill effect.

you are not disagreeing with me...I know how the system works, people who make minimum payments get a better score with CC companies...I'm just a messenger

I've helped people go from a 500 to 700+ in 6 months...

Originally Posted by LAM

I've helped people go from a 500 to 700+ in 6 months...

help?

These people you're referring to already are in a hole. Anyone with a score in the 500's had issues to get them there. Those people would certainly benefit from establishing a solid payment history again.

Originally Posted by largepkg

Lowering your available credit could lower your score.

Lowering your available credit, DOES NOT lower your beacon. It lowers your available credit. The more "credit" you have outstanding....the higher the limit you'll have.....Of course this all depends on in and out-going income and expenses......

Originally Posted by PirateFromHell

I can't imagine why these companies issue me so much credit. I am a full-time student taking out maximum financial aid loans with no income.

because you are a good risk statistically and they want you to rack up a lot of debt with them. statistics show that once your graduate you will get a good job and pay them back and they make a lot of money in interest.

Originally Posted by largepkg

These people you're referring to already are in a hole. Anyone with a score in the 500's had issues to get them there. Those people would certainly benefit from establishing a solid payment history again.

exactly...but having no credit or not enough credit history is also less attractive to lendors and creditors than a person who had good credit and is now in a bad credit situation...

another thing that people don't realize is the amount of the average daily balance in your bank accounts...those with higher balances are a safer credit risk than those with low balances...

Originally Posted by LAM

for future reference...making payments actually increases your credit score vs paying off the balance in full. credit card company's don't make any money off those who pay no interest..

This is partially correct. ;

Making payments "on time" increases your beacon score. Making payments late (after grace period) this will tear your beacon all the heck.


Paying your loans off before term will not increase nor hurt your beacon. Keeping your loan until the end of term will increase your score, while increasing your credibility with that particular financial institute.

Originally Posted by LAM

another thing that people don't realize is the amount of the average daily balance in your bank accounts...those with higher balances are a safer credit risk than those with low balances...

This makes sense

Originally Posted by BabsieGirl

Lowering your available credit, DOES NOT lower your beacon. It lowers your available credit. The more "credit" you have outstanding....the higher the limit you'll have.....Of course this all depends on in and out-going income and expenses......

Lowering your available credit WILL have a negative effect on your beacon. This may be a short term effect but negative none the less. To much credit scares lenders. Using the terms "to much" is obviously subjective.

Originally Posted by largepkg

Lowering your available credit WILL have a negative effect on your beacon. This may be a short term effect but negative none the less. To much credit scares lenders. Using the terms "to much" is obviously subjective.

I'm not going to argue with you. It doesn't lower your beacon........

Call an underwriter and get their opinion. I use to be one...smarty pants

BTW Large - luv the username

Originally Posted by LAM

I'm an ex- mortgage broker (soon to be again) and a loan officer...I used to spend 35% of my time fixing peoples credit to qualify them for loans...fixing your credit score is easier than a lot of people think, but just like getting rid of a hangover it takes time...lol

I am very good at getting rid of a hangoveer, my credit is ridiculously horrible.

Even the underwriters can't tell you exactly how the score system works. They can tell you that one of the biggest factors is the debt/credit ratio. Lower credit equals lower ratio which can effect the score.

Originally Posted by BabsieGirl

BTW Large - luv the username

Thank You!

I used to be a VERY large boy!

How did you lose the weight?