Is My Capital One Card Lowering My Credit Score, & What Can I Do About it?

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dk11
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Is My Capital One Card Lowering My Credit Score, & What Can I Do About it?

Postby dk11 » Tue Nov 09, 2010 3:40 pm

I applied for and received my first independent credit card in in December 2008 which was a Capital One Platinum Card. Right before I got my Capital One Card my score was in the low 700s and had 2 older unpaid debts which I have since taken care of. As of today with no hanging debts, and all my payments being paid in full 95% of the time my credit score is 640.

At first I thought that after applying for 3 different cards and being denied all 3 that this was the reason for my score being significantly lowered. But it has been over 8 months since I last applied for a new card and my score is still much lower than I hoped. Needless to say I'm pretty unhappy about this.

So to the experts... Is simply having a capital one card and using it lowering my score, and what can I do right now to shoot my score back up in the next few months?


jeffysdad
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Postby jeffysdad » Tue Nov 09, 2010 4:23 pm

I doubt it's the cap one card unless they're reporting negative items. I had a cap one card for a few years with a perfect payment record. I recently closed it because they would not honor my repeated requests to stop sending balance transfer checks in the mail. My score went down a few points shortly after I closed it. So I can only assume the cap one history was helping my score. I would look for other things that might be affecting your score.
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Mogul of Pineapples
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Postby Mogul of Pineapples » Wed Nov 10, 2010 1:15 am

I also doubt Capital One is responsible for this in anyway.

What is your credit limit and how much of your credit limit would you use? Using 25% or higher can negatively impact your credit.
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dk11
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Postby dk11 » Wed Nov 10, 2010 8:47 am

My limit is $1,000, which I'd really like to raise. So are you saying that my score will improve by spending no more than $250 per month? I'm curious as to why that is. Wouldn't my score improve by paying a higher balance in full every month?

DoingHomework
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Postby DoingHomework » Fri Nov 12, 2010 12:55 pm

That's right, your score is low for two reasons: high utilization and too many credit inquiries.

Every time you apply for a card it creates an inquiry. Those stay on your report for 2 years normally. Having 3 inquiries in 2 years is a minor hit but you definitely want to wait another year or so before trying again.

Your utilization has a bigger impact. If you have a $1000 limit then the maximum you should ever charge is about $250.

JL70
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Postby JL70 » Fri Nov 12, 2010 1:56 pm

dk11 wrote:My limit is $1,000, which I'd really like to raise. So are you saying that my score will improve by spending no more than $250 per month? I'm curious as to why that is. Wouldn't my score improve by paying a higher balance in full every month?


High score achievers have UT at about 9%. And a mix of credit cards and credit types. If you don't have negative information on your reports, PIF your card on one month and let them report zero balance to th Agencies, most probably your score will bump back to the 700s, then you can apply for a couple other cards, that way you have more room to play with your UT ratio.
Inquiries more than a year has the lesser impact on your score.

http://www.myfico.com/CreditEducation/ImproveYourScore.aspx

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Cucumber
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Postby Cucumber » Fri Nov 12, 2010 3:26 pm

9%??? I thought anything under 25% was good?

:confused:
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