Credit score & number of cards

Discussion in 'Credit Talk' started by PsychDoc, Nov 20, 2001.

  1. PsychDoc

    PsychDoc Well-Known Member

    I just read something interesting... Thanks to the miracle of copy/paste, here it is:

    Number of revolving accounts:

    This may not be a problem based on your overall debt to income ratio. However, a large number of open credit card accounts, with or without balances, can negatively impact your credit score. A revolving account is any account that gives you credit that you can re-use as you pay off the balance. The most common type of revolving credit are credit cards, but retail store accounts and other types of accounts may be counted as revolving. In general, less than 5 revolving accounts is a safe number of accounts, 5 or more accounts will impact your score. You may want to consider the following tips to improve your ratings:

    If you don't use the account, pay off the balance, if any, and close it. In order to maintain a good credit rating it is important to maintain a reasonable number of credit accounts, but keeping accounts open that are unused does not help your credit score.

    It looks like the best ticket to having a very high score would be to have:

    1) A few (say, 3 or 4) revolving credit cards, each with very high lines of credit ($10,000+), and very low carried balances.
    2) At least one charge card (American Express, Diners Club, etc.).
    3) At least one retail credit tradeline (regular Target Guest Card, Sears, etc.).
    4) All tradelines at least 6 months old, and at least 1 more than 3 years old.
    5) No derogatory notations.
    6) Very few inquiries -- no more than 1-3 in a six month period.
    7) At least one "installment" tradeline in good standing, i.e., a mortgage, auto loan, or student loan.

    I didn't realize that 5 or more regular credit cards could count against you!

  2. myschae

    myschae Well-Known Member

    One more interesting thing from my most recent credit report:

    So, perhaps the trick is to have 3-4 high limit cards and only carry a very low balance on one. ;)

  3. DaveH

    DaveH Well-Known Member

    Theanks for the post, PD. What's the source for it (which CRA?)

    I have been skeptical of the claim of many that have more cards with high limits is always good, since it means your ratio of credit available to credit used is low. I know that when I had one card near maxed out (amex blue at $20K) due to 0% interest rate, my score dropped down from 700s to 500s, even though I had several other lines with small or no balances.
  4. PsychDoc

    PsychDoc Well-Known Member

    Dave, Trans Union. Interesting, btw.

    Myschae, thanks for that tip! Let's add that to the "recipe for a perfect score"... :)


    1) A few (say, 3 or 4) revolving credit cards, each with very high lines of credit ($10,000+), and very low carried balances on only 1 (or maybe 2) of them at a time.
    2) At least one charge card (American Express, Diners Club, etc.).
    3) At least one retail credit tradeline (regular Target Guest Card, Sears, etc.).
    4) All tradelines at least 6 months old, and at least 1 more than 3 years old.
    5) No derogatory notations.
    6) Very few inquiries -- no more than 1-3 in a six month period.
    7) At least one "installment" tradeline in good standing, i.e., a mortgage, auto loan, or student loan.

    Doc :)
  5. myschae

    myschae Well-Known Member

    Sorry, that was straight off of my Equifax MyFico(R) Score Power Score Analysis thingie. (Betcha can't say that 10 times fast!)

  6. Momof3

    Momof3 Well-Known Member

    You know this issue has been discussed many times and just when you think you have managed to figure out an ounce of what FICO is about you see several members of this board ( won't name names they will surely chime in) that have 10+ cards and have score 700 and above.
  7. PsychDoc

    PsychDoc Well-Known Member

    Ain't that the truth, lol, but will they ever see 825 with 10+ cards? I'm shootin' for the stars, Mom. :)

  8. sph88

    sph88 Well-Known Member

    I have 45 accounts and my score stays around 720!
  9. bbauer

    bbauer Banned

    I got a gadzillion accounts and my FICO is =875

    That's not an equal sign. That's 2 minus signs one on top of the other.

    Who can beat that?

  10. keepmine

    keepmine Well-Known Member


    I've gotten moe familar with FICO this past year than I ever wanted to be. My story in a nutshell is I woke this past Jan.1 knowing I owed too damnmuch money and resolved to start paying off debt {cc}. Unfortunately, my creditors came to that conclusion as well. I got my credit lines cut and rates raised anywhere to 12.99 to 16.99% No missed on late payments-just done on a risk analysis basis.
    An old friend of mine in banking answered a lot of my questions and then put me in touch with a Money and Banking Professor who does consulting work for banks on pricing risk on unsecured debt. He isn't connected with FICO but, he helped me a hell of a lot.
    The first thing he said was to get my total debt to credit limit under 40% and, the accounts I had that were above 70% of debt'credit limit to back those off to 60% even if I had to bt to cards with an unfavorable rate. Then, start paying debt down as much as possible. I took his advice and finally, this past August I broke the 40% debt to credit limit ratio. I got an excellent bt offer from Amex. The AMex Optima Consolidator. Prime + 3.49% . In Oct. I got another excellent offer from Discover. 1.7% through May and a 12.5% go to. The go to ain't great but, I'll do some serious damage on the balance I transefered. I'm starting to get attractive offers about once a week now. I'll wait until after the first of the year and apply for more of those.
    One other thing he told me. That all scoring models have a favorable disposition to seeing total debt at between 15-20% of credit limit and the majority of your trade lines at older than 36 months. So, if you want all the cards in the world at favorable rates, that's what you shoot for. Good luck to us all!
  11. PsychDoc

    PsychDoc Well-Known Member

    Man, that is great info, keepmine -- thanks. Sounds like you've made some serious headway with it.

  12. roni

    roni Well-Known Member

    Only scores that matter are FICO... TU Consumer Score is NOT FICO!
  13. PsychDoc

    PsychDoc Well-Known Member

    The Trans Union reference was simply their advice for improving scores generally. I don't think anybody in this thread equated the Trans Risk score with FICO. Bkev, what are you seeing here that I'm missing? (Maybe a lot. Do tell.) :)

  14. Jim

    Jim Well-Known Member

    Based on my own personal experience...

    1. Long ago - I believe it was Saar - carefully studied what information was available on true FICO scoring. As I remember, 5 or less revolving accounts (including 1 retail in the 5) + 1 installment loan provided optimum FICO scoring "POTENTIAL". I tend to accept this for a number of reasons that I won't go into here.

    2. I will only discuss Experian not EQ or TU because I have actually had the opportunity to see my "true EX credit score" at various times at the Credit Union. My score is in the 700's with 16 open revolving accounts and 1 installment loan. Of the 16 only 13 are actually open. 3 are closed but show open. I have not disputed the 3 as closed because they are old tradelines going back to the 80's. Next year, I plan to start trimming accounts to be more in alignment with the FICO model and because I have too much credit. I will trim new accounts that have aged past one year. BTW EX does not show my BK or any negative accounts - ( Another story).

    3. The issue that I have never seen addressed is - How much does it help you to have only the recommended 5 + 1 accounts. My humble opinion is not much in the way of points. When I bought my Ford Explorer the month I was discharged from my Chap 7 BK at 2.9% apr. - The Ford credit manager exclaimed positively over all those paid off and closed accounts showing on my credit file. My credit score was 530. If I had followed the 5+1 suggestion in prior years, I would have had far fewer closed positive tradelines to present to the Credit Mgr. I think that condition and age of accounts matter much more in the FICO scoring process. The 5+ 1 matter is probably one of the forty factors rumored to make up a FICO score. I have deliberately brought my account number to a high level temporarily in order to have a high number of closed accounts in good standing for years to come.

    4. As a side issue - next year I go house hunting. I have to deal with a trimerge credit report that will show my BK. Bad news for me. 15 open accounts might look excessive to a lender even with 20% down. 10 or 11 are no problem. Been there before when I bought homes.

    5. Remember that those accounts I close in 2002 will remain as closed positive tradelines until 2012. MY Bk drops off in 2008. When applying for credit think about the future along with the present. I accepted Cap One and Providian accounts. Actually I was lucky to get them. I never accepted Cross Country, Orchard, Direct Merchants Bank, MBNA secured, First Premier etc. because I do not want lenders after 2008 to ever see evidence that I was once a bad credit risk. Those companies are a dead give away on your credit report

    Best regards,

  15. Jim

    Jim Well-Known Member

    Sorry for the typo in #4 - I said 15 accounts and meant to say 16. // Jim
  16. PsychDoc

    PsychDoc Well-Known Member

    Great post, Jim.


    (P.S. By the way, if you want to edit your post, you have 15 minutes to do it -- for correcting typos, etc. Just click the "Edit" button.)
  17. breeze

    breeze Well-Known Member

    Well, I guess I will never reach the 800+ scores, because I want to have more cards open. I think it is better in the long run, at least for me. I know with one of the CRA's scores it said I had my debt unevenly distributed on my cards. Well, yeah, I guess! If one card gives me a better rate than the others, they get my balance. If they decide to jack me around I have plenty of options, and they can {hopefully} see that there is no point in it - I have somewhere else to go without applying and getting inquiries. I can't help but believe a lot of the scoring crap is related to whether or not you will be profitable - i.e. "how ignorant are you?" Not "how good are you?"

    From what I have seen and heard, the CCC's will jack your rate up if it looks like they can trap you. I'm not sticking my snout in that trap no matter how good the bait is, hehe.

    So, my 11 revolving accounts will stay open. :) It is a good feeling to zero out a card when they don't treat me right, and then sit back and wait for the offers to come in, enticing me to use that card again. I will say, with my recent Citibank increase - It's just the right amount to close the stupid Associates card. So now I am in a position to bargain effectively with Associates. I am not a convicing person when I bulff, hahahahaha!! When I don't have to bluff, I am dynamite!!
  18. OtherTerri

    OtherTerri Well-Known Member

    So, with my settlement money, I should keep a small (less than 20% of cl) balance on one card, and pay the others off?
  19. keepmine

    keepmine Well-Known Member


    I would suggest paying all of the cards off if possible. Whatever rate you are being charged, paying them off gives a guaranteed return of that amount.
  20. OtherTerri

    OtherTerri Well-Known Member

    Will it boost my score more to owe nothing at all? All my accounts are new this year.

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