How Badly Credit Arbitrage Affects Your Credit

[Credit Ranker]

I know that the amount of debt that you are holding affects your credit score but I am just curious how badly credit arbitrage affects one's score. It's shouldn't be as bad as paying your bills late, right?

[CB Owners]

Welcome to CreditBoards! We hope that you find what you're looking for here.Some helpful tips:

• Your post may not get a reply right away. Don't be discouraged, this is a very busy board. If it falls off of the first page, feel free to reply to your post yourself, with the word *bump* in the text. This will *bump* your post back up to the top of the board.
• If you haven't yet, take a peek at out Newbies Section. Everything that you need to know is in that forum, for the most part! It's a lot of reading, we know, but this credit stuff can have a steep learning curve. In no time, you'll be posting like the pros!
• If you find that someone is discourteous to you, use the REPORT button at the bottom of every post - that will ensure that a moderator or admin looks at the post and decides if it is against the TOS.
• Off -topic posts should go in the General Forum.

Again, welcome to the CreditBoards family! CB Admin: LKH, Pam, radi8, breezeCB Mods: CargoJon, Chris in CA, cotterpin, CramItCCCAs, Cristy, fla-tan, hardpull, MarvBear, pryan67, psp, stealthmidget, Stryker, yourguide, ZeRo_C0oLForum Leads: Brian B The Loan Professor, cedski, DallasLoanGuy, four20nik, hoapres, hurricanesfans27, Lighthouse84, Linx04, Neen, orangecrush, Peekaboo, TeeSharice

[hegemony]

the amount of debt is not a FICO factor.

[LustfortheMoment]

The debt which you're holding as a percentage of your overall credit limits is key. If you have 4 cards totalling $100K and somehow balance transfer $75K in arbitrage, your 75% utilization is going to hurt your score. In addition, high utilization on any given card will also count against you.

 

The arbitrage folks don't worry about hits in their FICOs. They pocket the proceeds and see their scores bounce right back when they pay off their balances in full at the end of the promotional period (usually 12 months). With the advent of balance transfer FEES as well as low rates on MMAs , the game really doesn't return very much anymore.......

[Credit Matters]

I know that the amount of debt that you are holding affects your credit score but I am just curious how badly credit arbitrage affects one's score. It's shouldn't be as bad as paying your bills late, right?

 

Was at 760ish when I first played the game last year. Score bottomed out at 709 on PFICO. As I paid it off, my score rebounded. I am now above 800 on PFICO.

 

That's the great thing about utilization. You can get hammered when you utilize too much and rebound just as quickly when you pay off balances.

 

Being overutilized can be dealt with quickly. Having a late payment on your record stays for seven years.

 

I'll take the utilization issues.

[Credit Ranker]

the amount of debt is not a FICO factor.

 

No you are right. I meant the ratio Sorry

[hegemony]

the amount of debt is not a FICO factor.

 

No you are right. I meant the ratio Sorry

 

utilization is a major FICO factor. my scores have been higher with <1% reporting.

[Credit Ranker]

I know that the amount of debt that you are holding affects your credit score but I am just curious how badly credit arbitrage affects one's score. It's shouldn't be as bad as paying your bills late, right?

 

Was at 760ish when I first played the game last year. Score bottomed out at 709 on PFICO. As I paid it off, my score rebounded. I am now above 800 on PFICO.

 

That's the great thing about utilization. You can get hammered when you utilize too much and rebound just as quickly when you pay off balances.

 

Being overutilized can be dealt with quickly. Having a late payment on your record stays for seven years.

 

I'll take the utilization issues.

 

Well. I have done arbitrage before, and I have seen similar results to yours. I think the lowest I have ever been is 703. But mine took a long while to bounce back to 785 that I was before that. Also, one of these credit companies decided to cut the introductory rate even though I was on time all the time. They just suddenly increased the rate from 0 to something horrible. I am curious if it's a good time to take Warren Buffet's advice and buy cheap stocks now. The risk is higher though

[LustfortheMoment]

I am curious if it's a good time to take Warren Buffet's advice and buy cheap stocks now. The risk is higher though

 

Credit card arbitrage provides a risk free return.

 

The equity markets are always a gamble........... big returns with the risk of big losses.

 

Good Luck,

[daiye1]

mine dropped roughly 30 points...but it's worth the $$$$ i'll be making....just don't let anything else make your score drop...as they all said..you can recover from util pretty quickly

[GEORGE]

F.I.C.O. doesn't pay my bills

 

...and some people keep on asking why people NEED so much credit

 

(AS IN 6 FIGURES)

[Credit Ranker]

mine dropped roughly 30 points...but it's worth the $$$$ i'll be making....just don't let anything else make your score drop...as they all said..you can recover from util pretty quickly

What do you invest on? I have not had the guts to go with the stocks and commodities markets yet. I also know a lot of folks made a killing with FOREX. Arbitrage with a E*Trade investing account doesn't pay much.

[Credit Ranker]

I am curious if it's a good time to take Warren Buffet's advice and buy cheap stocks now. The risk is higher though

 

Credit card arbitrage provides a risk free return.

 

The equity markets are always a gamble........... big returns with the risk of big losses.

 

Good Luck,

 

It's a big risk. As I mentioned earlier, I know folks have made a killing with the commodities market and FOREX. But I am not sure I am going to take that route.

[daiye1]

What do you invest on? I have not had the guts to go with the stocks and commodities markets yet. I also know a lot of folks made a killing with FOREX. Arbitrage with a E*Trade investing account doesn't pay much.

 

the 7k is in dollarsavingsdirect...@ 4% APY..BOA Visa Sig, gave me a great 0% BT for 12 cycles deal. The next highest APY was emigrant, @ 3.5%, BUT w/ DSD you MUST have a 1k min.