Hi everyone,
I got an ANZ black credit card to get $750 sign up bonus and closed the account immediately after getting the $, however my credit score was hammered from very good green to good yellow. How do you do churn cards without lowering your credit score?
The only have solution I could think of is to have only 1 card at a time & not immediately close the card after getting the rewards, perhaps wait 6 months? Would it be enough?
Kind regards,
Newbie Churner
Credit scores in Australia aren't really used the same way as they are in the States. Don't stress about it.
Do lenders look at this when we apply for a mortgage though?
Close the card if they ask and keep proof that you have closed it
Generally no.
They look at your net assets, regular income, expenses, and if you have any existing debt/credit amounts.
It will pick up quickly same way it dropped … don’t worry
Been 1 year but it stayed the same good yellow, haven't gone up to very good green. I don't have credit card anymore since that ANZ card.
there may be other reasons that you are not telling us about e.g. missed payments, defaults, summons etc. these things affects credit score as well.
to have a good credit score, first thing you need is a credit. It may either be a credit card or a mortgage or a personal loan. Second, you need to be paying the borrowed money back at regular interval without missing any repayment.
If you do not have a CC and no other loan, it's unlikely that the score will go up soon.
However, as others mentioned, don't stress it. At the time of any mortgage application, lenders only need enough proof of your incomes and expenses to show your repayment capabilities
We do 3-4 cards each a year. Credit rating fluctuates, but not much at all.
How long do you keep a card after getting the rewards?
Mostly get rid of it as soon as points hit and move on to the next. Especially with, I think it's NAB, that will pro-rata back your annual fee.
Problems as churners will know, is when you have to get refunds credited back to closed cards. I have a pile of cheques sitting here that I need to get down to the bank.
Off-topic but I recently discovered Bank@Post for lodging cheques and it has solved this problem as my bank has closed nearby branches
Is you credit score good yellow or very good green? I cancelled immediately after getting the $ and credit score went to yellow about a couple of days after. Perhaps the difference is you still had other cards open and I didn't?
@madreece: just wonder how did yours go over 1000? Mine always gets back up to around 900 but no more than that.
If you have a NAB account still open, just deposit them through the app.
It works well
Does Australia have credit utilisation ratio?? Does that affect credit rating??
No we don't.
In the long run it demonstrates that you can pay down debt so yes it will decrease but give it a month or two and it will have recovered.
Australia doesn't care about credit scores as much as America.
Thanks, what if you apply for new mortgage?
To be honest
Banks would be more worried about your wage and ability to pay back your loan at 7% interest rates than that time that you took out a credit card and paid it off.
Banks would like to keep the money flowing
Fwiw I'm onto my 5th card this year and looking at buying my first house. My credit score doesn't worry me, its largely my pay that defines it.
I've been churning CC's for almost 10 years (at least 3-4 a year), and bought a house about 4.5 years ago. No problems with all the churning, though I paused it for ~6 months just before we applied for the mortgage. It's very easy to explain if they even care: "I wanted the rewards, paid the cards in full, on time, every time, and have since closed them. Here are the closing statements". They hardly bat an eyelid. They will grill you more about Afterpay and similar platforms if they find them on your bank statements.
Ah thank you everyone! May follow your steps
@SoapyWooder: No worries :) Happy to provide any more advice if you need.
Honestly the credit score is just a vanity number. Unless it's red/really bad, no one is gonna care about it. Churning a few cards can actually increase it I believe, through demonstration of responsible borrowing and debt management. I.e. if you have no credit accounts, they have no idea how you manage credit and what your risk is.
Just don't worry about it essentially and don't overdo it - I usually aim for max 4 credit cards a year (and also helps limit my own spending).
Initially it impacted rating but after a while it seems to just be very good/green all the time lately.
Thank you, I don't have a cc since that ANZ card, it's been 1 year and hasn't gone up from good yellow. I should apply for 1 to increase the rating? I may need to apply for a new mortgage and perhaps they'll look into credit rating.
They do not really care about your credit rating.
If you have decent net assets OR decent equity, plus regular and reliable income, and basic expenses = you will get your new loan
The only issue is if you have, say, holding 4 active cards, and the total credit limit is $80k - the amount of borrowing power might reduce by $300k or so even if you have zero card limit balances. Best to cancel cards prior to any loan application due to this reason.
"How do you do churn cards without lowering your credit score?"
You dont. But why worry about this at all?
May need to apply for a new mortgage
Which site are you checking your score?
It sounds like you don’t have any other open credit products so it will be hard to increase your score. The #1 way to increase your score is through positive repayment behaviour (i.e. making repayments on time)
Never had an issue in regards to credit score and I've churned about 10 cards in the last 3 years…I think banks mainly look at your income vs. debt levels as their primary source of approving/rejecting any sort of credit
How long do you keep the card after you got the rewards?
Usually close it as soon as I get the bonus points/offer
I've only ever kept 1 card open since getting it; to keep a free subscription offer free…
Hmm yes I closed as soon as I got the rewards, but perhaps in your case, you still have other cards open but I don't
I wouldnt worry it fluctuates but also my credit rating is excellent and if the banks cared or put any weight on it as all I wouldn't get rejected based on income.
They might start use it more to asses your credit repayment abilities or influence on your loan serviceability but they don't currently.
How do you do churn cards without lowering your credit score?
You cannot have a new enquiry and be subject to a zero lowering in credit score.
I've had 9 credit cards in the last 2 years and my score is 980 excellent. I've missed one repayment in that time due to me forgetting. Other than that I've not had any issues with my score.
Excellent!
You were lucky with that missed payment. We missed one whilst overseas and my rating got absolutley smashed. Luckily I managed to get it removed from my report.
I've had an ANZ cc for many years with a $17K limit, always paid off, never close to the limit.
I've only applied for another cc once, the Citibank Signature years ago, and was rejected. I couldn't find out why I was rejected. No loans, decent income as a contractor. Would it have been the $17K limit on the cc or the fact that I'm a contractor?
better keep 1 main CC (no annual fee like the Latitude/28 degrees) and pay off regularly. This will maintain a good record for your credit profile.
well but you get $750 ? thats the price you and everyone else need to pay. nothing is free.