My Credit Score Lowered by Chase Signature Credit Card
Guest: hdporter
Credit Expert (100+ Posts)
Post subject: My Credit Score Lowered by Chase Signature Credit Card
Posted: Mon Jun 19, 2006 7:07 pm
My new Chase Signature account just started reporting. It reports "high balance" -- not "limit". Based upon the change in my credit scores in the last 30 days, I estimate the consequence of the reporting has been to lower my scores by about 10 pts.
I look to run the account up to near its limit over the next couple of months.
- Harry
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Guest: spjoink
Credit Expert (100+ Posts)
Posted: Mon Jun 19, 2006 7:35 pm
Would you please be so kind and explain how you came to that conclusion?
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Guest: hdporter
Credit Expert (100+ Posts)
Posted: Tue Jun 20, 2006 12:59 am
Quote:
Would you please be so kind and explain how you came to that conclusion?
Ok, upon further consideration I'll take back the statement re the effect of this reporting on my scores.
My initial impression was based on the fact that my TU FICO (reported by myFICO) dropped from 725 to 705 in the last month. The signficant changes to my report were the addition of 1 hard inquiry and the reporting of 2 new accounts. It originally seemed to me that an effect of 20 pts was excessive for these factors alone.
However, upon further investigation, it appears quite likely that the impact of these 3 transactions on the New Accounts score factor (10%) is sufficient for a 20 pt drop.
Also, upon scrutinizing my report more carefully, the new Signature VISA account is reporting as an "Open" account (similar to Green Amex), not as a Revolving account. This, of course, makes a considerable difference and distinguishes the reporting from that of Capital One, for example. (FWIW, the minimum statement payment due is reporting.)
------
btw, I've taken some pains in the last few weeks to stress that credit scores obtained via Equifax are true FICO scores. This was further confirmed when I pulled reports/scores via both today and the scores were identical (718).
I now rank myself as a credit score junkie -- a little to my disappointment. At one time I had hoped I wouldn't join those who obsess over their credit score. However, I've been frustrated this past year in being a little clueless as to what significantly impacts my score and by how much. I figure taking a few months and pulling very specific information would be worthwhile as an education investment -- an experience that I hope will be beneficial to share with others.
- Harry
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Guest: guessindigo
Credit Expert (100+ Posts)
Posted: Tue Jun 20, 2006 12:25 pm
hdporter, if you have 2-3 high limit cards reporting the credit line, it is not going to hurt your fico score to hide the revolving credit access line on your signature cards. My score is not affected positively or negatively, in fact, it provides a shelter to hide ALOT of available credit that you can tap into in an emergency. Also, you can always call chase at any time and ask them to report the access line.
YMMV, but I don't want lenders seeing an additional 40-50K of available credit. Of course, this is only good if you already have an established credit history. By the way, if a bank/mortgage co/car loan/ etc asks why the revolving line does not report, I have found that one call to customer service and they will talk to those people and let them know that it is their highest level card and they really back you up when needed.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Guest: hdporter
Credit Expert (100+ Posts)
Posted: Tue Jun 20, 2006 1:36 pm
I understand what you're saying, guess. However, I very much think it's the case that "Open" accounts are not evaluated for credit score purposes in the same manner as "Revolving" accounts.
"Open" accounts, by definition do not have a limit (the fact that VISA Signature accounts do have a limit blurs the line a bit, but FICO and other models will treat it as an account without a limit). It's my guess that, unlike a revolving account where no limit is reported, a utilization calculation isn't performed on an "Open" using the reported high balance. In fact, I expect these accounts are omitted from the utilization calculation all together. Were that not the case, I'd look for some account holders to get dinged badly.
Further information on this topic is needed.
- Harry
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Credit Expert (100+ Posts)
Post subject: My Credit Score Lowered by Chase Signature Credit Card
Posted: Mon Jun 19, 2006 7:07 pm
My new Chase Signature account just started reporting. It reports "high balance" -- not "limit". Based upon the change in my credit scores in the last 30 days, I estimate the consequence of the reporting has been to lower my scores by about 10 pts.
I look to run the account up to near its limit over the next couple of months.
- Harry
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Guest: spjoink
Credit Expert (100+ Posts)
Posted: Mon Jun 19, 2006 7:35 pm
Would you please be so kind and explain how you came to that conclusion?
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Guest: hdporter
Credit Expert (100+ Posts)
Posted: Tue Jun 20, 2006 12:59 am
Quote:
Would you please be so kind and explain how you came to that conclusion?
Ok, upon further consideration I'll take back the statement re the effect of this reporting on my scores.
My initial impression was based on the fact that my TU FICO (reported by myFICO) dropped from 725 to 705 in the last month. The signficant changes to my report were the addition of 1 hard inquiry and the reporting of 2 new accounts. It originally seemed to me that an effect of 20 pts was excessive for these factors alone.
However, upon further investigation, it appears quite likely that the impact of these 3 transactions on the New Accounts score factor (10%) is sufficient for a 20 pt drop.
Also, upon scrutinizing my report more carefully, the new Signature VISA account is reporting as an "Open" account (similar to Green Amex), not as a Revolving account. This, of course, makes a considerable difference and distinguishes the reporting from that of Capital One, for example. (FWIW, the minimum statement payment due is reporting.)
------
btw, I've taken some pains in the last few weeks to stress that credit scores obtained via Equifax are true FICO scores. This was further confirmed when I pulled reports/scores via both today and the scores were identical (718).
I now rank myself as a credit score junkie -- a little to my disappointment. At one time I had hoped I wouldn't join those who obsess over their credit score. However, I've been frustrated this past year in being a little clueless as to what significantly impacts my score and by how much. I figure taking a few months and pulling very specific information would be worthwhile as an education investment -- an experience that I hope will be beneficial to share with others.
- Harry
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Guest: guessindigo
Credit Expert (100+ Posts)
Posted: Tue Jun 20, 2006 12:25 pm
hdporter, if you have 2-3 high limit cards reporting the credit line, it is not going to hurt your fico score to hide the revolving credit access line on your signature cards. My score is not affected positively or negatively, in fact, it provides a shelter to hide ALOT of available credit that you can tap into in an emergency. Also, you can always call chase at any time and ask them to report the access line.
YMMV, but I don't want lenders seeing an additional 40-50K of available credit. Of course, this is only good if you already have an established credit history. By the way, if a bank/mortgage co/car loan/ etc asks why the revolving line does not report, I have found that one call to customer service and they will talk to those people and let them know that it is their highest level card and they really back you up when needed.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Guest: hdporter
Credit Expert (100+ Posts)
Posted: Tue Jun 20, 2006 1:36 pm
I understand what you're saying, guess. However, I very much think it's the case that "Open" accounts are not evaluated for credit score purposes in the same manner as "Revolving" accounts.
"Open" accounts, by definition do not have a limit (the fact that VISA Signature accounts do have a limit blurs the line a bit, but FICO and other models will treat it as an account without a limit). It's my guess that, unlike a revolving account where no limit is reported, a utilization calculation isn't performed on an "Open" using the reported high balance. In fact, I expect these accounts are omitted from the utilization calculation all together. Were that not the case, I'd look for some account holders to get dinged badly.
Further information on this topic is needed.
- Harry
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
posted by CardRatings.com at 4:47 PM
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