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Question By
andsoitgoes10

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Credit Utilization and Mortgage
Hello, I built up my score to over 800 FICO on all three reports,. I now have a 7% utilization on $75,000 of credit. I recently got a divorce and my ex is taking me off a joint card, which is $17,000 of the $75,000 credit available. How is this going to hurt my score? I anticipate getting a mortgage in the near future and wonder if it is worth getting another card to up my credit availability. Of course, this would add a credit inquiry, but it may be worth it.

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Credit utilization

many factors involved, how old is your credit history? if over twenty years and less than four inquiries you can apply, however divorces scare creditors, if filed this can impact your score for seven years, and the first two years you cant get more credit unless it is secured. This is what happens, the agencies do not disclose this but this is the truth. I would just sit back and not apply. Good luck to you.

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Reply by
Revelate

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Minimally, it's not as if you're losing ~60K worth of credit limit and suddenly maxxed out on the remaining lines.

Honestly one can always simply manage one's balances by paying ahead of the statement date: applying for a new credit card to change the revolving utilization metric is typically a poor reason to pick up a credit card.  

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most everything everyone should KNOW

I am a 44 year old male; I have extensive knowledge on the subject of Credit and credit reports, and finances I also have the advantage of growing up and seeing the changes and learning how credit reporting agencies evolved over the last 26 years. Fair Isaaic thru Vantage score and all models in between. Credit reports account for demographics; how they get around the laws, and discriminate against people of different strokes, instead of race they simply use zip codes and which businesses occupy those areas. Too many pawn shops or liquor stores, Quiky Marts etc. in area equal low score, many banks in area equal high score. They can not discriminate on the basis of race and gender but they do it from behind the numbers. I have personally seen this happen with myself and friends and family who came to me to help them with their scores.I have lived in 22 places around mainland and Hawaii, great areas and poor areas, This is just one credit criteria. 2nd criteria is stock market and interests rates based on Libor index, basically a super large casino taking bets rather you pay or not pay, banks and investment firms place bets on you and your friends, if you pass or not pass such as the game Craps. They hide this thru very complex math formulas and algorithms, so the average justice dept can't trace fraud. Remember a four year Degree and masters is usual for stock brokers and high end employees at firms, many are lawyers. Police usually come from military and military comes from common people. Not to say, all are under educated, or naive, but it is safe to assume this by the facts. 3rd Credit reports use, age of client, ages 30 to 55 best scores and 55 y.o. to 115 y.o if and only if they have a home paid off. If a 55 year old reaches that age with out a home or property the score drops significantly. Reason is client will likely die soon and is not responsible enough to plan for future and is a major risk for default, while people who have homes can use to secure low interest equity lines to pay off credit debt. There are 155 more terms and criteria they use for the algorithm and based on this determine your score. Some models like high interest and high balances, this makes good money and fast for investors however very risky for banks. Many loan sharks prefer this; banks have to answer to stock holders, and the FDIC and many other watch dog groups that regulate banks. The Federal max interest charge is 35 percent which is why you do see a lot of businesses that serve high risk people, such as Title loans and pay day loans.

 The best score possible, career for ten or more years in same profession, and owning property, have no more than four premium credit cards with minimum 15,000 lines, use them a lot and pay off balances every third time. If one were to pay off debt every month no earned money for the investor of said bank. Its best to carry a medium to medium high balance and pay it down quickly and completely no more than two years max. Make sure you get an accurate credit report from all three Credit bureaus. For beginning credit, I recommend keeping all accounts that you can afford open indefinitely. One installment loan, such as car and or a student loan, furniture loans are least effective, reason is most furniture places do not report credit limit, only what you have actually have borrowed and bought. If you pay it off with in six months or a year and you did not incur any finance charges, the creditor doesn’t make any money on you. They report the account paid in full and the months you paid, but it lowers your credit score history and while loan is out it is killing your utilization score. For example you take out a loan for 1595 for a new couch. You are offered a credit line of $5000 but you only use $1595. On the credit report if they report shows high limit $1595.00 and balance owed $1595.00, 100% of credit line, that is very bad for credit score, they now have lowered your credit score first by a credit inquiry, secondly by a new account and high utilization, this will lower your score by thirty points or more. If you pay it off by terms of contract, your credit score reflects paid, which increases your credit score by 15 points, you are still down 15 points or more, problem is this account destroys your utilization score and new accounts score and length of credit history, and the inquiry takes two years to fall off your Credit report. Credit reporting agencies especially Experian only hold the score down for one year, for inquiries. Capital One and only Capital One is the only credit card to get period for rebuilding credit; all others will hurt your score. Wait until your score gets high enough to apply for Capital One only, if turned down wait another six months and apply again. I do not recommend secured credit cards, because it will always say on credit report “SECURED” until account is closed and paid off about seven years later. Even if the card is later converted to UNSECURED it will report it was once a secured card, so 15 years down the road, banks and businesses can see that you had horrible credit.  Just wait to you qualify for an unsecured card. One last option is to buy a car or small truck at a dealership only. Used car lots do not always report and many people get hurt by used car lots. This info is accurate from 1987 to 2/27/15. The future we do not know.

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