Originally Posted by cpltony

Took out a car loan with my grandfather inlaw in May 05....paid it religiously on time and in advance. Should be paid off by the end of the year.

Took out a $500 limit credit card in Dec 05 and carried a balance a few months but never was late with a payment. Paid it off about 3-4 times but I keep it open for my wife with online pre-orders that can charged whenever.
We've had the balance increased.....I call to get it decreased again.

Paid electric bill on time since Mar 06 and nothing else.
No other debt at all.

Credit score of 701 just from that.
So if you don't plan to use the card more than a few hundred a month, get the credit limit lowered and freeze it. It's like pulling teeth with Capital One but trust me....its security for you in the long run.

Best advise I can give....pay it off and cut it up.
Self insure and keep $1000 in your savings at all time for emergencies.....because life happens

Oh and you can stop most credit card offers by going to http://www.optoutprescreen.com

Originally Posted by Longy

For someone trying to build credit its not a good idea to be reducing limits - this will hold back your credit score.

Originally Posted by georgio

Hey, thanks again for the advice. I think I've done quite well by avoiding the secured card - giving the bank $1000 of mine to hold onto for a year seems quite an expensive way to build credit. .

Originally Posted by cpltony

Best advise I can give....pay it off and cut it up.
Self insure and keep $1000 in your savings at all time for emergencies.....because life happens

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Originally Posted by Dan725

A grand? How much you set aside is obviously dependent on circumstances, but I'd say for anyone, $1000 in savings is nowhere near enough!

Originally Posted by tamms_1965

I agree. I think it's more important to cancel a card that you may replace with a lower interest card or card with more perks. It's also important to cancel those "6 months same-as-cash" accounts you may get at Best Buy, Circuit City, etc., when you pay off the purchase. Lenders see these open accounts as potential for debt so close them out in writing even if you never plan on using them.

Originally Posted by BritGuyTN

doing what you suggest reduces you credit score

your credit score is not affected by the amount of potential debt you can get into, it cares about your overall utilization of credit which is harmed by reducing credit limits or closing revolving tradelines (store cards/credit cards)

Originally Posted by scot free

There's plenty of disnformation about credit bureaus on both sides of the Atlantic. Over here, it's actually possible to get a 'reasonable' (i.e. good enough to get a proper credit card) score on the back of paying-off a utility bill each month. That said lenders are generally raising their 'pass' scores due to the current economic conditions.

The best advice is to either build you credit in small steps(as advised elsewhere on this thread), or go for a card linked to your bank or mortgage company. I applied for a mortgage with Wells Fargo as I was tipped-off that they had a special ex-pat team. I was accepted and got a good rate. Since getting the keys I've had plenty of credit card offers!

Originally Posted by tamms_1965

I was told by 2 different loan officers (when purchasing homes) I should always do this because potential lenders see it as potential debt.....nothing was said about credit score. It could effect how much you can borrow or your interest rate when buying a home.

Originally Posted by BritGuyTN

loan officers talk 98% complete crap in many states there is not even a licensing exam

closing revolving accounts reduces your score in two ways

if its an old account they your length of history is reduced

it increases you % utilization if you have any other balances

I have nearly 100k in available credit and have a decent score and have never had a problem getting mortgages

Originally Posted by BritGuyTN

loan officers talk 98% complete crap in many states there is not even a licensing exam

closing revolving accounts reduces your score in two ways

if its an old account they your length of history is reduced

it increases you % utilization if you have any other balances

I have nearly 100k in available credit and have a decent score and have never had a problem getting mortgages

Originally Posted by Dan725

Generally agree, but if you close an old account, does it not remain on your record for several years? I know on my credit report the one credit card account we closed is still there showing all payment history and the "Closed by Customer" statement.

Originally Posted by tamms_1965

My current loan officer I've had for for 2 homes now....she is extremely competent and knows her stuff. But what I'm trying to say it MAY prevent you from borrowing MORE money for a home or it may even disqualify you from a better rate. I have better than a decent score...I have an excellent score.

Originally Posted by BritGuyTN

considering most of the people I have spoken to who run credit repair/counselling companies talk nonsense I hold the view that mortgage sales people are generally not the people to go to regarding advice on credit scoring.

i don't dispute that having a lot of available credit may make some underwriting software or persons get a bit twitchy, I'm just saying that closing accounts is almost always a bad thing from a credit score perspective

I'm about to get 3 more mortgages this month and the recent shopping around has reinforced my opinion of mortgage sales people