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Posts: 1
Registered: ‎12-23-2013

Understanding Credit Score

My credit score has been hooverign around 800, and does not appear to move higher.  Here is my profile...I have a few credit card: 1 Amex, 4 VISA/MCs.  I pay them off every month and carry no balance for over the last 25 years.  I don't have installment loan, mortgage nor car loan.  I bought my house and car with cash after I have saved enough money.   Occasionally, I may apply a store credit card to get certain discount.  But I have stopped doing it already.


I don't know if this is the reason why my credit score is not going higher:

1) the store credit that I apply and subsequent cancel is killing my credits core;

2) I get penalized because I don't have a mortgage or car loan.  But should it be more favorable to credit score if I don't have any.

Posts: 22,406
Registered: ‎01-17-2008

Re: Understanding Credit Score

Hi and welcome to the forum.


I know of several who only have credit cards and no mortage or installments and have an 800+ score.  There are also those that have no CC and still have an 800+.  So it can happen.


1.  Can you give details on how this is hurting your score.  I can see maybe an impact when the new account hits your report but not the closing of it.  The only impact would be the removal of the credit limit from factoring into your utilization.  But if you carry no balances it should not be an issue.


2.  No, I don't think you are penalized for that. 


When you pay off your credit cards, are they paid off before they report to the credit bureaus?  If not, that could be an issue if you have large balances reporting. 


FICO doesn't like all credit cards to report 0 balances nor all of them to carry balances.  For optimal scoring it is best to let all but one report 0 and the last one report at 9% or below.  Utilization is the one thing you can control.  Everyone has their own "sweet spot" for the optimal score.  It may just take some experimenting to find it.






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