As I have said before, I can see how my readers find GlobCredit.com. I don't collect any personal information, but I can see search terms that people use to find the site. This information is like the center of Lifesavers candies. Or doughnut holes. Rather than letting them fall by the wayside, I figure that I should put these search queries to good use.
Here are the game rules: I will edit search queries for syntax purposes. Otherwise, I will leave them alone. I'll also phrase queries in the form of a question whenever possible. By request, these Q&As will now be published whenever I have received 10 questions (through Google, Yahoo, and AOL searches).
Q: How to increase limit with Juniper card?
A: Juniper is very quirky. In the past, the company has said that if you want a credit-limit increase, you'll need to have $250,000 in income. Seriously. I laugh every time I think about it. What Juniper is really saying is that we don't grant customer-initiated credit-limit increases. Instead, it evaluates your record on a regular basis, and grants limit increases on its own.
Q: What happens when American Express account goes in default?
A: American Express can immediately call your outstanding balance due. Officially, this is what American Express says: "we may require payment of a portion of your outstanding balance greater than the total minimum amount due, declare the entire amount of your obligations to us immediately due and payable, and/or suspend or cancel your account, any component of your account, and/or any feature that may be offered in connection with the account."
Additionally, the company could also initiate collection proceedings. Meanwhile, you agree to pay all reasonable costs associated with those collection efforts.
Q: Does having more credit available mean higher FICO score?
A: Not necessarily. Having a lot of available credit, in and of itself, doesn't guarantee anything. To be sure, having a low utilization ratio definitely helps your score. But it's just one component of the FICO score (link here).
What's more, the question is really asking whether having a lot of credit results in a higher score. The short answer is no. I know plenty of people who have a lot of credit. But they also use a lot of that credit (resulting in high utilization ratios). The best way to boost your score is to not utilize a lot of your available credit.
Q: What is the average FICO sore?
A: I've seen several numbers bandied about. I've seen 678, 686, 692, and other scores in the high 690s. I have my doubts, though, about whether those are actually average FICO scores. My guess is that they're fake scores that have nothing to do with FICO.
I pay attention to the figure that Fair Isaac, the creator of FICO, uses. Fair Isaac says that 723 is the median (half above the score and half below). Until I see Fair Isaac come out with an "average" score, I'll stick with the median score.
Q: Is the Merrill Lynch Visa card tough to get?
A: I personally don't think it's that tough to get. I've seen friends with low 700 scores get approved for the Merrill + Visa card. See my write up on the card (link here). What's more, I have seen these very same people get initial credit limits of $10,000 and above.
Q: Combining my Washington Mutual and Chase credit cards?
A: Even though Chase has acquired Washington Mutual, there is no guarantee that Chase will be keeping the Washington Mutual credit card portfolio. I think we all assume that Chase will keep a portion of the portfolio, but there's no guarantee. That said, nothing is happening right now. I would not expect the two card platforms to be merged for at least a year (at the earliest). Chase has a Q&A (link here) that should be read by all Washington Mutual customers.
Q: Is it possible to get a perfect credit score of 830?
A: This person must be talking about the Plus score, which ranges from 330-830. It's a score that was developed by Experian (link here). What's more, it's a score that should not be relied upon. Most lenders use FICO scores when making lending decisions. They do not use PLUS scores. For more on scores that are not used by lenders, see my story on FAKO v. FICO (link here).
But to answer the question: it's theoretically possible to get a perfect score of 830 on the Plus score.
Q: I pay the bill in full each month and it does not help FICO.
A: Ahh, I see this one a lot. Even though people pay their bills in full each month, the balances still get reported to the credit bureaus. Remember, even though you pay in full, the balance, when the billing statement gets generated, still gets reported to the credit bureaus. If you are using a lot of your available credit each month, you can still be hurt -- even if you do pay in full.
Here's how it happens. You have four credit cards. Each has a $1,000 limit. You make purchases of $800 on each of the cards during the month. When the bill arrives in the mail, you immediately pay the $800 that is due on each card. Great, right? Not exactly.
Even though you are paying your bills in full each month, you are using 80% of the available credit. As a result, your FICO score is likely getting hammered. As a general rule, it's best to keep utilization at less than 30%. I personally believe that people should use no more than 10% (which is also better for scores).
If you are running into this scenario, you should probably ask for a credit-limit increase. It's clear that your credit limits are not high enough for your usage pattern. I'd call the credit card company and tell them that you pay in full each month (they'll know this). Also tell them that you are nearly always maxed out on the card because the limit is too low. This is hurting your FICO score. If your card companies are unwilling to give you a limit increase, then you'll need to do one of two things. You can either not use the card as much (keeping the utilization ratio down), or you can make payments on the card during the month (during the middle of the billing cycle) -- so that the balance that gets reported to the credit bureau is lower.
I'd rather have a higher limit than have to keep making payments during the month.
Q: Why does my FICO score that WAMU provides me not match the credit scores from the 3 credit bureaus?
A: My guess is that this reader wants to know why the FICO score provided by Wamu does not match the scores from FICO. I have written a nice story (link here) on the topic, which should answer this question nicely.
Q: What to do with credit cards that I am not planning to use anymore?
A: It depends on how old the cards are, whether there are annual fees, how high the limits are, etc. The reader is probably trying to figure out whether it makes more sense to close the cards or whether it makes more sense to leave the cards open -- and toss the cards in the sock drawer. My rule of thumb is to leave the accounts open and just toss the cards in the sock drawer. Of course, you'd also want to use the cards on occasion so that they are not closed for inactivity. Read this story on how closed accounts affect your FICO score (link here). After that, you'll be better informed.
READER ALERT: For more credit questions and answers, the entire 10 Credit Questions & Answers index can be found here (link).