good credit mix?

Discussion in 'Credit Talk' started by ShyGuy, Mar 6, 2001.

  1. ShyGuy

    ShyGuy Well-Known Member

    An earlier post said 3-4 credit cards are necessary to have an optimum FICO score. Does that include retail cards (Macy's, Sears, etc.) and gas card (Chevron, et al) or just bank/travel cards (MC, Amex, etc.)?

    My wife has just started building her credit about nine months ago. She has a Visa and some store cards. Is adding a MasterCard or Discover likely to help or hurt her score? (Want to get the inquiry and start any new lines now because we're about a year away from looking for a home.) Because her Visa has a small balance, she pays it and the store cards in full every month.

  2. Marie

    Marie Well-Known Member

    most gas cards don't even report unless you're late and gas cards are some of the most difficult ones to get. Forget them in the mix.

    The model did show that one department card is optimal. then you add in time on the accounts (length of history).
  3. ShyGuy

    ShyGuy Well-Known Member

    Marie, I guess the heart of question is:

    Should she add a MasterCard or Discover to the Visa card in the mix?
  4. Marie

    Marie Well-Known Member

    how many cards does she have now?

    "She has a Visa and some store cards"... need more info:
    List the cards, loc, and dates opened and balances :)
    (and give me your first born, please) Oh, just kidding on that one!

    Also, I take it when you say building credit that she's just new to the game and has no derogatories. Plus, I'm also guessing that you mean should she apply for another card on her own? or are you making her an AU on your card?
  5. ShyGuy

    ShyGuy Well-Known Member

    She will be applying on her own. (I'm rebuilding after a BK.) She should have no derogs, though we haven't pulled her reports. (You all know how the CRAs can mess up.) She had been helped, though, by listing household income instead of individual income on her applications.

    For this month only, she will be carrying a $100 balance on a $200 limit LLBean/MBNA Visa because she is trying to get a limit increase. (She has had the card for about nine months.) Other than that, she pays in full every month.

    Her oldest tradeline is a Macy's, which she opened about a year ago with a $100 limit (now $800). Her others include:

    Nordstrom $800 about three months old
    Victoria's Secret $500 about six months old
    Chadwick's $1,000 about five months old

    Maybe one other store card, but I don't think so. Macy's and the Visa are the ones she uses regularly.
  6. Marie

    Marie Well-Known Member

    I used to have a lot of dept store cards and then I finally stopped applying and started getting visas and mcs. they're so much better (usable).

    She has plenty of dept store cards.

    FYI: it's ok to leave a balance on the cards occasionally. It's not taboo. It will increase your profitability score with that card (so they'll want to give her more credit). I also initially paid everything in full and I rarely got increases. It ticked me off. So I left a balance for 2 months (paid half instead of in full) and I started getting big increases.

    Ok, so yes, she could use another major credit card, but odds are she's lowered her scores b/c of the new accounts and because she'd have pretty recent inquiries. I wouldn't bother getting the dept store lines increased because it will take away from what she can get from the major cards. Keep trying to get MBNA up. The lower credit lines hurt her. Other creditors look at it and also give lower lines.

    So, yes she could use another mc or visa. You might want to wait a bit but you can always try now. That's up to you. If she got 1 rejection it wouldn't kill her. But if you apply for another card and get rejected, stop for 6 months.

    With regards to growing longterm credit, Let her credit age for a year, then once she has 12 months on several of her current cards, apply for 1-2 better cards. Let the older ones age... and eventually at the 2-3 year mark, if she's not really using the dept store cards, cancel them and increase you credit lines with the major cards. Clearly you're doing the right things with her. Oh, later you may want to add a different type of credit.

    I'd say once she has 3 cards w/24 months history (or whenever you find that she's hit the magical 680 mark) then get an Amex (it reports as an O=open) account, and you may eventually get her a small car or installment loan (I=instal). Mixing types of credit improves scoring. Plus, if you ever want a mortgage, they look heavily at installment payments.

    I have 1 dept store card showing on my Experian... and it's helped me get a semi-real prime card. It's the only difference in my 3 reports, so I think the extra 10-16 points pushed me over the edge. Hope this helps.

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