FG - fellow readers, we have shared a lot on credit scores. Today we may be seeing a change in our scores due to the new 2008 FICO Score Models that coupled with the unique credit market is taking us down a new avenue in credit standards. Many of us have taken a more cautious approach to applying for credit. I know I went after a Discover Card and they had a suggestion... cool it on the inquirys and come back when some of them have fallen off. My estimate is that until February 2010 when the full Federal Law is in place credit suppliers are going to be strange. Two of my banks sent me notices on my personal lines of credit changing my statement reporting and cutoff dates to allow for the new law requirements. If I didn't like it I could of course opt out of the credit. GADS!

You know Meya it gets frustrating when your at your limit as far as what future cli's can be offered to you. Talked to BOA once again about limit increases and again, no can do because I'm at the limit based on my salary. All I can do now is let my accounts age. I guess I could start "banging" away at my Discover card and start spending/paying off on time but since I have always used my rewards for airline tickets back to the Bay Area I don't know if the cash back option with Discover equates to a better deal than the points earned with my Visa Signature cards. Then there is AMEX. Not a bad way to go really but again weighing one card's rewards against another. I guess it could be worse though...............

Good point!

SMCC - Cool man real cool... Hey hey hey ... you know this is a different credit world. Where a bank may have let it go before, they are watching us like hawks. We need to be cool man real cool... None of us is going to really need to go crazy on spending. Pay down, use cards and be aware that the banks are watching. All of us need to be real cool right now!!!

You know Meya it gets frustrating when your at your limit as far as what future cli's can be offered to you. Talked to BOA once again about limit increases and again, no can do because I'm at the limit based on my salary. All I can do now is let my accounts age. I guess I could start "banging" away at my Discover card and start spending/paying off on time but since I have always used my rewards for airline tickets back to the Bay Area I don't know if the cash back option with Discover equates to a better deal than the points earned with my Visa Signature cards. Then there is AMEX. Not a bad way to go really but again weighing one card's rewards against another. I guess it could be worse though...............

Very good discussion!

Now it makes me really believe that no credit monitoring service knows what goes on in the Bid Dogs (3cb's) house. We all have different monitoring services and have read many blogs about what creditors like to see, and how the scoring system base our credit files, but do we really know? I say that we have examined our credit very closely, and will soon recognize that the best deal is to keep utilizations low, pay on time, and history is the best solution for our credit. You all made good points here, so I think we should just keep sharing our experience with those who have questions because we have been dealing with our credit for so long, and have never came to a 100% result. Just what is best, and what we think they may be looking at...lolz! Thanks you two!

SMCC & Meya - This has been a good refreshing discussion. How I work it is using one of those credit monitoring services (or whatever they are called and then I tried different payoffs/pay downs) to watch as I experimented with outstanding or zero paid balances. Every time (five times) that I totally paid off all my accounts before they reported to the three credit bureaus, I saw my scores drop!!! : If I left some amount outstanding and it didn't have to be much ($200) my scores held or went up. Try this, after opening a new CitiBank Select Platinum Mastercard I transferred a balance of $3,900 without thinking then Citi cutoff and reported the amount to the bureaus. I was sweating that my other creditor's would have a cow. GADS!!! My scores went up and no one noticed! Go figure as my other card balances were zeros. As to my background there are several bank cards, department store cards, one personal loan and an auto loan all for credit mix. My personal banker recommended that I get the mix. It is my hope that this real life scenario helps others. Again I believe it is based on each credit file and the person reported in it. There are guides out in the world and generalizations that apply but our real FICO scores are broken into categories and then further divided out so what exactly works for one person may be slightly different for another person.

You know Meya I try to keep credit balances on my four cards. Not that I don't use them and not that they all have balances at any given time. I agree with you that never using your card and having zero balances might show that you can't handle debt, but what about paying off your balances every month so when all is said and done for that billing period you have a credit balance ?

Maybe you and Wanderer are right, play with your cards, find out what will make your score rise/fall based on amt of debt owed. I always felt Meya, and with credit being as tight as it is, that using your card wisely, paying off your debt within your billing cycle and carrying a credit balance into the next cycle would show your lender and the three CB's that your responsible and don't take your credit lightly.

Credit utilization is also important. Transunion has an online comment that says to stay within 30% of limits. Yet, I have found for me, that staying under 10% makes the lender's smile. I truly believe it is individualized based on what FICO category you fall into and what is actually on your credit record for lending reports, length of credit time, credit mix and nastys! Credit today is almost like playing dice. A "crap" shoot if you will. Can't live by your scores but...?!

Wanderer, I remember posting something like this a while ago. Thanks for mentioning it. I do believe that your scores move according to how well you handle a balance, and that is what creditors like to see. NO one really knows why scores go up and down, that is something that the 3 cb's keep to themselves. There are many stories out there, but like you said, play around with your own credit scenarios, and you will see what makes it go up and down.

Its cool to carry a balance on your cards and let them get a little change off of us, that is a proven track of how you pay back. Having credit cards with no balance is a good thing, but if creditors do not see how well you are handling a balance, and they see no proven record of your balances, they can turn right around and tally up all the free (or available) balance you have, and deny you for having too much available credit. Here is the flip side, they can see that you handle your balance well, but if they see the 50 and 60% util ratio, they will turn right around and deny you for having high utilization.

Scores does go up, when you pay on time, never been late, and stay within your limits. But listen to this, they will drop if you have high util, go over your limits, and will significantly drop if you were late (especially more than once), but at the same time, they will still go up even if you did experience one of the three. I watch my scores drop from high util, as I lowered them, they rose back up. What also helped was that I have been maintaining my accounts well (besides high util) and the scores went right back where they came from and I still have high util.

So what I am trying to say is, you are correct about what you just said. I watches my scores go up, down, and sometimes stay the same for 2 months at a time. I don't know exactly what they are measuring, but I know that carrying a balance has never hurt my scores, its the high util that triggered it and that was only temp. This is why I do not let scores be the main focus when it comes to my credit. Training yourself not to mess up the good thing you have going with your credit is what matters. I know we are humans and the unforeseen is a mother, but through prayer, faith, FG & family, I have been holding on strong.

SMCC There are many schools of thought on the amount to carry. For myself Transunion liked it when I had about 8% debt monthly which in my case was maybe $4,800. Had it spread over four accounts. My problem is I didn't want any debt. Paid it off and my score dropprd from 715 to 703 just two weeks ago. I have played with different amounts and 3% to 8% worked for my credit profile. Note, I said my credit profile. There is still one BK 09/2001 and no dings but the longest credit history is 21 years and the average is 6 years. As you can see it is complicated and very individual by nature. Hope I offered more information than confusion. Yes, it is confusing and I believe the credit models are basically fair but not simple and no one wants us to figure it out!!!

Wanderer, if this is the case and you feel that you have to carry a balance vs a zero balance, then what is acceptable 1/2%, 1%, 1.5% ? I am sure someone will confirm/deny this here but when I check my scores one of the good attributes about my score is that I have such a low credit/debt ratio (1/2 to 1%).

One thing I do know is that when you carry a consistent credit balance on your cards your score rarely, if ever, moves, but given the current economic situation, someone who isn't carrying any credit card balances and has high limits or uses their card and pays the balance off within the billing cycle would be looked upon favorably. Then again, in a perfect world............

HJM SMCC "Hint" zeroing your debt to the three major bureaus will LOWER : your score! I have been experimenting and it happens every time. Your idea of 5% remaining debt sounds good. Doesn't have to be much but the FICO :white-flag:model likes a little current payment debt that get's paid every month. In my mind current activity with no balances sould be the "...cat's meow..." : but NOT is the operative word here. Credit models seem to include some illogic in them!!! Playing the game to see ... Also, we are in approximately thirteen credit rating categories with people of similar background. We are moved between categories as our circumstances change. We could be high scorers in the BK group and after the BK falls off we find we are only in the middle of the pack because we moved into a different group with better credit ratings and our scores decrease when we didn't do anything. The game ... the game ... it is a game. NOTE, we have to play!

I have driven mine less than 6K miles a year and that's what I will do with the 650CI. Lease only works though if you have a good, reliable, go to work car and keep the miles off the lease.

This strategy + proven maintenance is the #1 route to a good resale value!

Have a 06 530I. Love the car young man but want a 65OCI convertible. Plan is to keep the miles low and try to sell it privately, or pay more than the monthly car payment + more to equalize value/loan amt.

Thing is young man, I should have leased a new car, I have driven mine less than 6K miles a year and that's what I will do with the 650CI. Lease only works though if you have a good, reliable, go to work car and keep the miles off the lease.

Anyway, I like your plan, long term and achievable.

smcc, what kind of car are you currently driving? IIRC, it was a BMW 328i?
What car are you looking to purchase after you sell your current car?