Okay, I have 7 revolving accounts (Visa/MasterCard) and two store charge cards. I also have one auto loan. This is what is reporting on my credit reports. I have no derogs. How much is too much?? One of the factors that is lowering my score is the number of accounts with balances. CreditWatch is saying that the average consumer holds 4 accounts with balances--is this the ideal mix?? I know I went a bit overboard when I started reestablishing my credit, and the majority of these accounts are about a year old now. The oldest is from 7/01. What do you think? SHould I be closing some of these out, and if I do this, will it drop my score even more since they are relatively new accounts? Any advice is appreciated....
How much is too much? Well, it's important to know what your score is to begin with. If the worst thing you have pulling your score down is having too many accounts with balances, then you're in good shape. If your score is pretty high, it's probably not worth your time to bother with this. Also, keep in mind that it's too many accounts with balances that's the problem. If you pay an account off, but keep it open, that's one less account with a balance and you still get credit for having a good ratio of debt to available credit.
Hi Matt, Just out of curiosity, have you checked out your score from any of the CRAs? Just a few suggestions I have found to be helpful: 1) Don't close out any accounts until they are at least 5 years old. Since your cards are all pretty new, your score may drop if you close some of them because that will lower the average age of your credit history. Positive TLs will stay on your credit history for 10 years. Do you really want a card that was opened for 6 to 12 months dragging down your score for 10 years, even though its positive? 2) Try to become an AU on somebody else's credit card. Her/his years of excellent credit history will show up and improve your report. (Don't forget to check with the credit card co. to make sure they will report AU trade line). 3) Ideal mix, from what I read, is really hard to pin down. I've read that some people with 20+ TLs over the course of 25 years have had scores in the high 700s and then, I've also read that some people with 1 Visa/MC, 1 charge card, and a mortgage have also had a high score... The more I've read, the more ethereal this concept becomes... Me personally, I've decided to just go for as much of a mix as possible: 3 or 4 V/MCs; 2 dept store cards, 1 gasoline card; 1 auto loan; and authorized user on my fiancee's AMEX Optima (9 year history). I filed BK discharged 10/98 and my oldest TL is CAP 1 from 1/2000. My current scores are in the 680s, but I haven't checked my score lately... the 2 dept store cards, gas card, auto loan, and Optima TLs are all new (recorded 2-3/03). Most of the CAs pulled EQ (live in CA) so I have 9 inquiries which pulled down my score about 12 points from a high of 685 to about 673! (aaargh!) TU and EXP are pretty stable in the 680 range... Out of the 4 V/MC accounts I currently have, I only had a balance on one card. The others showed "0." I'll provide an update with current scores as soon as all TLs show up on my reports. I hope my decisions will bear FICO fruit and can serve as an example of what to do (or not to do)! In the past month, I too have gone a bit "overboard" in re-building my credit but there has been a method to my madness. I am only getting cards that will help my mix. I hope to add just one more card to my "mix"-- an AMEX charge card, which I will try to apply for. If I can't get it, then my fiancee will apply (she's had sterling credit for the past 15 years), and I'll get added on as an AU. My ultimate goal is to apply for a mortage in 2 years to get all these inquiries off my record and to add age to all my different TLs. Plus, I plan to dispute and get rid of the ch-7 BK that is showing up on my CR...
