W/ high utiliz. what cards could I qualify for?

Discuss anything related to interest rates & fees, like balance transfer offers, low rate cards, annual fees, etc.
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abc
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W/ high utiliz. what cards could I qualify for?

Postby abc » Sun Oct 06, 2013 2:25 am

My scores with the big three are 663, 662, 655

Cards are:

Wells Fargo (balance $19,000, credit line $21,000, 15% apr on purchase),
Chase Amazon (Balance $417, credit line $500, 13% apr)
Chase(Balance 3000, line $3,100, 0% apr)
Bank of America (Balance 4,300, line 10,000, 13%)

Total balance: $27,000, line $34,600
Utilization 78%

My biggest factors lowering my credit are high utilization ratio and 2 or 3 late payment with BOA (I don't remember being 60 days late as they say, but maybe.. stupid mistake on my part, hate paperwork).

I am a programmer by trade, so used to make a lot of money, but that was long time ago, now trying to run a startup out of my own apartment, am completely broke. Can start earning decent money tomorrow if I absolutely have to, but need to buy time, for the startup to have a chance. Meanwhile, I live off credit cards and child support.

Problem is, when I was late with payment, Chase has lowered its credit line on me (hence $500 line instead of $5000).. ouch! If other cards suddenly follow suit, I'll end up on the street!

So I need to lower my credit utilization ratio by applying for a high balance credit card. Who will give me a high balance? Am I right in that a high balance will improve my credit score? (Seems counterintuitive, but that's what online Valculators tell me!)

Applied to Chase Visa and was turned down :-(

I would also, of course, love 0% APR cards, especially with balance transfer options, but very low credit lines will be peanuts and won't solve my problem, while lowering my credit score even further.

Also, I wonder how credit utilization is calculated. Is it TotalBalance/TotalAvailableCredit? For instance, if I transfer $400 from Wells Fargo to my $500 Chase card, will it improve my utilization?

Another question is, do multiple credit card applications lower your credit score instantly, or is it delayed, or are you allowed to shop around if it's all within a day or two?

Last question, if a credit card says it reports me to the credit bureaus on Oct 3, does it mean my credit score changes on Oct 3rd, or is there a delay?

Edit: CapitalOne has been spamming me via snail mail with their offers of 0% Capital Platinum, saying "You are eligible". I finally bit the bullet and applied, was turned down and can't reapply even for their paid, high interest card for another 45 days - bummer! Do they always turn you down for other, less demanding, cards when you apply, instead of offering them as a bait and switch, or is it a particularly bad sign? What would I qualify for now?


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Terry
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Postby Terry » Sun Oct 06, 2013 8:22 am

Until your utilization on each card is 30 percent or less and your score is 700+, you will find that most creditors will not approve any new applications at least with favorable terms and a decent credit line.

Every time you apply for credit, the credit score is affected immediately. As a test, I once checked my score with MyFico before applying for credit and then re-checked it the next day to see a 3 point drop as a result of a single inquiry. If you continue to apply for credit now, you will probably get rejected and your score will be negatively affected. If you are shopping around for an auto loan or a mortgage, the FICO scoring model considers those inquiries as one, but that is not the case for consumer credit such as credit cards or personal loans.
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abc
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Postby abc » Sun Oct 06, 2013 10:36 am

Thank you for your reply.

If my thinking is correct, then I should be able to increase my credit score just by reducing my credit utilization ratio. There are two ways of doing that: paying off balance (not an option for me at present), or getting a high limit credit card, no matter the terms. It can be an annual fee or an outrageous APR, such as 50% - does not matter, as long as I am not using it. If I am right and that increases my score, then that would lead me to a better credit card in the future; and honestly, this balance for a programmer who is always paid 6 digits (when paid at all) does not seem huge.

Is my logic flawed?

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Postby Midori » Sun Oct 06, 2013 8:46 pm

35% - payment history
30% - utilization
15% - length of credit history
10% - new credit
10% - credit mix

You sound like you're plugging away. Good luck with your startup, and all the best to your family.

Honestly, if it was me--- I would ignore my score for the time being, focus on taming my debt, focus on growing my biz. If "taming my debt" meant getting a side job in addition to working on my startup, yes, those 14, 16-hour days for business owners are cliche for a reason. (That would be a bit more complicated if your family was not school age yet, or if you didn't have any local support to help out with them.)

But since you're talking about "getting a card and not using it", you don't sound like you're in a situation where your credit score should be in your top five worries. I'd actually be a little intimidated by the thought of getting a fresh card in your situation, because I don't know if I could resist not using it... "Yes, it has an outrageous APR, but I've made six digits before, and I'll make six digits again, so a little more debt won't hurt..." Likewise, I would deliberately not pick up anything... if it was a prime card with an annual fee, I'd rather put that annual fee towards my preexisting debt, even if I could be qualified. And if I did pick up a card with fees out the wazoo, just for the extra credit line, with no intention of keeping them... whatever I got for it would be a waste compared to my immediate needs that remained unfulfilled.

It's good to plan for the future. Looking over here at starting up our second (third, technically) side biz. But you've got more important things to cultivate than your credit score right now. If, in the process of cultivating those important things, your credit score improves... that's great, and it will happen! But with things so tight, I'd be more clear about my needs and priorities.

abc
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Postby abc » Sun Oct 06, 2013 9:56 pm

Thank you for your letter. I don't think I'll find a new card irresistible; I am very thrifty.

My credit rating is actually very important to me, since credit cards have been my main source of income. Low credit rating = no livelihood, short term.

Since I am paying $670/month in minimal payments alone, an annual fee would really be peanuts compared to that.

So... if there exists a high balance card I could qualify for, even on most draconian terms, and if my understanding is right and it will improve my rating and qualify me for a better card, I am game! Is there such a card?

The question, really, is this: could I qualify for some

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Postby takeshi » Mon Oct 07, 2013 8:01 am

Terry wrote:Until your utilization on each card is 30 percent or less and your score is 700+, you will find that most creditors will not approve any new applications at least with favorable terms and a decent credit line.

Here's a real world example (though it is still just anecdotal evidence):

Late last year I applied for a Slate to carry out some balance transfers. I don't recall my exact utilization but it was definitely over 60%. Chase would only approve me for a $2,000 limit and the highest APR in the range.

About 6 months later I was able to get my utilization down to under 10%. There were really no other changes aside from the lowered utilization and 6 months time. Chase then approved me for a $25K Mileageplus Explorer and a $25K CSP. The APR's on those cards are set but I've had other approvals as well and all of them have been at the lowest APR's in the ranges offered.

I'm not saying that these numbers are applicable to your credit. I'm just providing them as an example of how much of an impact utilization can have.

abc wrote:If my thinking is correct, then I should be able to increase my credit score just by reducing my credit utilization ratio. There are two ways of doing that: paying off balance (not an option for me at present), or getting a high limit credit card, no matter the terms

Correct on the first statement but I'd say that a high limit card isn't an option either though until you get your utilization down. You'll see improvements to your score as lowered balances report and you hit certain milestones.

Also, be aware that extremely high utilization can lead to adverse action. I've had credit limits dropped with high utilization.

abc wrote:Also, I wonder how credit utilization is calculated. Is it TotalBalance/TotalAvailableCredit? For instance, if I transfer $400 from Wells Fargo to my $500 Chase card, will it improve my utilization?

Both total and individual utilization are considered. In other words, if you have 10% overall but 80% on one card then the maxed out card will still have a negative impact.

abc wrote:Another question is, do multiple credit card applications lower your credit score instantly, or is it delayed, or are you allowed to shop around if it's all within a day or two?

Hard pulls have an immediate impact. Shopping around applies to things like mortgages, not credit cards. A lender may use a single pull if you apply for more than one of their credit cards at one time. If you're getting denials then you probably don't want to keep applying as you'll probably just continue to get denials and drop your score.

abc wrote: Am I right in that a high balance will improve my credit score? (Seems counterintuitive, but that's what online Valculators tell me!)

High limit helps. High balance does not. You seem to be aware of this but utilization is balance(s) / limit(s).

abc wrote:Last question, if a credit card says it reports me to the credit bureaus on Oct 3, does it mean my credit score changes on Oct 3rd, or is there a delay?

Bureaus don't instantly update and they don't all update with the same timeframe. TU seems to be slower from what I saw when I was monitoring such things.

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Postby skbenzonline » Fri Oct 10, 2014 2:35 pm

Recently applied to citibank and got approved , my score now is similar to you. Receive 5k credit.

You can do a preapproval check before doing a hard pull. Search for citi preapproval / qualify.

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Postby Berk » Fri Oct 17, 2014 3:36 pm

abc wrote:
My credit rating is actually very important to me, since credit cards have been my main source of income. Low credit rating = no livelihood, short term.


Credit cards are never a source of income - only debt. I do find that logic of yours, flawed. It is this mentality that greatly contributed to the economic crash in the earlier part of this decade.
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Vattené
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Postby Vattené » Fri Oct 17, 2014 4:31 pm

Since this thread has been revived I must say I cringed at that, too! Credit cards are never income. Just because you have a credit limit DOES NOT mean you have that much money to spend.

If the OP sees this, I would be interested to know how the startup has progressed and if much improvement has been made credit-wise by now.
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Postby lobbythis » Fri Oct 17, 2014 4:57 pm

Credit as income? So, you just keep applying for cards until you get denied and the money runs out?

I wonder how many of those crazy loan programs you see on TV the OP has applied for? Maybe some Nigerian scams?

Heaven forbid you ever borrow from the wrong person...you won't have hands to make posts with.



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