How gettint 3 new credit cards affected my FICO and VantageScore
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  1. #1
    Registered User CPA-Kim's Avatar
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    Default How gettint 3 new credit cards affected my FICO and VantageScore

    I applied for the highest rated, no annual fee, more cash back cards in November, December, and January. Each card had an introductory incentive if you buy $500 during the first three months, you will get $100 back. All three of them worked and I got my bonus money of $300. Each card was paid in full every month.

    Prior to my getting the first card, my FICO score was 830 and my VantageScore was 815. At the end of the experiment, my FICO score dropped to 820 and my VantageScore dropped to 810. Another interesting thing was I didn't request a specific dollar amount of credit from any of the three cards. The amount I got ranged from $9,500 to $25,000.

    I also called my insurance agent and found that they are still using FICO scores. She also said she is starting to see significant premium discounts for people with FICO scores above 760, especially on car insurance.

    I called a friend who is a loan officer at a local bank. He said they are running credit checks on all new employees, no exceptions. I asked him if there was a cutoff and he said there wasn't a hard number but it was a case-by-case decision.

    Just an FYI.
    Kim
    The Lord will provide

  2. #2
    Super Moderator josantoro's Avatar
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    love those cash back bonuses! My credit score is over 800 but I don't really care. Not gonna buy a house soon.

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    Credit Scores are becoming more and more popular as a way to weed people out of different things. It's one of the things I would be worried about if I was one of the types that pay for everything in cash, although I imagine no to little credit history is better than a poor credit history.

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    Registered User bumplett's Avatar
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    Just my opinion, but I think it's a horrible idea to weed people out based on a number.
    There are so many reasons that people have a low score that may not be of their own choosing.
    There's a vast difference in the family that files bankruptcy due to credit card debt vs. the family that files due to medical expenses - kwim?
    Or the newly divorced single parent that, try as they might, can't make the mortgage payment on time -

    My brother has a horrible credit score due to poor decisions in his youth, and now pays cash for everything, but was turned down a decent job despite experience, etc.

    so, I get it on one hand, but don't on another -

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    Registered User khaski's Avatar
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    Suze Orman mentioned a snippet about part of your credit score turning into something using revolving credit, as in, they're starting to prefer, and reward, those who use their cards and pay it off in full each month rather than pay the minimum. I don't see how that could be beneficial to them, to not get the interest, but that was her little mention. It was on this past week, or the week before's show. I'm keeping my ears open for more info on it...anyone know anything?

    I've never played the balance transfer game, nor have I opened cards to get rewards or cash. It just feels like it would be a big headache for me, in my shoes, but I'm glad it worked out for you. And yes, better credit scores are seeing big insurance discounts. I switched insurance companies last year when I found the same coverage for half price elsewhere.

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    Registered User CPA-Kim's Avatar
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    Quote Originally Posted by khaski View Post
    Suze Orman mentioned a snippet about part of your credit score turning into something using revolving credit, as in, they're starting to prefer, and reward, those who use their cards and pay it off in full each month rather than pay the minimum. I don't see how that could be beneficial to them, to not get the interest, but that was her little mention. It was on this past week, or the week before's show. I'm keeping my ears open for more info on it...anyone know anything?

    I've never played the balance transfer game, nor have I opened cards to get rewards or cash. It just feels like it would be a big headache for me, in my shoes, but I'm glad it worked out for you. And yes, better credit scores are seeing big insurance discounts. I switched insurance companies last year when I found the same coverage for half price elsewhere.
    Your credit score does benefit from paying off your balances each month because your debt to credit line ratio is lower and that makes your FICO score higher (it's one of the measures they use.) That's why your score might go down if you close out cards you no longer use. As far as the card issuers are concerned, creditworthy customers who make minimum payments are their bread and butter. They know they'll eat a certain amount of credit they extend but they have very accurate formulas to make sure they make plenty of money and, unfortunately, they make it off the hard-working people who don't default on their promise to pay.
    Kim
    The Lord will provide

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    Registered User CPA-Kim's Avatar
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    Quote Originally Posted by bumplett View Post
    Just my opinion, but I think it's a horrible idea to weed people out based on a number.
    There are so many reasons that people have a low score that may not be of their own choosing.
    There's a vast difference in the family that files bankruptcy due to credit card debt vs. the family that files due to medical expenses - kwim?
    Or the newly divorced single parent that, try as they might, can't make the mortgage payment on time -

    My brother has a horrible credit score due to poor decisions in his youth, and now pays cash for everything, but was turned down a decent job despite experience, etc.

    so, I get it on one hand, but don't on another -
    I understand and I empathize with people who have bad credit following them long after they've changed their ways. It's worse when the bad credit is no fault of theirs. The recent change in bankruptcy laws has also hurt many people by forcing them into Chapter 13 as opposed to Chapter 7.

    But there is still a pervasive mentality among many people in this country that have the mindset, "if I can afford the payments, I can afford it." Lenders are still encouraging this even after the housing crash when so many lost their homes. Just walk into Best Buy this weekend and see how many people are getting 60 inch screens in preparation for the Super Bowl. If you stand behind them, they are putting it on plastic. Sure, some of them will pay it off but many of them will make the minimum payment and end up paying twice what the TV cost.
    Kim
    The Lord will provide

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    I have excellent credit. I know that 840 is the best and I am 814. Decades ago, I co-signed a loan for someone who wasn't worth it and ended up paying the last 3 payments for this undeserving person's loan. That ruined my credit as this person didn't tell me that she didn't have the money for the last three payments and told me after the last payment was due. This ruined my perfect credit, and needless to say, I never co-signed a loan for anyone again. I read an article years ago about how to have good credit and tried to apply this to my life. I have only one credit card. As long as you make the minimum payment you will be fine, I haven't transferred my balance from one cc to another in decades, this will lower your score. I have paid it off several times and sometimes I can't pay it all off at once, like right now. But I make a payment that is at least 4 times the minimum payment. Life is just like that sometimes, Life will throw you a curveball and you have to charge something that you didn't think you would ever have to charge or pay for. But, I am slowly chipping away at my cc bill. Instead of making one payment a month, I make two because the interest seems to continuously go up. If you make two payments a month, the monthly minimum will go down faster too.

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    Easy fix here mndtrp. Just get a credit card, buy something like a dress on it and pay it all off at once. BINGO, you will have excellent credit.

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    Registered User CookieLee's Avatar
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    Our credit score got dinged because we paid off our mortgage. Instead of realizing that we owned our house free and clear, the credit report says our score has been affected because no mortgage information has been reported.

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    Registered User CPA-Kim's Avatar
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    Here is a pie chart explaining the percentages of various things that affect FICO Scores.
    FICO Credit Score Chart: How credit scores are calculated
    Kim
    The Lord will provide

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    Registered User khaski's Avatar
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    Yes, that's not a change, though. She specifically mentioned it was something new. I hope she elaborates soon to clear it up for me!

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    Registered User CPA-Kim's Avatar
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    Quote Originally Posted by khaski View Post
    Yes, that's not a change, though. She specifically mentioned it was something new. I hope she elaborates soon to clear it up for me!
    There is a whole new rating that more and more creditors, employers, etc. are using. It's called VantageScore. It works on a similar formula as FICO Scoring and it should be more transparent to consumers. For a long time, lenders used different formulas to come up with a score. Now, some use FICO, some use VantageScore. Supposedly, the transition to VantageScore is in the process.

    Here's the link to it
    VantageScore Consumer Credit Scoring | VantageScore Solutions

    Here's the consumer site link
    How Credit Scores Work | Your VantageScore
    Kim
    The Lord will provide

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    Registered User imagine's Avatar
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    Hubby said where he works (a bank) they have pulled credit reports on new employees for years. He says there is no hard and fast number becuase they are not looking at the credit score but at the report. It shows a bit about the person and their finacial situation. It is part of seeing if the person would be a fit for the job. It is also not the end all to the interview but part of getting the whole picture.

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    Registered User CPA-Kim's Avatar
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    Quote Originally Posted by imagine View Post
    Hubby said where he works (a bank) they have pulled credit reports on new employees for years. He says there is no hard and fast number becuase they are not looking at the credit score but at the report. It shows a bit about the person and their finacial situation. It is part of seeing if the person would be a fit for the job. It is also not the end all to the interview but part of getting the whole picture.
    When I worked as an auditor, it was part of our internal risk analysis. One of the variables we looked at was if the person had a plan "to make it right again" or was a continual high risk employee. We took the position that if one was careless with his own money, he shouldn't be involved with other people's money. That was why we looked at the whole credit report, not just the number. Looking at the number is sort of looking at a person's weight without uncovering the factors that got them to that weight.
    Kim
    The Lord will provide

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