topic Re: The right number of credit cards in Credit Cards

The right number of credit cards

Pghmg — Sun, 02 Dec 2012 01:44:11 GMT

Can anyone tell me the proper number of credit cards a person should carry to help increase credit score. Someone told me that three is the magic number. I currently have two, one is a cap one master card and the other a orchard Master Card. Both accounts have 300 limits. Can anyone give me direction .

Re: The right number of credit cards

HiLine — Sun, 02 Dec 2012 01:46:34 GMT

That depends on where you are on the CC's journey. :)

Re: The right number of credit cards

daybreakgonesXe — Sun, 02 Dec 2012 01:48:21 GMT

Pghmg wrote:
Can anyone tell me the proper number of credit cards a person should carry to help increase credit score. Someone told me that three is the magic number. I currently have two, one is a cap one master card and the other a orchard Master Card. Both accounts have 300 limits. Can anyone give me direction .

Three is the absolute minimum, and there doesn't seem to be a cap on the max. But it depends on your management skills. Some people can manage 40+ cards very well, let them age, and get high 700s and into the 800 range over time. Personally, I would aim for 4-6 (currently have 6 now), because I'm aiming toward a perfect credit score one day. That doesn't mean though you can get great credit with more than that! It's all a matter of payment history, utilization, and age of accounts to get into the high ranges!

Re: The right number of credit cards

trumpet-205 — Sun, 02 Dec 2012 01:59:20 GMT

Pghmg wrote:
Can anyone tell me the proper number of credit cards a person should carry to help increase credit score. Someone told me that three is the magic number. I currently have two, one is a cap one master card and the other a orchard Master Card. Both accounts have 300 limits. Can anyone give me direction .

You should only carry as many card as you need. You can build a solid credit with just one credit card. Do not buy into the belief that you need extra credit card to have excellent credit.

Also solid payment histroy is far more important than credit score. Credit score is just a number, it does not tell the big picture.

Re: The right number of credit cards

Pghmg — Sun, 02 Dec 2012 02:07:32 GMT

Thanks for the credit advice. My goal is to qualify for my first mortgage by the summer of 2013. I'm afraid that if I apply for another credit card now it ill lower my score.

Re: The right number of credit cards

brother7 — Sun, 02 Dec 2012 02:11:43 GMT

Pghmg wrote:
My goal is to qualify for my first mortgage by the summer of 2013.

With a current score of 560, you've got quite a ways to go to get a good rate on a mortgage. Instead of focusing on optimal number of cards, focus on clearing the baddies off your CRs.

Re: The right number of credit cards

Wolf3 — Sun, 02 Dec 2012 03:12:27 GMT

Pghmg wrote:
Thanks for the credit advice. My goal is to qualify for my first mortgage by the summer of 2013. I'm afraid that if I apply for another credit card now it ill lower my score.

Two cards is enough, but a few more in the long run can help with utilization, and AAoA. However, you should not get anymore until after the mortgage is done, as they can hurt you in the short term.

Re: The right number of credit cards

SnackTrader — Sun, 02 Dec 2012 04:04:41 GMT

brother7 wrote:
Pghmg wrote:
My goal is to qualify for my first mortgage by the summer of 2013.
With a current score of 560, you've got quite a ways to go to get a good rate on a mortgage. Instead of focusing on optimal number of cards, focus on clearing the baddies off your CRs.

I hate to be blunt, but rate isn't the biggest worry with a 560 score - approval is. I have never seen anyone get approved for a mortgage with a 560 score.

Re: The right number of credit cards

CreditScholar — Sun, 02 Dec 2012 08:09:30 GMT

SnackTrader wrote:
brother7 wrote:
Pghmg wrote:
My goal is to qualify for my first mortgage by the summer of 2013.
With a current score of 560, you've got quite a ways to go to get a good rate on a mortgage. Instead of focusing on optimal number of cards, focus on clearing the baddies off your CRs.
I hate to be blunt, but rate isn't the biggest worry with a 560 score - approval is. I have never seen anyone get approved for a mortgage with a 560 score.

+1. You really need to work on your scores if you want a mortgage in 6 months. 560 is downright horrible.

Re: The right number of credit cards

Pghmg — Sun, 02 Dec 2012 15:23:23 GMT

Thank you for all the comments.. I completely understand that the score I have now is bad,, but its better than where I came from just two and half months ago. I have been working on all of my baddies, removing inaccurate information , paying all bills on time and along with managing the percentage usage of credit card usage of no more than 15%. Based on my work I'm sue I can reach my goal by summer 2013. My main question was just the number of credit cards in order to help me with the process.

Re: The right number of credit cards

SnackTrader — Sun, 02 Dec 2012 16:39:22 GMT

I will say that there is anecdotal evidence on this site that 3 credit cards will help boost your score to a greater amount than 1 or 2, but it is hard to say what the effects are of having more than 3. Certainly, part of that boost comes from having more credit available, which is taken into account in FICO scoring.

However, you will probably need to explain every inquiry you put on your report within 6 months of mortgage, so be aware of that if you do decide to add a third card.

Re: The right number of credit cards

StartingOver10 — Sun, 02 Dec 2012 16:53:55 GMT

Some mortgage lenders like to see you have a minimum of 3 or 4 tradelines (positively reporting) in order to issue a mortgage. Naturally you would need to meet the other mortgage criteria including down payment, employment and other credit requirements. The 3 or 4 tradelines is not a written guideline AFAIK, but it is the one that many mortgage lenders use. This would include any installment loans you have (auto/student) as well as cc's.

I have seen people increase their scores tremendously here in a short time (6 months to a year). Check out the rebuilding section if you haven't already checked them out.

Re: The right number of credit cards

thom02099 — Sun, 02 Dec 2012 17:20:41 GMT

Pghmg wrote:
Can anyone tell me the proper number of credit cards a person should carry to help increase credit score. Someone told me that three is the magic number. I currently have two, one is a cap one master card and the other a orchard Master Card. Both accounts have 300 limits. Can anyone give me direction .
That 560 score in your signature for 11/2012...is that a FICO or FAKO score?

Appears you've made some strides in what you're doing, going from a 523 to a 560 score in a short time. What mortgage lenders like to see, rather than just more credit cards, is a good mix of credit. Credit cards help but so do car or personal loans. If you have those in your credit history mix, that will be a benefit.

Shoot for a 660-680 range for your goal of Summer/2013. I think that could be doable, given whatever you've done to get the increase you currently have. Just make sure that it's a FICO score and remember that a mortgage lender will pull all three of your reports and take the middle score. Monitor those scores here, spend the money to get your reports here in, say January/2013 so you know where you are at the beginning of a new year, and then maybe every other month, pull your scores here. That will give you 2 of the 3 scores you need, so regardless of what Experian may report, you'll have 2 scores to base your progress on.

Re: The right number of credit cards

youngandcreditwrthy — Sun, 02 Dec 2012 17:29:14 GMT

I have 17 cards LOL. A high num of cards only becomes a problem if you carry a balance on all of them. I only use 5-6 and only carry a balance on like 3, which are at 0%. I use most of my accounts every six months or so just to keep em active and reporting. That is key to help aaoa and util. Even if you dont use an acct much, keep it active and reporting by charging something small every few months.

Three last words: DISPUTE, DISPUTE, DISPUTE!!!!!!
Debt collectors have the legal obligation to PROVE you owe a debt. No proof=no debt.

Re: The right number of credit cards

Pghmg — Sun, 02 Dec 2012 17:51:38 GMT

560 is my FICO score and currently I have an auto loan and studen loans, so I think I have a good mix. Instead of getting a new card I will work on attempting to increase my limits on the ones that I have, along with continuing to work my program. All of you guys are great and I will keep updated with my progress.

Re: The right number of credit cards

thom02099 — Sun, 02 Dec 2012 18:03:41 GMT

Pghmg wrote:
560 is my FICO score and currently I have an auto loan and studen loans, so I think I have a good mix. Instead of getting a new card I will work on attempting to increase my limits on the ones that I have, along with continuing to work my program. All of you guys are great and I will keep updated with my progress.

Best of Luck to you! This forum here can be a wealth of information, lots of good folks with great answers to questions!