Seeking CC help/suggestions - Specific conditions

Seeking CC help/suggestions - Specific conditions
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#41

If your credit score is already excellent, it will probably make no difference to get a few points higher. Lenders work off a range, not point by point. If you’re at 750 or higher it’s probably just as good as 850.


#42

Pay off your cards before the statement date (not the due date) and zero or near zero balances will show on your credit report. Every card I have reports the balance on the statement date.


#43

Also if you start taking close to your max credit line month after month they will automatically bump up your line. They want as much of your spending as they can get


#44

Based on above posts from Argyll, I followed up. I can now confirm Argyll is right.

Thank you, Argyll.

This outcome is not great for me personally, but it saves me a small amount of money that I know this. No sense paying in advance with no benefit. As Argyll posted, and as I now have confirmed with my various CC providers, the banks are only reporting our CC balances when statements are cut . . . just once a month. This sucks, but it is what it is.

My only chance to lower my utilization is by paying off my Alliant card. That statement closes at the end of this week. My other cards’ statements do not close until we are into the month of May, and I want to apply for the Discover card before that.


#45

You’re on top of your balances though, so you could use it to your advantage (unfortunately not this month, but in the future).


#46

I’m missing something in this comment. Are you saying to pay off your credit card before they even cut the statement? As in pre-pay? Thanks for any clarification.


#47

Yes.


#48

Argyll’s on point that pre-paying the balance before the statement is issued will cause the creditor to report $0 owed on the card. This is a benefit especially if you have higher utilization on a card (50% minor ding, 80%+ major ding) that would drop your credit score a few points. Also of note is your total utilization across all lines vs your total credit limits across all lines. Always wise to keep this reporting well under 50%.

Paying off your balances to show a lower utilization might help if you have your application manually reviewed. As you mentioned, shinobi, creditors don’t usually distinguish reported utilization for ‘gamers’ vs spendthrifts who carry balances and are higher risk. I’m also under the belief that your current balance with an issuer may have some effect on your application too. For example, having lots of outstanding utilization on your AMEX cards and applying for another AMEX card may have a negative effect on getting a higher credit line for a new AMEX card application, but they look much more closely at how much credit they personally (AMEX in this example) have with you.

Since you do not have a Discover card currently, it may not make much of a difference to pre-pay your balances before the statement date cuts on your other cards. However, it couldn’t hurt. It’s worth noting too that Discover traditionally offers much lower credit lines than other issuers (Citi, AMEX, Chase) so don’t get your hopes up too much. They are more in line with Barclay credit limits.


#49

Thanks, Corndogg. I agree with your thinking. I am, indeed, in the mode here of doing the best I can. The steps I’m taking might, in the end, do me no good. But, as you observe, they will not hurt, either.

In the end I will have taken my best shot. It’s all I can do.

Also, thanks to Argyll’s help and assists from others here as well, I have learned a lot in this process. Given my prep, plan next week is to apply for two credit cards (virtually) simultaneously. It will be the Discover miles card and the Citi DoubleCash card. Both fulfill the need I outlined in the OP. With any luck, between the two cards, I will obtain enough credit to make everything worthwhile.


#50

Argyll suggests this as a way the cardholder can make his utilization look better.

As Argyll pointed out, the credit card issuer (in effect) takes a “snapshot” of your status (i.e., how much you owe on your card) and sends that information to the credit agencies. This happens one time each month, in most instances when your statement is cut. The only way to lower your (apparent) utilization is to, again as Argyll suggested, pay everything off before that “snapshot” is taken.

Payments made subsequent to your statement being cut do not help because the CC issuers do not submit interim results to the credit reporting agencies. So if you’re trying to make a good impression on a prospective new CC issuer, if you’re trying to lead them to believe your utilization is low and you really do not need credit, then you pay in advance of your statement date. That way the report sent to the credit reporting agency shows a big fat goose egg as your balance for that month.


#51

shinobi, I received my Discover cc today. It came in a very official box, unlike cc that come in a plain envelope. I am now logged in to follow my charges.

As I previously posted, for years I only used my Citi business card. I decided I needed a Visa card, so I went to Alliant thinking I would get a high credit limit since I have been with Alliant for over 15 years. Wrong!! Alliant was hesitant to even give me a cc because I had no credit or decent FICO score. Finally Alliant issued a card, but with a low credit limit. I have worked on maintaining a low utilization rate with Alliant cc.

So my FICO score is rising & Discover gave me a higher credit limit. Yesterday I applied for the Citi Double Cash card. Accepted & they even gave me a higher credit limit than Alliant or Discover. So I can see the trick is, keep a low utilization rate.


#52

Keep in mind that credit issuers use your credit score AND other things to determine if, or how much, credit to offer you.

Credit scores include a component of utilization. Credit ISSUERS may ALSO use utilization in their decision beyond the impact in your credit score. Some issuers use utilization to a larger degree than others.

Income is another component that the credit ISSUERS use. Income is not used in determining your credit score.

Back in the day, deposit account balance was used by some issuers to help determine credit limits. A few CUs could be tricked by making a big deposit (say, $10K), waiting a month and then applying for a CC. I’m not sure if this is still true or not.

The old FWF credit scores / high limit threads had a wealth of info on gaming the system to get higher limits.

And… it was heaps a lot easier to get the higher limits pre-2008 crash!


#53

This has been a key component of my current strategy. I sought to reduce my utilization significantly in preparation for my applications coming up soon. However, I will confess to some uncertainty and confusion:

It seems possible to me there are two ways to look at this, each way being at cross purposes with the other. Either

  1. The CC issuers are rewarding lower utilization on the theory that they prefer and find safer lending to persons who “do not really need the money”

or

  1. The CC issuers are put off by lower utilization on the theory that they make more money by issuing to persons who borrow a lot on their credit cards and, they hope, carry a balance.

My own approach has been one of giving credence to #1 and sort of ignoring #2.

But I really do not know if this approach is right or smart.


#54

I think your #1 is more likely.

There may also be a component related to already having large credit lines. So the more you get, the more you get.

You can also seek out some issuers that have a tendency to provide larger lines. NASA FCU, for instance, granted a lot of $30K lines back in the day. Not sure if that is still the case. Navy was another that was fairly easy to get to $25K. I’m sure there are others.

The silver bullet: Go back in time and apply for MBNA!


#55

Bumping because a new best offer for the IT Miles just dropped:

$75 statement credit + 3% first year on the Discover IT Miles


#56

Update

I have not yet applied for the two new credit cards, Discover miles and DC. This is because only belatedly did I realize the magnitude of the haircut I had inflicted on my credit score when I borrowed so much money prior. They obviously think I needed the money. I lost between fifty and seventy points on my score.

In accord with Argyll’s guidance I am paying back the money forthwith, which is certainly not a problem. But I have to await statement closures, and one in particular, before the good news will be reported back to the credit reporting agencies. Once they perceive only the most minimal borrowing I hope my credit score is restored forthwith. That will be the time to apply for my new credit cards. We shall see how it all turns out.


#57

Are you using Credit Karma?


#58

Not using CK, Argyll. I have access to a variety of other sources for free credit scores, both FICO and Vantage, through credit cards I hold and also through financial institution associations.

Not a complaint, but I was totally unaware when I did the OP here what I was up against. Was completely unprepared to be applying for new credit then. Not an excuse exactly but the demand placed upon me, as outlined in the OP, came totally out of left field. There was no advance warning. So it is taking me a while to follow your counsel and recover my high credit score (I hope), after which I’ll be in a position to proceed with business.

This has been an interesting and instructive experience overall . . . . sort of an orientation actually, for a dummy seeking to learn the ropes. I’ll be a lot more confident and happy if my efforts succeed in resuscitating my credit score. Time will tell.


#59

Credit Karma updates weekly; most free sources update monthly or quarterly.


#60

I think you’re over-analyzing things. If you have high income and a decent (700+) score you’re not going to get more credit with a 800 score, but you would if you made another $50k a year.