Affect of credit cards on credit scores?

[PTWhatAGreatForum]

I am interested in feedback on the following:

1. Veda uses a credit scoring system up to 1,000 points where ~600+ is in the green. FICO scores go up to 850 points. I'm assuming based on the more conservative banking world here that after a certain score point, it may be quite difficult to get higher?

What is the normal range of green scores here?

2. Although getting a credit card costs a few points upfront, with FICO it can actually add a big chunk of points once it starts being used within it's limit. Is this the same here?

3. What is the ideal credit card utilisation level (ie: percentage of total credit limit)?

4. Are New Zealand banks actively reporting to Veda etc?

5. If they are - is this reported at balance (statement) date or after due date?

[Nick G]

I know that banks look at your limit when assessing CC's but I don't use one so can't advise beyond that.

[Bobsyouruncle]

US system is quite different Michael as you may know. We help our clients build credit ratings in the USA and it's just a big game really. Mine is 830. You just have to know how to play their game. NZ is much more "real" I think being smaller and more computerised.

[PTWhatAGreatForum]

The last credit check I got a copy of (April this year) showed a score in the green zone but I think there is room for it to go a bit higher and I am trying to work out how to do this. I have no recent credit beyond normal monthly accounts (none of which apparently ongoing-reported anyway) so I applied and was approved for a credit card with my bank.

I'm hoping by doing this to increase my credit score and give any future lending a bit more boost then simply just good account history and no "adverse" information.

Failing that, I get pretty well rewarded as it is a "Platinum" card.

[MikeO]

Majority of NZ credit scores are based solely on 'negative' credit information (adverse events such as defaults, judgements, collections, along with details of previous enquiries). This compares with 'comprehensive' credit information (including details such as is your credit card up to date) that form a big part of US credit scores. Comprehensive credit reporting is only in its infancy in NZ (access is restricted to utilities and registered credit providers on a 'reciprocal' basis - i.e. you can only access the comprehensive part if you also provide your data to that credit bureau). To further complicate it there are three credit bureaus in NZ and not every bank or utility list their data with all or the same bureau (if at all).

Upshot of this is you are basically wasting your time trying to influence your credit score by managing your credit card spend. Aside from the initial enquiry when you applied for your credit card having or not having the card will have no impact on your main credit score (which is a negative score). note also that the initial enquiry is just as likely (if not more likely) to be favourable to your main credit score rather than unfavourable although that would depend how many other applications are listed on your file).

[PTWhatAGreatForum]

although that would depend how many other applications are listed on your file).

Thanks for your helpful info.

Personal credit checks this year:

1. Bank - Business merchant services - they check both company and personal (approved) - x2. (side note: unfortunately unless applications are made together they credit check each one - my business applied for credit cards and eftpos separately)

2. Utility company - home delivered gas account (approved)

3. Bank - Credit card (approved)

That's all I know of.

[Don't believe the Hype]

Why on earth do you spend so much time on 'improving' your credit score?

Your credit rating should be managed as not being a barrier to getting the sort and level of credit you need... Beyond that you're wasting your time and energy thinking about it.

[PTWhatAGreatForum]

Why on earth do you spend so much time on 'improving' your credit score?

You are reading far too much into this thread. Yes, everything I said is real. This doesn't mean it's a biggie.

On that subject credit exposure is a tangible issue to lenders. It's also been discussed on these forums before.

[Learning]

I've always had 4-6 credit cards totalling $80k-$120k pretty much permanently maxed and never had an issue getting the home loans I need at great rates.

[andyp2010]

Sounds like you're playing a dangerous game there Learning!

I'm with DBTH, I don't think it'll have much effect on the rates you pay or what's offered to you unless it's a bad score.

[Bobsyouruncle]

In America it would kill you maxing them out all the time, your score would get worse and worse.

[PTWhatAGreatForum]

John Ulzheimer on Credit Score Myths Video

[propertybuyingNZ]

I have recently signed up for all 3 credit score providers and requested up to date credit files.

Result: none (!) of them store the debt level of any given credit cards. They store the max balance but no info about how much debt are on the cards.
(and some of them did not even have all the CCs listed I have)

[Anthonyacat]

Yep, that's the current reporting regime. If you have ever missed a payment you would expect them all to know, but otherwise their information is pretty meaningless.

Most of the time they won't know when you cancel a card, either. How would they?

[Learning]

Sounds like you're playing a dangerous game there Learning!

I'm with DBTH, I don't think it'll have much effect on the rates you pay or what's offered to you unless it's a bad score.

I recently got my credit reports from the 3 agencies. Only one of the reports shows all my cards. It only shows the limits of two of them and makes no mention of how heavily they're loaded. The other two reports show only the same two cards and their limits but again makes no mention of their loading. They all show that I've kept up with payments.

Andy, why would DB's report only show two of my cards?