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-   -   Credit Cards and FICO score (http://www.cougarguard.com/forum/showthread.php?t=24639)

TripletDaddy 11-11-2008 04:18 PM

Credit Cards and FICO score
 
I don't have a bunch of credit cards. I have never been huge on amassing loads of cards....In fact, I only have 3.....and one of them isnt in my name, as it is provided by the firm for T&E, so it doesnt even show on my credit report. We don't do department store cards, either.

Focusing on my 2 "real" credit cards......

1. My credit score is fine. It isnt over 800 like some, but still just fine (above 700). I'd like to keep it that way.
2. I have had both credit cards for about 8 years now.
3. I know that closing an old account can actually hurt your credit score

Here is where I need the guidance. One of the cards has an annual fee attached to it as part of a rewards program (airline miles). However, I almost never use the card and don't really care about the miles rewards. It is a waste to pay the annual fee, but I dont want to cancel.

Assume that the credit card company offers a no-fee credit card, sans rewards program. If I switch from my current card to the new, no fee version, does that constitute "closing" my account and will it ding my FICO score?

I called the company to ask but the customer service rep said that they do not comment on credit scores. I guess I could call one of the Big 3 and ask how they calculate, but does anyone here have experience with this?

Tex 11-11-2008 04:25 PM

I am not an expert in this at all, so take this all with the appropriate grain of salt.

I have been told by people in the know that opening and closing credit cards causes only minor dings to your credit, to the tune of only a point or two.

I frequently open and close cards within a few months period just to take advantage of whatever freebie is offered (15,000 miles, 10% off first purchase, whatever). My credit rating is as yours, quite healthy. When I check my rating periodically, I do get the "too many cards opened in last 12 months" message, but since my number is well over 700, I don't really care.

Personal opinion: you're far worse to be actually paying out annual fees than accepting whatever minor hit you might take for closing a card.

My 2 cents.

Surfah 11-11-2008 04:27 PM

Quote:

Originally Posted by TripletDaddy (Post 293608)
I don't have a bunch of credit cards. I have never been huge on amassing loads of cards....In fact, I only have 3.....and one of them isnt in my name, as it is provided by the firm for T&E, so it doesnt even show on my credit report. We don't do department store cards, either.

Focusing on my 2 "real" credit cards......

1. My credit score is fine. It isnt over 800 like some, but still just fine (above 700). I'd like to keep it that way.
2. I have had both credit cards for about 8 years now.
3. I know that closing an old account can actually hurt your credit score

Here is where I need the guidance. One of the cards has an annual fee attached to it as part of a rewards program (airline miles). However, I almost never use the card and don't really care about the miles rewards. It is a waste to pay the annual fee, but I dont want to cancel.

Assume that the credit card company offers a no-fee credit card, sans rewards program. If I switch from my current card to the new, no fee version, does that constitute "closing" my account and will it ding my FICO score?

I called the company to ask but the customer service rep said that they do not comment on credit scores. I guess I could call one of the Big 3 and ask how they calculate, but does anyone here have experience with this?

Could you maybe threaten to close the account unless they wave your annual fee?

I have no clue how any of this is calculated and I doubt you'll be able to find any sort of calculation on how this works out. Credit is a mystery to me and I think it rather absurd that you don't have access to it but anyone else with your permission can see it and then not discuss it with you.

TripletDaddy 11-11-2008 04:28 PM

Wow, really? Thanks for the info. I wonder if anyone else can attest to the minor ding. I had always assumed it would really "hurt" the score, but admittedly, I have never heard it quantified before. In my head, I pictured something like a 30 point drop....which, now that I think about it, would be pretty severe.

If that is really the case, I will close it today. After all, if my score drops from 799 to 798, what do I care?

Tex 11-11-2008 04:29 PM

Quote:

Originally Posted by Surfah (Post 293616)
I think it rather absurd that you don't have access to it but anyone else with your permission can see it and then not discuss it with you.

FYI, you can request a full report of your credit once a year from each of the 3 credit agencies at no charge.

TripletDaddy 11-11-2008 04:31 PM

Quote:

Originally Posted by Surfah (Post 293616)
Could you maybe threaten to close the account unless they wave your annual fee?

I have no clue how any of this is calculated and I doubt you'll be able to find any sort of calculation on how this works out. Credit is a mystery to me and I think it rather absurd that you don't have access to it but anyone else with your permission can see it and then not discuss it with you.

I hadnt thought of that, but I am sure you can. In the early 2000s I told them that they needed to lower the APR or else I would get really mad. For whatever reason, they listened and lowered the rate.

We try to be pretty good at not carrying a balance, so truthfully, even the monthly APR isn't a huge issue to me. I just don't want to pay any more annual fees.

Tex 11-11-2008 04:32 PM

For what it's worth, here's an interesting article on the topic from just a few months ago that came up via Google.

http://getrichslowly.org/blog/2008/0...a-credit-card/

YOhio 11-11-2008 04:34 PM

Just close the account and quit being such a baby about it.

TripletDaddy 11-11-2008 04:34 PM

Quote:

Originally Posted by Tex (Post 293620)
FYI, you can request a full report of your credit once a year from each of the 3 credit agencies at no charge.

Does that include your actual score? I thought it was just the report (which is also very telling, to be sure).

Surfah, I would do as tex says and pull your report every now and then. In the past, I have found errors, including:

1. A series of unpaid medical bills for surgeries. I didnt have any surgery or medical bills, so that one was easy to get removed.
2. A late payment for some bank loan.....attributed to me but should have been attritbuted to someone living in Oklahoma. I had never taken out any such loan.
3. Department store charge cards that I never opened.

It is pretty safe to say that the credit agencies are not perfect and need a little help from time to time.

TripletDaddy 11-11-2008 04:36 PM

Quote:

Originally Posted by YOhio (Post 293625)
Just close the account and quit being such a baby about it.

Whatever you say, Mr Chapter 13.

Just because your score is shot doesnt mean I want mine to be that way.


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