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The formula works both ways. If you have a low utilization rate they look at the potential you have for racking up more debt (the other 96% of your credit lines) and sometimes that makes you less desirable. If you're maxed out or close to it they don't like that, either.
I have given up on trying to understand credit card companies.
I've never had my credit score drop because of low utilization, my CC utilization is between 2% and 3%, my FICO is 847. If my utilization moves up or down by 1 point my FICO goes up or down by one point.
I've never had my credit score drop because of low utilization, my CC utilization is between 2% and 3%, my FICO is 847. If my utilization moves up or down by 1 point my FICO goes up or down by one point.
As a general rule, lenders don't like to see profiles with a 0% utilization rate because then they'll think you already have too much credit you're not using, so why should they extend even more credit to you? Lenders will also see you as a "deadbeat," who is someone that only uses credit cards in order to get the rewards/bonuses while always PIF before interest accrues.
That's why those individuals see a drop in their FICO score.
The sweet spot to maximize your FICO score is to have an overall utilization rate between 1% and 9%.
OP, I don't think I'd apply for another credit card until you get the letter that explains why you were denied. Every time you apply, your credit score takes a hit for just applying since the issuer did a hard pull against it. So you definitely don't want a string of denials.
I would take advantage of a free credit report to see if something has popped up on there that shouldn't. I stagger my requests throughout the year so that I can pull one every 4 months for free from one of the 3 agencies.
Hmmmm. It is unusual with a 721 score which is not "platinum" but pretty good. I'm not familiar with the term "different debt" but from what you describe I am guessing it is what I have usually heard called "consumer debt" or "revolving credit" as opposed to installment. There are two major forms of consumer debt, installment and revolving. Installment is like a mortgage, car note or student loan - you have a set payment due each month until it is paid off. Revolving is a credit card, which goes up and down as you use it. As I understand it, people can be good with installment and bad with revolving and the other way around, so if you have no revolving on your credit report that may be contributing to the problems you are having getting a credit card. Also, I've known people who have taken out credit card and always paid them back in full, which you would think should increase your score but doesn't seem to - the credit card companies want to collect something for fronting that money to you (beyond what they get from merchants - they like to get paid by both sides of the transaction).
Yes, this pretty much is what the credit union loan guy alluded to when he denied me in August.
I don't have any credit card debt because I've never had a one ever. However, that doesn't seem right to me because I do have credit are I wouldn't have a 721 credit score, to begin with.
According to my free credit report through Turbo Tax I don't have any debt but student loans. Credit Karma says the same. However, that's not good enough for credit card companies it seems.
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I have a CreditKarma account, and it's always sending me offers of various credit cards that I am qualified for. Open up an account and see if you get any offers.
I opened a Credit Karma account. The only one that seems interesting from their suggestions for me was the Discover it® Cash Back card.
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Originally Posted by SouthernSusana
OP, I don't think I'd apply for another credit card until you get the letter that explains why you were denied. Every time you apply, your credit score takes a hit for just applying since the issuer did a hard pull against it. So you definitely don't want a string of denials.
I would take advantage of a free credit report to see if something has popped up on there that shouldn't. I stagger my requests throughout the year so that I can pull one every 4 months for free from one of the 3 agencies.
Really? I was hoping to get a credit card before I do the FAFSA for graduate school starting in Jan.
I didn't want to apply after because then all these deferred loans will now be on my credit report right?
Or am I overthinking that since I still have undergrad student loans on my account and my score is 721.
Would it be bad just to risk two more possible dings?
I wanted to try for the Chase student card and the Amazon card since I have prime. However, the issue with prime is that I rarely use it so should I even be thinking about a card from them?
Last edited by fantasy09; 12-14-2020 at 05:26 PM..
Yes, this pretty much is what the credit union loan guy alluded to when he denied me in August.
I don't have any credit card debt because I've never had a one ever. However, that doesn't seem right to me because I do have credit are I wouldn't have a 721 credit score, to begin with.
According to my free credit report through Turbo Tax I don't have any debt but student loans. Credit Karma says the same. However, that's not good enough for credit card companies it seems.
I opened a Credit Karma account. The only one that seems interesting from their suggestions for me was the Discover it® Cash Back card.
Really? I was hoping to get a credit card before I do the FAFSA for graduate school starting in Jan.
I didn't want to apply after because then all these deferred loans will now be on my credit report right?
Or am I overthinking that since I still have undergrad student loans on my account and my score is 721.
Would it be bad just to risk two more possible dings?
I wanted to try for the Chase student card and the Amazon card since I have prime. However, the issue with prime is that I rarely use it so should I even be thinking about a card from them?
i have a Prime card from Chase, but I am guessing that you are thinking of the Amazon store card? There are two of them.
I imagine Chase will deny you for the Amazon card they offer. It is good everywhere, though. Like you said, the Amazon store card won't do you much good if you don't shop there a lot. However, you can buy textbooks, etc. on amazon.
I don't see what the FAFSA has to do with credit cards. Students loans, yes, but not the application for aid. You won't get a loan, right, until sometime in January? Give your credit score a rest until you see why you were rejected.
jyi it's unlikely that her two short term loans even appear on her credit report in her favor. Not likely they were even reported, and four months is too short. fyi also, I'm not sure about this one, but these bank and loan "deferments" ARE reported to your credit report. She needs to sign up for KK or equivalent and stay on top.
OP, where do you bank? Get a credit card there. See if they offer a "student package". Maybe you need a job, any job to have direct deposit in the account.
I have been using CreditKarma.com to monitor 2 of my credit scores for the last 12 years.
I find it useful.
And, it is an excellent place to start.
I do find its credit card offers to be a bit strange.
My credit score is 824 and yet CK says "fair approval odds" for a US Bank Visa card.
I don't get the "fair" part when my overall credit utilization is 4% and I have an AMEX Platinum card, Chase Sapphire Preferred card, Mastercard, credit union Visa card.
My wife, with the same credit score, has "excellent" odds for a half-dozen cards.
You know that's a fairly large-ish amount of credit cards to have - as in: the amount of credit available from the same type of source and not spread among other things.
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