Hey bank/credit guru's...

GtsKid said:
Over on the this side of the border a large unused line of credit hurts your GDS/TDS ratios as the limit balance is factored in to total debt ratio as being used. Example, enter mortgage with empty credit line of say 50K and then go blow it the week after you get the house. The ratio is worked to include those limits even if empty. That's the deal on those that I deal with for financing deals over here, may differ on your side, or even lender variations.

You would think if you had a 50K credit line and haven't used it in years that would be taken into consideration, I guess from a lender's perspective you could use it and change your debt ratio negatively.

Ryan
Viper GTS
Tahoe Z71
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From my experience this is very true what Ryan is saying, and again it depends on what you are trying to do, I purchased my home and luckly I sat down with someone before I found the home I wanted and close the un-used credit cards that I had open. Again if they know you can spend $10,000 (lets say on a visa card that you havent used) they factor that into any and everything you are trying to get credit for. (car,home,tools,computer, etc) I applied for a $175,000 Loan and wasnt approved at first but after closing my accounts that were open that I wasnt using (about $20,000) 4-6 months later I was approved by the same bank with a better rate, now alot of people also try to say when getting approved it also depends on the promotion, the economy and what kind of loan it is.. Im not an expert but it was damm hard to get a loan for a house being 20 years old :( but it went threw with the help of a few ppl off of MM and threads like this with little pieces of info that helped.

p.s. Al didnt even wanna help me :)
 
Thanks guys... My main focus is close up the CC's and keep my credit score up there... I have excellent credit along with my parents thanks to them for teaching me all the in's and out's... I just wasn't sure what would happen if I closed up all the accounts what is going to happen to my credit score...
 
lethalss said:
no, i'm right. :) I used to do underwriting at flagstar for 3 years man. Large open empty revolving credit accounts are not good.
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No, you're wrong. Here is a simple explanation...

Say you have $10,000 in credit debt, and all that debt is on 1 card that has a $15,000 limit. Your debt to available credit ratio is about 66.66%.

Say you have that same $10,000 in credit debt over 4 credit cards, all with $15,000 limits.

15,000 x 4 = $60,000 available to you. you have only $10,000 out. Guess what, you now have a 16.66% debt to credit available ratio.

In terms of what looks better and ups your credit score... 16.66% > 66.66%.

This is not up for debate. I am correct and do not feel the need to spend any more time discussing this. I have been doing mortgages/finances IN THE REAL WORLD for over 4 years now. I have raised clients credit scores as high as 136 points in 9 months. I know my shit. Thanks and have a great day.
 
Crazzy_Al said:
No, you're wrong. Here is a simple explanation...

Say you have $10,000 in credit debt, and all that debt is on 1 card that has a $15,000 limit. Your debt to available credit ratio is about 66.66%.

Say you have that same $10,000 in credit debt over 4 credit cards, all with $15,000 limits.

15,000 x 4 = $60,000 available to you. you have only $10,000 out. Guess what, you now have a 16.66% debt to credit available ratio.

In terms of what looks better and ups your credit score... 16.66% > 66.66%.

This is not up for debate. I am correct and do not feel the need to spend any more time discussing this. I have been doing mortgages/finances IN THE REAL WORLD for over 4 years now. I have raised clients credit scores as high as 136 points in 9 months. I know my shit. Thanks and have a great day.
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In that scenario you are right, but in the scenario we are talking about here, where ReiKo HAS NO DEBT ON THE CARD, you are WRONG. So go do some math and go consult some underwriters and go talk to transunion, whomever you want, you have it wrong bub. Two other people besides me have already confirmed this above, and I am speaking from REAL WORLD EXPERIENCE as well. Your example above is completly right, BUT, in ReiKo's example, you ARE WRONG. I know MY shit. Thanks and have a great day.
 
ReiKo said:
I owe XX,XXX on a few credit cards... I am thinking of paying them all off... Should I close the accounts or keep them open? What would be the best bet to do with them?
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You want to be careful on what accounts you close, don't close older accounts because you could shorten your credit history. If you close an old acount it could have a negative affect on your credit score.

lethalss said:
In that scenario you are right, but in the scenario we are talking about here, where ReiKo HAS NO DEBT ON THE CARD, you are WRONG. So go do some math and go consult some underwriters and go talk to transunion, whomever you want, you have it wrong bub. Two other people besides me have already confirmed this above, and I am speaking from REAL WORLD EXPERIENCE as well. Your example above is completly right, BUT, in ReiKo's example, you ARE WRONG. I know MY shit. Thanks and have a great day.
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I agree with Al

I have at least 15-20 open & unused credit card accounts I carry a Zero Balance and my three scores ranged from 786-820

My wife was in a similar situation with not nearly as many credit cards and her three scores were 789-800.

Explain to me how our credit scores were so high if what you are saying is right? I was told years back before I bought my first house that I should close my CC acounts as well but my score is way higher now with all of them open.


BTW Nobody really knows how your credit score is figured out

The number itself can range from 300 to 900. The formula for exactly how the score is calculated is proprietary information and owned by Fair Isaac. Here, however, is an approximate breakdown of how it is determined:

35% of the score is based on your payment history. This makes sense since one of the primary reasons a lender wants to see the score is to find out if (and how timely) you pay your bills. The score is affected by how many bills have been paid late, how many were sent out for collection, any bankruptcies, etc. When these things happened also comes into play. The more recent, the worse it will be for your overall score.

30% of the score is based on outstanding debt. How much do you owe on car or home loans? How many credit cards do you have that are at their credit limits? The more cards you have at their limits, the lower your score will be. The rule of thumb is to keep your card balances at 25% or less of their limits.

15% of the score is based on the length of time you've had credit. The longer you've had established credit, the better it is for your overall credit score. Why? Because more information about your past payment history gives a more accurate prediction of your future actions.

10% of the score is based on the number of inquiries on your report. If you've applied for a lot of credit cards or loans, you will have a lot of inquiries on your credit report. These are bad for your score because they indicate that you may be in some kind of financial trouble or may be taking on a lot of debt (even if you haven't used the cards or gotten the loans). The more recent these inquiries are, the worse for your credit score. FICO scores only count inquiries from the past year.

10% of the score is based on the types of credit you currently have. The number of loans and available credit from credit cards you have makes a difference. There is no magic number or combination of types of accounts that you shouldn't have. These actually come more into play if there isn't as much other information on your credit report on which to base the score.
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lethalss said:
In that scenario you are right, but in the scenario we are talking about here, where ReiKo HAS NO DEBT ON THE CARD, you are WRONG. So go do some math and go consult some underwriters and go talk to transunion, whomever you want, you have it wrong bub. Two other people besides me have already confirmed this above, and I am speaking from REAL WORLD EXPERIENCE as well. Your example above is completly right, BUT, in ReiKo's example, you ARE WRONG. I know MY shit. Thanks and have a great day.
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I think what you meant was that you DON'T know shit! Looks my example is SPOT ON in regards to factual information and information necessary to Reiko...
ReiKo said:
I owe XX,XXX on a few credit cards... I am thinking of paying them all off... Should I close the accounts or keep them open? What would be the best bet to do with them?
Click to expand...
Crazzy_Al said:
No, you're wrong. Here is a simple explanation...

Say you have $10,000 in credit debt, and all that debt is on 1 card that has a $15,000 limit. Your debt to available credit ratio is about 66.66%.

Say you have that same $10,000 in credit debt over 4 credit cards, all with $15,000 limits.

15,000 x 4 = $60,000 available to you. you have only $10,000 out. Guess what, you now have a 16.66% debt to credit available ratio.

In terms of what looks better and ups your credit score... 16.66% > 66.66%.

This is not up for debate. I am correct and do not feel the need to spend any more time discussing this. I have been doing mortgages/finances IN THE REAL WORLD for over 4 years now. I have raised clients credit scores as high as 136 points in 9 months. I know my shit. Thanks and have a great day.
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Lethalss, please do not post in this thread anymore. I am only able to tolerate a certain amount of stupidity and ignorance on a daily basis and you're using up a good portion of my daily allowance. It's not fair to the other stupid people who don't like to listen.
 
L98Terror said:
You want to be careful on what accounts you close, don't close older accounts because you could shorten your credit history. If you close an old acount it could have a negative affect on your credit score.



I agree with Al

I have at least 15-20 open & unused credit card accounts I carry a Zero Balance and my three scores ranged from 786-820

My wife was in a similar situation with not nearly as many credit cards and her three scores were 789-800.

Explain to me how our credit scores were so high if what you are saying is right? I was told years back before I bought my first house that I should close my CC acounts as well but my score is way higher now with all of them open.


BTW Nobody really knows how your credit score is figured out
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depending on what you own, credit history, length of account, account type, credit etc, there are a ton of factors why yours are high, but they COULD be higher with less open accounts. In your case, it is probably best to keep them open. But, we aren't talking about you, credit is by case, its not defined for all situations. I know Reiko lives at home, probably has some debt, and doesnt own a house, so it is better for him to close open stale accounts.

Al, that's weak, you can't even admit that his situation might be different than what you posted. And I WILL reply to this thread if I want.
 
lethalss said:
Al, that's weak, you can't even admit that his situation might be different than what you posted. And I WILL reply to this thread if I want.
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HIS SITUATION IS NOT DIFFERENT!!!!!!!!!!!!! LOOK AT THE MOTHER FUCKING POSTS!!!!!!! PLEASE REMOVE YOUR HEAD FROM YOUR ASS AND READ!!!!!!!!!!!


SURE, REPLY AWAY, EVERYONE LOVES READING INNACURATE INFORMATION POSTED BY SOMEONE WHO HAS NO IDEA WHAT THE FUCK THEY ARE TALKING ABOUT.


:furious: :mad:
 
Don't forget there is a diminishing return.... As it is all based on ratio...

Plus, everyone has their own evaluation criteria... I know that the in-laws use Factual Data as a credit scoring company... They only look at the score as part of it... They see people every day with high 700's that they don't give the best rate too because they have insane amounts of available credit...
 
lethalss said:
depending on what you own, credit history, length of account, account type, credit etc, there are a ton of factors why yours are high, but they COULD be higher with less open accounts. In your case, it is probably best to keep them open. But, we aren't talking about you, credit is by case, its not defined for all situations. I know Reiko lives at home, probably has some debt, and doesnt own a house, so it is better for him to close open stale accounts.

Al, that's weak, you can't even admit that his situation might be different than what you posted. And I WILL reply to this thread if I want.
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Al point is the same as mine, you claimed that unused open accounts were bad but that is not necessarily the case. It's better to have an old credit card open than closed. You don't want to shorten your credit history.

Let me ask you a question define a 900 credit score?


BTW

Don't close old, paid-off accounts
We used to tell people to close accounts they weren't using. Now here's the word from direct from Craig Watts, an executive at Fair Isaac & Co., one of the leading credit scorers: "Closing accounts can never help your score, and often it can hurt."

This knowledge is frustrating to those who want to simplify their lives and reduce the opportunities for identity theft by closing unused accounts. But credit facts are credit facts.

Shutting down credit accounts lowers the total credit available to you and makes any balances you have loom larger in credit score calculations. If you close your oldest accounts, it can actually shorten the length of your reported credit history and make you seem less credit-worthy
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http://articles.moneycentral.msn.com/Banking/YourCreditRating/BeefUpYourCreditScoreIn5steps.aspx
 
open accounts were bad for me and my wife we had about 300-350k ( i'm probably under estmating this) in credit cards and unsecured open lines of credit, with 0 balances but had high credit scores, we were turned down for a morgage, once we closed most of them they gave us a morgage. Something about having to much unsercured debt vs our income and if we ran up our CC we wouldn't be able to pay anyhthing. We now keep about 50k in unseured and keep the balances less than 30% and our credit scores haven't moved. but this was our case. You hve to keep some credit. My father-in-law was very weathy (dead now) he was turned down for a morgage because he had no credit. Paid for everything cash his whole life. Credit can be good and bad.
 
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Crazzy_Al said:
This thread needs to be shot execution style and dragged to the fucking curb, to rot!
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Wow, relax. No sense blowing a gasket over this thread. The ones that know that you are right know. Refer to L98Terror's sig - something from postban.

This is the internet aka the Playground. On the internet everyone is an authority on everything.

Bottom line Reiko, leave them open. Especially if they are old accounts in good standing. I closed one of my oldest credit accounts and screwed myself since it dropped my average credit age or some shit like that.
 
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