topic Re: How many CCs is considered Optimal for FICO Scoring? in Understanding FICO® Scoring

How many CCs is considered Optimal for FICO Scoring?

pushedtoofar — Thu, 13 Mar 2008 15:47:27 GMT

I have 2 majors with 2500/3800 CLs. Is this enough????

Re: How many CCs is considered Optimal for FICO Scoring?

1111mel — Thu, 13 Mar 2008 16:20:16 GMT

Do you have balances on them? How long have you had the cards for? This would need to be taken into consideration to give you a better idea.

Re: How many CCs is considered Optimal for FICO Scoring?

pushedtoofar — Thu, 13 Mar 2008 16:27:20 GMT

I am at 9% util which is already optimal. Just wondering if the number of CC acounts matters to the FICO formula...

Re: How many CCs is considered Optimal for FICO Scoring?

Sylviatob — Thu, 13 Mar 2008 16:57:47 GMT

Hi pushed, that's a question talked about a lot here. For optimal FICO scoring considering the fewest cc's you could have, the general consensus is a minimum of 3. Some say 2. I say 4. lol.

Don't you love a diversity of opinion here?

Many of us have only 4 or 5 cards. Then lots of others have upwards of 20. Some 30. I myself have 16: 10 bank cards, 5 store cards, and one gas card. I have about 4 cards to many, and plan on closing them in the coming months.

The number is what ever you can safely manage, and oversee on a continuing basis. There is no magic number you can have. It's what ever works best for you.

Re: How many CCs is considered Optimal for FICO Scoring?

pushedtoofar — Thu, 13 Mar 2008 17:01:51 GMT

16??????????????????????????

OMG....

I travel out of the country for about 5 -6 months out of the year. My Discover card does not do me much good as a lot of overseas markets do not accept it. I was thinking about getting one more Visa or MC to go with the Capital One MC that I already have.

The real problem is that I plan on getting a house in about 6 months. I do not want all these hard inq hitting my reports right now. Especially not a new cc account...

Re: How many CCs is considered Optimal for FICO Scoring?

Sylviatob — Thu, 13 Mar 2008 17:14:48 GMT

Yes I understand Discover is not accepted out of the U.S. on a wide spread basis.

IMO, if you travel out of the country often, then yes....adding 1 or 2 more cards, either Visa or M.C. which ever is more widely accepted, is certainly justified.

By the way, which one IS more widely accepted out of country? Just curious.

Now then, regarding house hunting, and mortgages: If you plan on houseshopping in the next 6 months and putting one under contract, DO NOT open any new cc accounts.

Opening new cc's will cause your scores to drop, and 6 months may not be sufficient time for your scores to recover. (that's the general recommendation here). YMMV.

What are your FICO scores, and how old are they? Do you have any baddies on your CR's?

Re: How many CCs is considered Optimal for FICO Scoring?

haulingthescoreup — Thu, 13 Mar 2008 17:21:04 GMT

Try this:

http://ficoforums.myfico.com/fico/board/message?board.id=ficoscoring&thread.id=12673

Once you have good cards with decent CL's, I'd say that you should have three bank cards anyway (CU's are great, if you also have one or two from a "national bank" like Citi, BofA, etc), plus one retail or gas card that does not have Visa, MC, etc on it. The majors should be from different lenders, in case one loses their mind, or goes bankrupt, or is invaded by Martians or something.

When people are building or re-building, they often have more --a lot more! --because the CL's are so pitiful that they need a bunch just to get any momentum going. Once scores start improving and they can get better cards, many start consolidating and closing the doofus cards.

Plenty of people with good scores and reports have a bunch more than that, but if you're not into plastic, the 3 + 1 quality cards ought to work.

Re: How many CCs is considered Optimal for FICO Scoring?

pushedtoofar — Thu, 13 Mar 2008 17:27:56 GMT

My scores have a lot of inaccuracies in them right now. They are bad but I am working on them.

I have one 120 day late Nov 07 (where from I do not know) that will be taken off this month

I have one 30 day late Jan 05 that will be taken off this month

I have one of my ex CC on my account (99% util and 1 30 day late Sep 06) that should be coming off

I have a GW letter out to Discover to drop the only 30 day late on that account (2 years old)

I have a GW letter out to Regions Bank to drop the 60 dya late from 2005 (student loan)

I have 3 CAs....two of them are my ex-wifes that I can get no cooperation on....

I have one major derog in that I let my ex's car get repo'd...stupid of me as I ended up paying $$$$ money to get it back. GMAC shows me current for 13 months and notes the account as REDEEMED. I am thinking about trying to GW this...can't hurt.

CC util is now 9% down from 79%. Waiting for scores to update.

No late payments (after the corrections) for 3 years.

Anyway, I expect to see scores in the 650's in a couple of months. (they are too embarassing to show now)

Re: How many CCs is considered Optimal for FICO Scoring?

RobertEG — Fri, 14 Mar 2008 05:00:16 GMT

When you say you have lates in '05 and '07 that are dropping off, I am kinda confused. Is this because the CCC is GWing them away? If not, derogs remain for 7 years, and thus have a good bit of time remaining as derogs on your score.

Re: How many CCs is considered Optimal for FICO Scoring?

ilovepizza — Fri, 14 Mar 2008 05:20:29 GMT

My research so far over the past year has concluded 4+ cards to be the minimum. However the gain between 3 and 4 was very small. 2 was a bad number with some other scoring models. 1 is just not enough. I am down to 13 cards I think. I consolidated a few and canceled a few. I had around 20 credit cards for a while. The extra plastic in the long run holds up average age, but as far as point gain, I didn't see it.

My optimum calculation is 4 or more. And never less than 3.

Having more doesn't hurt anything but average age today, while they're very important to build average age later. :) So I say if you want more go a head. Just consider short term average age drops if you need your score up today.

If you are playing for the future, more plastic will hold up average age to get you in to the 800s later. I kept all my old ones just for age points. As far as how many is best to keep up average age? How many can you apply for, lol, don't actually do that. 4-10 is fine. (4 for optimum + more to hold up avg age years later, but you will need to wait years for those avg age points)

Message Edited by ilovepizza on 03-13-2008 10:20 PM

Re: How many CCs is considered Optimal for FICO Scoring?

wfreeman3 — Fri, 14 Mar 2008 11:31:35 GMT

I can tell you that I had 4. Cancelled one and added 2. No score change whatsoever.

TU - 687

EX - 612

EQ- 632

Re: How many CCs is considered Optimal for FICO Scoring?

pushedtoofar — Fri, 14 Mar 2008 11:51:16 GMT

The ones dropping off are computer generated items from my credit union that I have been doing business with for about 14 years. They admit that these are errors and are removing them. According to them, any little mis-step is setting up a payment can cause this. (the CU ast manager and I go back 14 years!)

Re: How many CCs is considered Optimal for FICO Scoring?

Timothy — Fri, 14 Mar 2008 13:24:47 GMT

I am down to 10 cards-

8 Visa/MC/Amex

1 Amex charge

1 Store-

A year ago I had 3 cards-

Re: How many CCs is considered Optimal for FICO Scoring?

fused — Sat, 15 Mar 2008 20:39:51 GMT

pushedtoofar wrote:

I have 2 majors with 2500/3800 CLs. Is this enough????

I believe in keeping it simple! If I could do it all over again, this what I would have done:

2-3 Visa or MC

1 Amex or Discover

1 store or gas card

My sister-in-law has a thin file and her scores are in the low 800's. This is all she has:

1 Visa 15% util

1 Citi Sears card 0% util

1 LOC (OD protection) $0 bal

1 paid auto; clean

1 consumer finance loan paid; clean

Her credit history length is 11 years with an average-age not far away. Simple can work!

Re: How many CCs is considered Optimal for FICO Scoring?

RobertEG — Tue, 18 Mar 2008 07:42:07 GMT

Well, I will throw my fish into the pond. It is not the number of CC's that you have, it is rather how you manage them.

FICO looks first at overall %util, which has nothing to do with the number of cards you have, but is the most important factor. But the thrust of this thread is not about overall %util, but rather upon the effect of having many cards. So I will regress to the discusssion of having bucho cards, vs. only a few.

So, with that in mind, be aware that FICO also looks at %util of each TL. So any card, regardless of percent overall util of all cards, will have a neg effect if its individual %util is high. If you put a charge on a low CL card, it will affect your score more than putting that same charge on a high CL card.

Additionally, FICO also looks at the percent of the number of cards (not how much balance is above zero) that have balances at th reporting period. So ten cards, with seven having any balance, regardless of the overall %util or %util or each, is a factor.

So, this is my understanding. Having bunches of cards requires bunches of effort to ensure that each maintains a low reported %util, and further that at least half have reported balances of zero.

Dat beez a lots a woik!

If you have more than a few cards, then you will either need the Mind of Mensa to keep track it all, or be fluid in Excel spreadsheets, and thus be able to monitor each CC before its report date.

OK, if that does not convince you, then let me put you at the shopping mall tomorrow.......

You see this really neat new gizo. Only $200. You plunk out your wallet of ten cards, and whip out the one on top. It happens to be your new Platinum Blue Neat $300 CL card! Neat, huh? But, bud, you are now instantly at 67% util on that Plat Blue Neat card! It reports. If you had put in on another card, then it would be a different credit score. I dont have the Mind of Mensa, and dont carry my lptop to the mall each day so that I can evalutate the %util of each card, and thus where to place my purchase.

I dont want ten cards.

So, for me, getting a new, low CL card just is a pain in the butt to control. I dont have the time to absorb further minor credit hemmorhoids treatments that require daily Preparation H.

How many cards should I have? The answer is, how much time do you have to maintain them?

Message Edited by RobertEG on 03-18-2008 12:05 AM

Message Edited by RobertEG on 03-18-2008 12:08 AM

Message Edited by RobertEG on 03-18-2008 12:12 AM

Message Edited by RobertEG on 03-18-2008 12:27 AM

Message Edited by RobertEG on 03-18-2008 12:30 AM

Message Edited by RobertEG on 03-18-2008 12:33 AM

Message Edited by RobertEG on 03-18-2008 12:42 AM

Re: How many CCs is considered Optimal for FICO Scoring?

thinkin — Tue, 25 Mar 2008 13:27:50 GMT

You may want to be careful about closing your extra card accounts. I thought the conventional wisdom was once an account is open, it's best to leave it open.

Re: How many CCs is considered Optimal for FICO Scoring?

bgoode — Tue, 25 Mar 2008 13:50:37 GMT

Go ahead and get 2 more cards. Atleast one a visa! Im in the navy and use my visa everywhere! But I have 3 visas and one mc. visa 1 $5000 limit visa 2 $7500 limit visa 3 $3000(which when my score boost hopefully up to $5000 and the mc is at $6000 limit. If i didnt have so much ran up on them my score wouldnt be a 632.

But get them if you know your a good spender. the 2 inquirys wont hurt you if you havent had to many.

good luck

Re: How many CCs is considered Optimal for FICO Scoring?

az_r2d1 — Tue, 25 Mar 2008 19:37:48 GMT

How does not using most of the cards you have affect the scoring ? I have about 6 or 7 but only use 1 of them for almost everything (amex,high CL), one for everything that doesn't take amex and one at a department store that issues it. The rest never really gets used. I always pay the cards in full. Should I use the rest of the cards for small amounts? Or don't bother ?

Re: How many CCs is considered Optimal for FICO Scoring?

elliptic — Tue, 25 Mar 2008 21:04:04 GMT

I agree that closing accounts is not the best idea. Apparently, your CS is affected by the length of time you have had accounts open and the number of inquiries for new accounts. The longer you have had an account open the better. The fewer inquiries the better. I used to close accounts so that I could open others with better rates but this had the effect of lowering my credit score.

Re: How many CCs is considered Optimal for FICO Scoring?

pushedtoofar — Tue, 25 Mar 2008 21:14:39 GMT

optimal FICO scoring is best achieved by having a 1%-9% CC utilization. It measures how you USE credit...not how well you STORE it in your sock drawer.