vania-janet/multiturn-rag-retrieval-data huggingface dataset:
However, even people who haven't been using credit long may have high FICO Scores, depending on how the rest of the credit report looks. Depending how old your card was, and particularly since this was your only credit card, it will likely impact your average age of credit lines, depending on other lines of credit (loans etc) you have open. This accounts for about 15% of your score, so not as large of an impact as the first two. Credit mix in use (10%) FICO Scores will consider your mix of credit cards, retail accounts, installment loans, finance company accounts and mortgage loans. Given that this was your only credit card, your loan mix has been reduced (possibly to none). New credit (10%) Research shows that opening several credit accounts in a short period of time represents a greater risk - especially for people who don't have a long credit history. This focuses on credit inquiries, which as you mentioned, you will likely have another either re-opening this credit card or opening another at some point in the future. Regardless, paying off the rest of that card is a priority, as interest rates on average credit cards are over 13%, and often higher (source). This rate comes into play when not paying the balance in full every month, and also as @Ben Miller suggested, I would not utilize a credit card without being able to pay it in full. It can often be a dangerous cycle of debt."
Disclaimer: By following these steps you will be triggering at least one hard inquiry against your credit. Each hard inquiry has the potential to lower your credit rating. If you do not plan to use your score to apply for any major loans (e.g. car or house) then this reduction in credit will have basically no impact on your day-to-day life. Assuming you continue using your credit responsibly then your credit should just bounce right back to where it was in no time. I know there are many people out there that cherish their score and relish in the fact that it is so high but it's for moments like these that make it worthwhile to ""spend"" your credit score. It's an inanimate number whose sole purpose is to be ""spent"" in times like these."
With new credit scores tend to be very volatile. It could be something as small as carrying a higher balance or credit inquiries.  Like I mentioned, check Credit Karma to confirm nothing has changed. Also, see your inquiries. That may have impacted your score
There are two very small catches. You have just increased your available credit.  In some cases when you want to make a loan, they will check your available credit against your creditworthiness (your income and credit history). In the short term with a greater credit limit, you may have more difficulty getting a large loan.  On the other hand, your greater credit limit will make you seem more creditworthy (as you have been walking around with the ability to borrow a whole pile and demonstrated the ability to not go bankrupt). The other possible catch is that if something goes wrong and your credit line is maxed (maybe you have a psychotic episode; maybe you give your credit card and pin number to someone who buys a car on you), your liability is larger. If you can maintain spending discipline and don't need every ounce of credit head room right now, neither of these apply.  In the medium to long term, a lower credit utilization and a higher total limit will make you more creditworthy.
The two factors that will hurt you the most is the age of the credit account, and your available credit to debt ratio.  Removing an older account takes that account out of the equation of calculating your overall credit score, which can hurt significantly, especially if that is the only, or one of just a couple, of open credit lines you have available. Reducing your available credit will make your current debt look bigger than what it was before you closed your account. Going over a certain percentage for your debt to available credit can make you look less favorable to lenders. [As stated above, closing a credit card does remove it from the credit utilization calculation which can raise your debt/credit ratio. It does not, however; affect the average age of credit cards. Even closed accounts stay on your credit report for ten years and are credited toward average age of cards. When the closed credit card falls off your report, only then, will the average age of credit cards be recalculated.] And may I suggest getting your free credit report from https://www.annualcreditreport.com . It's the only place considered 'official' to receive your free annual credit report as told by the FTC. Going to other 3rd party sites to pull your credit report can risk your information being traded or sold. EDIT: To answer your second point, there are numerous factors that banks and creditors will consider depending on the type of card you're applying for. The heavier the personal rewards (cash back, flyer miles, discounts, etc.) the bigger the stipulation. Some factors to consider are your income to debt ratio, income to available credit ratio, number of revolving lines of credit, debt to available credit ratio, available credit to debt ratio, and whether or not you have sufficient equity and/or assets to cover both your debt and available credit. They want to make sure that if you go crazy and max out all of your lines of credit, that you are capable of paying it all back in a sufficient amount of time. In other words, your volatility as a debt-consumer.
Patience is the key here, I hate to say! There are five factors to FICO credit scores:  Payment history is adversely affected by late payments - so always pay on time, otherwise your report will be haunted for seven years! 👻 Credit utilization has to do with how much of your available credit is currently in use - lower is better, but 0% isn't good either because they want to see that you're using credit. 10% or less is a good goal, and try to keep any single card balance to 30% or less when its statement close date rolls around. Credit history is based on the average age of all of your accounts, cards or otherwise, the older the better. Don't close either of your other cards (because that would cause your average account age to fall), and make sure to use the store card at least occasionally, because lenders sometimes decide to close unused lines of credit. Credit mix has to do with the different types of credit you hold and is why your bank's website suggested taking out a loan. It also has to do with the number of accounts overall; I've never found a satisfactory answer for what the sweet spot is, but I suspect it's in the 6-12 range? You wouldn't want to get several new ones at the same time because... New credit is affected by the credit inquiries (hard pulls) that occur when you apply for new cards or loans. Inquiries stay on your report for two years before falling off. This is almost certainly where your score dropped. You also mentioned not knowing if some hospital bills are still affecting your score. You'll want to review your credit reports and find out, plus checking your credit reports regularly is a really great habit to get into because errors (and fraud) can and do happen. There are three credit reporting agencies: Experian, Equifax, and TransUnion, and you'll want to review all three. You can get one free report from each of them every year: https://www.usa.gov/credit-reports It can take a couple of months for a new credit account to show up on your credit report, so your score should recover and go even higher once that happens. Sit tight, as annoying as that is!
"If you are the type of person that gets drawn in to ""suspect"" offers, then it is conceivable that if you are not signing the services offered your credit would be improved as your long term credit strengthens and the number of new lines of credit are reduced. But if you just throw it all away anyway then it is unlikely to help improve your score.  But there is no direct impact on your credit score."
"Hard pulls you give your explicit permission to run do affect your credit.  Soft pulls do not. While hard pulls affect your score, they don't affect it much.  Maybe a couple few point for a little while.  In your daily activities, it is inconsequential.  If you are prepping to get a mortgage, you should be mindful. Similar type hard pulls in a certain time window will only count once, because it is assume you are shopping.  For example, mortgage shopping will result in a lot of hard pulls, but if they are all done in a fortnight, they only count against once.  (I believe the time window is actually a month, but I have always had two weeks in my head as the safe window.) The reason soft pulls don't matter is because businesses typically won't make credit decisions based on them.  A soft pull is so a business can find a list of people to make offers to, but that doesn't mean they ACTUALLY qualify.  Only the information in a hard pull will tell them that.  I don't know, but I suspect it is more along the lines of ""give me everybody who is between 600 and 800 and lives in zip code 12344"" not ""what is series0ne's credit score?"" A hard pull will lower your score because of a scenario where you open up many many lines of credit in a short period of time.  The credit scoring models assume (I am guessing) that you are going to implode.  You are either attempting to cover obligations you can't handle, or you are about to create a bunch of obligations you can't handle. Credit should be used as a convenient method of payment, not a source of wealth.  As such, each credit line you open in a short time lowers the score.  You are disincentivized to continue opening lines, and lenders at the end of your credit line opening spree will see you as riskier than the first."
Good credit is calculated (by many lenders) by taking your FICO score which is calculated based upon what is in your credit report. Building credit generally means building up your FICO score. Your FICO score is impacted my many factors, one small one of which is your utilization ratio of your installment loans like student loans. This is the ratio of the current balance to your original balance. To improve your score (slightly) you would want a lower ratio. I would recommend paying your student loan down to 75% ratio as fast as you can and then you can go back to $50/month. A much better way to improve your FICO score is to have revolving credit. Your student loans are not revolving, they are installment loans. Therefore, you should open at least one credit card (assuming you currently have none) right away. The longer you have had a credit card open, the better your FICO score gets. Your revolving credit utilization ratio is way more important than your installment loan ratio. Therefore, to maximize your FICO, try to never have more than 10% utilization on your revolving credit report to the credit bureaus each month. Only the current month's ratio affects your score at any given moment. You can ensure you don't go above 10% by paying your balance before the statement cuts each month to get it below 10% way before any payment would be due. (You should always pay your remaining credit card statement balance in full each month by the due date after the statement cuts to avoid any interest charges.) Note that there is a slight FICO advantage to having at least one major bank credit card instead of just only credit union credit cards. Also, never let all your revolving credit report a zero balance in a month, you must always have at least $1 reporting to the credit bureaus on at least one of your open credit cards or your FICO score will take a big negative hit. If you cannot get a normal credit card, go to a credit union and find one that offers secured credit cards, or a bank that does. A secured credit card is where you place a deposit with the bank that they hold and give you a credit limit to match your security. Ideally it would be a card that graduates to unsecured after your demonstrate good history with them.
"It won't hurt your credit score, but it may hurt your ChexSystems score. ChexSystems is another consumer reporting agency that doesn't keep track of your debts, but of your bank accounts. Banks (most but not all) check ChexSystems before you open an account to see if you bounce checks, overdraft, make a lot of teller visits, lose ATM cards, etc. They use this to estimate your profitability. Banks aren't allowed to discriminate against a protected class, but ""unprofitable"" is not a protected class. BTW, most banks don't make much money on checking accounts; they view them as ""get-you-in-the-door"" inducements so they can sell you the things they really want to like mortgages and investments."
I'm going to be buying a house / car / home theater system in the next few months, and this loan would show up on my credit report and negatively impact my score, making me unable to get the financing that I'll need.
This strategy will have long lasting effects since negative items can persist for many years, making financing a home difficult, the primary source of household credit. It is also very risky.  You can play hard, but then the creditor may choose you to be the one that they make an example out of by suing you for a judgement that allows them to empty your accounts and garnish your wages. If you have no record of late payments, or they are old and/or few, your credit score will quickly shoot up if you pay down to 10% of the balance, keep the cards, and maintain that balance rate. This strategy will have them begging you to take on more credit with offers of lower interest rates.  The less credit you take on, the more they'll throw at you, and when it comes time to purchase a home, more home can be bought because your interest rates will be lower.
After doing some investigating, my employers contract with the credit card company has a clause that basically specifies that despite my name being on the credit card, and bills being sent to me, all liability is on the company. Additionally, the employer reserves the right to garnish wages in the event of a balance on the card. So it looks like it won't affect my credit score. I appreciate all of the advice.
This shows the impact of the inquiries. It's from Credit Karma, and reflects my inquiries over the past two years. In my case, I refinanced 2 properties and the hit is after this fact, so my score at 766 is lower than when approved. You can go to Credit Karma and see how your score was impacted. If in fact the first inquiry did this, you have cause for action. In court, you get more attention by having sufficient specific data to support your claim, including your exact damages.
"The following is based on my Experian credit scoring feedback and experience here in the UK over many years. (And for further information I currently hold a credit score of 999, the highest possible, with 6 credit cards.) Now I'm assuming that while there may be some differences in particulars in your case due to the difference in locality nevertheless the below should hopefully provide some broad guidelines and reasonable conclusion in your situation: Having a large number of active credit accounts may be seen as a negative. However having a large number of settled accounts should on the contrary have a positive effect on your score. As you keep your accounts mostly settled, I think having another card will not be to your detriment and should in time be beneficial. A large total credit balance outstanding may count against you. (But see the next point.) Having your total outstanding debt on all credit accounts be a smaller proportion of your total available credit, counts in your favour. This means having more cards for the same amount of credit in use, is net-net in your favour. It also has the effect of making even larger outstanding credit balances (as in point 2) to be a lower percentage of your total available credit, and consequently will indicate lower risk to lenders. It appears from my experience the higher the highest credit limit on a single card you are issued (and are managing responsibly e.g. either paid off or used responsibly) the better. Needless to say, any late payments count against you. The best thing to do then is to set up a direct debit for the minimum amount to be paid like clockwork every month. Lenders really like consistent payers. :) New credit accounts initially will count against you for a while. But as the accounts age and are managed responsibly or settled they will eventually count in your favour and increase your score. Making many credit applications in a short space of time may count against you as you may be seen to be credit reliant. Conclusion: On balance I would say get the other card. Your credit score might be slightly lower for a couple of months but eventually it will be to your benefit as per the above.
No. Credit scores are primarily built by doing the following: To build credit, get a few major credit cards and a couple of store cards. Use one of them to make routine purchases like gas and groceries. Pay them on time every month. You're good to go. I would hate to sell stocks to pay off a loan -- try finding a better loan. If you financed through the dealer, try joining a credit union and see if you can get a better rate.
You don't need a credit score. After I paid off my house mortgage many years ago I had this discussion with my mortgage agent (now bank VP). Your credit score is not a measure your ability to repay. It is a behavioral model and a statistical measure of the likelihood that the banks will make money off of you when they give you a loan, and a marketing tool that the banking industry uses to sell you long term and short term debt (mortgages and credit cards). Statistically speaking, people who close out major loans change their behaviors, and the model captures this change in behavior. In my own case, even though I have a credit history and sufficient cash is the bank to buy my next home outright, I have no credit score . What the model says is that people with my behavioral profile are not likely to take a loan, and if they did take one, they would pay it back so quickly that the bank would not even recoup the cost of initiating the loan. In short, people with my profile are bad news for the loans side of the bank. Thanks @quid for suggesting I capture this and post it as an answer
I think you got the message mixed up a little: Racking up big balances can hurt your scores, regardless of whether you pay your bills in full each month.   What's typically reported to the credit bureaus, and thus calculated into your scores, are the balances reported on your last statements. (That doesn't mean paying off your balances each month isn't financially smart -- it is -- just that the credit scores don't care.)   You typically can increase your scores by limiting your charges to 30% or less of a card's limit. -- from 7 Ways to Fix Your Credit Score In other words, ALWAYS pay off your balance if you can. But don't fill up your card to the max of your credit limit each month. i.e. if your credit limit is $5000, only spend $2000 each month.
"TL;DR:  It doesn't matter.  At a point of sufficient credit score, your income is far more important, for loan approval, than your credit score. Apparently this was a big mistake because it caused my score to drop to 744 Not really, except for the questionability of opening a margin account.  A credit score of 744 is sufficient for the best rates. Credit score algorithms are dynamic and advice that may have been good in years past may not be applicable today.  Pay your bills and don't have unnecessary credit, that will lead to your best credit score.   For me, despite not following conventional wisdom, I am ""enjoying"" the highest credit score of my life.  I have closed accounts that are just unnecessary and have done some other things that the experts say I should not do to keep a high credit score. However, all that doesn't matter.  I do not have a need for credit and will likely never have a need beyond my rebate card.  I feel like this is also true for you.  What difference does it make if you have an 822 or a 744?  Probably none.  At that point, your income counts more toward loan eligibility."
Always pay on time, and stop listening to whoever is telling you not to -- they are clueless. Credit cards are revolving accounts with a grace period. The balance owed is due on the statement date, and you have a grace period of 20-40 days to pay.  Paying bills on time is the single most important thing that you can do to have a good credit score. Always pay on time.
If you don't need to own a car for other reasons (i.e. if you are perfectly fine using Lyft and public transport), a new car loan should have just as much effect on your credit score as, say, opening a new credit card. Your credit score would take a temporary dip because of the hard inquiry to acquire the card, but your number of credit accounts would increase, and your credit utilization rate would go down, both of which are good things for your credit score. There may be better ways to increase your credit score that others know about, but I don't think getting a car loan when you don't need a car is the best one. Note, this assumes that you are paying all your credit cards off in full every month.
A) The Credit Rating Agencies only look at the month-end totals that are on your credit card, as this is all they ever get from the issuing bank. So a higher usage frequency as described would not make any direct difference to your credit rating. B) The issuing bank will know if you use the credit with the higher frequency, but it probably has little effect on your limit. Typically, after two to three month, they reevaluate your credit limit, and it could go up considerably if you never overdrew (and at this time, it could indirectly positively affect your credit rating). You could consider calling the issuing bank after two month and try to explain the history a bit and get them to increase the limit, but that only makes sense if your credit score has recovered. Your business paperwork could go a long way to convince someone, if you do so well now. C) If your credit rating is still bad, you need to find out why. It should have normalized to a medium range with the bad historic issues dropped.
Assuming that a person has good financial discipline and is generally responsible with spending, I think that having a few hundred or thousand dollars extra of available credit is usually worth more to that person for the choice/flexibility it provides in unforeseen circumstance, versus the relatively minor hit that could be taken to their credit score.
&gt; If everyone on average gets say...a ~3% boost on their score, why wouldn't banks just adjust their standards by 3%?  Because the score change only affects those who have had delinquent payments (but are current now) on medical debt in the past 7 years.  That's not everybody... by a long shot.  Also, no lender (except possibly automated consumer debt applications) gives a shit about what your actual score is.  Mortgage lenders review each application based on things like debt:income, existing installment payments, and actual credit history (meaning account details and repayment history).