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credit question

Date: Mon, 02/26/2007 - 13:41

Submitted by dalfire497
on Mon, 02/26/2007 - 13:41

Posts: 140 Credits: [Donate]

Total Replies: 15


This isn't really regarding a collection agency, but since I am usually on this forum I will ask your opinion. A couple of years ago, we closed a credit card account and had an agreement to pay it with 0 interest. All good - we paid it off, and I got a letter that is was closed. Recently we got a letter that MBNA was consolidating with another company, welcome etc. I went on line & it shows that my account is ready to use. I figure it was prob from the changeover. I don't even have a current card for this account, and I don;t want one. We do not plan on ever even using this one, but I am wondering what is better for our credit - to leave it open showing no balance, or to close it completely. I am doing real well trying to up my score, and beside the whole medical thing I have been posting about, I am doing pretty good....just not sure what to do in this situation. many thanks!!


What I believe about credit scores as it relates to your post:

-Creditors look at the length of time you've had an open account

-Creditors look at the amount of available credit you have

My loan officer friend has told me several times that closing a credit card account will effectively lower your credit score, although he was unsure of by how much.


lrhall41

Submitted by Morningstar on Mon, 02/26/2007 - 13:44

( Posts: 1633 | Credits: )


when we called them it was "suspended" I have to look in my files, but I could swear that I have a letter that says it was closed. I just got this other info a few weeks ago. I think that is why I was considering closing it AGAIN - just because I don;t like the way it feels.... know what I mean? I just don;t want to do more damage to my credit by doing so - also there is no activity on it, so I think that they just reactiviated it when they consolidated.


lrhall41

Submitted by dalfire497 on Mon, 02/26/2007 - 13:55

( Posts: 140 | Credits: )


Keeping a credit card account with an available line of credit isn't necessarily good for your credit score. Just because you have an available line doesn't mean your debt to earnings ratio is acceptable. Nor does it mean that your score will be better if it's an open account. If you don't intend to use it, if it were me, I'd close it.


lrhall41

Submitted by fjv4 on Tue, 02/27/2007 - 07:05

( Posts: 62 | Credits: )


Quote:

Did I miss something at www.myfico.com? Scores are based on utilization and account age along with a few others.

Yes, I believe you did. To begin, only Experian uses the FICO Score. Transunion uses the Empirica and Equifax uses the Beacon. Secondly, credit scores are not the only determining factor. As I mentioned in my previous post, the debt to earnings ratio is a greater factor in determining credit worthiness.

As to specifics regarding the information I posted previously, I'm confident this supports my position. Please read -

Here are the top factors that make your score lower:

Average balance of retail accounts is too high. High credit balances for revolving accounts (credit cards) and some installment accounts (mortgages and auto loans) are considered by lenders to be a negative factor when determining credit worthiness. This is
because high credit balances suggest a sense of living outside your means, which is a high risk for creditors if they are trying to gain repayment. In addition, never using your credit cards is also considered a negative factor because it does not provide lenders with enough information about your creditworthiness. Lenders evaluate how much you owe other creditors in relation to your income. To contrast, low balances for revolving accounts (credit cards) and some installment accounts (mortgages and auto loans) are considered by lenders to be a positive factor. This is because lenders are at less of a risk if you become unable to repay them. The best deals from creditors are always given to people who display a high level of financial responsibility.


lrhall41

Submitted by fjv4 on Tue, 02/27/2007 - 09:21

( Posts: 62 | Credits: )


I think I am ready to give up the balancing act with the credit scores and let the chips fall where they may.
Use my cards and pay monthly. Buy a car and take the hit on intrest. To old to care about a house so the h*&* with it all..
just live everyday to the fullest and not worry what the BIG 3 have to say.
Judy


lrhall41

Submitted by Poptarts.mom on Tue, 02/27/2007 - 09:39

( Posts: 407 | Credits: )


Actually your dead wrong. True fico is equifax. If you go to myfico and sign up for scorewatch you get that score provided by equifax. I disagree with some of your other statements as well but will leave that alone.
To the op,pull your scores from myfico. If money is an issue,go to equifax and pull just that report with fico score. It will at least tell you where your at.
Pay bills on time and your score will slowly go up. If you have any major financing about to happen,ask creditor for either a rapid rescore or a manual credit review. Just remember as you add credit and pay on time your file will rebuild itself over time.Above poster did make a statement with some truth in it. If you have revolving credit,bankers like to see some use. I just started playing the credit card game again myself. About 4 yearsago,I almost got in trouble with cards with my card companies playing the disappearing payment address,moving payment date,and changing apr's on account. I called each one up and asked how they were gonna fix this. They refused to do anything for me,so I closed out every one of them and balance transferred to a consolidation account with chase that I am paying on at 2.9%. I plan to build a home in the near future so I got back into credit cards to show some action on my accounts and to prep for a full mortgage workup credit profile. Good Luck and if you need any additional info,I am only a pm away.


lrhall41

Submitted by cajunbulldog on Tue, 02/27/2007 - 10:40

( Posts: 4850 | Credits: )


Since question has been raised I am posting this from actual websites dealing with scoring models.

Quote:

From www.myfico.com details about Scorewatch:
??????? Monitors your credit file at Equifax and FICO???? credit score
??????? Notifies you when you reach your target score or when you qualify for a better interest rate
??????? Alerts you when unexpected changes to your credit report cause your FICO score to drop
??????? Provides two Equifax Score Power reports each year
From www.equifax.com details about Scorewatch:
??????? Continuous score monitoring and notification when a change in your FICO???? score impacts the interest rate you are likely to receive
??????? Detailed explanations for key score changes and specific tips for understanding your score
??????? Daily monitoring of your Equifax Credit Report with email notification of key changes (email / wireless alerts)
??????? Two Free Score Power???? reports, plus discounts on additional Score Power???? reports
??????? Detailed "Bottom Line" of what your most current score means, comparison with national averages, and a graph of how lenders view you
??????? Access to friendly and knowledgeable Customer Care available 7 days a week

From www.transunion.com about their scoremodel:
The TransUnion TransRisk New Account Credit Score is provided to help you better understand how lenders view your credit report. It is not an endorsement or a determination of your qualification for a loan. Lenders use credit scores to help determine whether or not you are a good candidate for a loan and what interest rate you will pay. However, each lender has specific underwriting standards, so you should not assume that you will receive the same evaluation from each lender. As part of the underwriting process, they will incorporate additional information you provide and may obtain references. In addition, even if you are approved, the terms and conditions of loans vary from lender to lender. The information used to determine your credit score comes from TransUnion, one of the major credit bureaus. Credit reports are a compilation of credit information that is reported to the bureaus by the various lending institutions with which you have accounts. The information contained in your report reflects the latest information provided. If you recently made a payment, opened a new account, or authorized an inquiry, it may not yet be reflected in the credit report you receive. Likewise, it will not be reflected in your credit score. Also, disputed items are not incorporated in the assessment of your credit score. Your credit score will change each time new information is captured in your record. TrueCredit is not connected in any way with Fair, Isaac and Company; the credit score provided here is not a so-called FICO score. The credit scores of TransUnion may not be identical in every respect to any consumer credit scores produced by any other company.

From www.experian.com about their scoremodel:
??????? See the same type of information that lenders and creditors see before you apply for credit, with Experian VantageScore
??????? You could save money by having the information you need to negotiate better rates on your next home loan, refinance, car loan or credit card
??????? Receive detailed explanation of the important factors that could impact your credit score
??????? Order it for only $5.95 or call us toll-free at 1 888 322 5583


By looking at this content you can determine that equifax is the only true fico provided by a credit bureau. If you desire true fico scores,go to
www.myfico.com and pull them.


lrhall41

Submitted by cajunbulldog on Tue, 02/27/2007 - 11:28

( Posts: 4850 | Credits: )


thanks everyone for all the info - sometimes it sure seems like you d****d if you do...etc. I am going to pull my credit report today, also to see if there is anything on it from my original medical issues, but to see what it states on there regarding this account.


lrhall41

Submitted by on Tue, 02/27/2007 - 12:24

( Posts: | Credits: )