topic Re: 9 accounts in my credit report in General Credit Topics

9 accounts in my credit report

khidma — Sun, 11 Nov 2012 01:00:03 GMT

Hi, I need your advice understanding and managing my credits.

My FICO® score: 620
Oldest account was opened 3 Years
Accounts carrying a balance: 9 accounts

I never missed payment, i usually pay all balances at the end of each month, my mistake that i learnt fron my friend was to use the credit card a lot instead of debit card and then pay it all each month. But learning my FICO credit report, i was utilizing 70% of my balance which affect it negatively.

Here is my 9 accounts:

Installment loans: $42,561 (Auto Financing)

Company: Ally Open Date: 10/2012 Balance: $21,483
Company: Fmcc Open Date: 10/2012 Balance: $21,078

Revolving: $16,483

Bk Of America Reward Open Date: 08/2009 Credit Limit: $3,000 Reward
Paypal Extra MasterCard Open Date: 03/2010 Credit Limit: $5,500 Reward
Cap One Platinum MasterCard Open Date: 05/2010 Credit Limit: $1,500 No Reward
Chase Freedom Open Date: 12/2011 Credit Limit: $4,000 Reward
Citi Forward Open Date: 01/2012 Credit Limit: $6,500 No Reward
Amex Gold Charge Card Open Date: 08/2012 Open Account Reward

BestBuy Credit Card: Open Date: 09/2012 Credit Limit: $2,500

It become too much to keep up with all the cards, using them all to ratio of 70% which caused my Fico score to drop for 760 to 620 in a year.

Do you suggest for me to close any account? especially the Capital One as there is no reward and the limit is small.

Should I close the Amex charge card and change it to Amex blue credit card?

Any advice how to manage this cards?

For the 2 auto loan installment, what's the best to handle it? I have money to pay 50% of the 2 loans but some people told me it is better to only pay the monthly installment in 2 years to help in credit report. (the 2 loans are 0 interest for 3 years)

Thanks guys for your help.

Re: 9 accounts in my credit report

ccnewcc — Sun, 11 Nov 2012 01:44:57 GMT

I'm a big fan of paying down loans asap. If you have the money why not?

As far as closing cards, I'd close anything that has an AF (if any) and store cards. You could close the ones you don't use that don't offer any rewards or you could just SD for a while to let them age so more.

Re: 9 accounts in my credit report

brother7 — Sun, 11 Nov 2012 01:56:41 GMT

If it doesn't cost anything to keep a card (ie no annual fee), don't close the account. Instead, sock drawer it and let it age. You may need to use it for a small purchase once every 6 months or so, just to keep it active so that the issuer won't close it automatically.

The best way to manage revolving credit cards is to let them all report zero balance, except for one. For that one card, before the statement date, pay down the balance to 1-2%. Then after the statement date and before the due date, pay the remaining statement balance. The reasoning is that the statement balance is what gets reported to the CRA so it will look like you are at 1-2% utilization, which maximizes your score. IMO, I would use one of the rewards cards as my primary card.

If your financial situation doesn't allow you to do this, then use the same strategy with either 2 or 3 cards.

If you can't achieve 1-2% utilization, try for <10%. And if that's not possible, try to keep utilization <30%.

Hope that helps.

Re: 9 accounts in my credit report

khidma — Sun, 11 Nov 2012 02:05:19 GMT

Thank you guys.

Wouldn't it look bad to creditor if i have 7 credit card instead of 5 or 4 cards with higher limit and reward?

Do you suggest to just go ahead and deposit $5000 payment on each auti loan to drop the balance?

Re: 9 accounts in my credit report

ccnewcc — Sun, 11 Nov 2012 02:15:38 GMT

khidma wrote:
Thank you guys.

Wouldn't it look bad to creditor if i have 7 credit card instead of 5 or 4 cards with higher limit and reward?

Do you suggest to just go ahead and deposit $5000 payment on each auti loan to drop the balance?

Idk, there can be a thing called too much avaliable credit and too much recent credit to some lender. But every lender is different.

There are many ppl on here who have 20-30 cards. I think that is way too many. I think 2-3 is plenty.

If you are having trobule managing your cards then yes its best to close the ones you don't use/won't use.

If you like the idea of gaining some more age in your cards before you finaly do close them, then SD is option for you.

Re: 9 accounts in my credit report

brother7 — Sun, 11 Nov 2012 02:21:45 GMT

khidma wrote:
Wouldn't it look bad to creditor if i have 7 credit card instead of 5 or 4 cards with higher limit and reward?

Take a look at the infographic mentioned in http://ficoforums.myfico.com/t5/myFICO-Blog/What-s-the-Profile-of-High-Credit-Scorers/ba-p/1663246

One trait of high FICO scorers is that they have 7 credit card accounts.

I had 4, apped for 4 more and noticed an increase in my score. Additionally, for the cards you keep, try to get high CLs which will decrease your overall utilization.

Re: 9 accounts in my credit report

my-own-fico — Sun, 11 Nov 2012 15:28:16 GMT

If you usually pay your cards in full by the due date, you might as well pay them by the statement date and get the benefit of a low reported balance. If you take a ten mile walk with someone, it's an option staying next to him rather than two steps behind, as your speed is the same anyway.

If you have a really old card and it has an annual fee, it can be less expensive in the bigger picture to keep it open, in the form of lower interest rates on future loans. On the other hand of course, American consumers are allergic to high upfront prices. We live in a culture of financing.

This topic is highly entertaining. People have advice in all directions about how many cards are best. I personally don't care. You can have a high score with just one card or with forty cards. I have four individual cards, one joint and three AU. Haven't changed a thing for two years. :smileyvery-happy:

Re: 9 accounts in my credit report

JonStur — Sun, 11 Nov 2012 16:11:05 GMT

my-own-fico wrote:
If you usually pay your cards in full by the due date, you might as well pay them by the statement date and get the benefit of a low reported balance. If you take a ten mile walk with someone, it's an option staying next to him rather than two steps behind, as your speed is the same anyway.

If you have a really old card and it has an annual fee, it can be less expensive in the bigger picture to keep it open, in the form of lower interest rates on future loans. On the other hand of course, American consumers are allergic to high upfront prices. We live in a culture of financing.

This topic is highly entertaining. People have advice in all directions about how many cards are best. I personally don't care. You can have a high score with just one card or with forty cards. I have four individual cards, one joint and three AU. Haven't changed a thing for two years. :smileyvery-happy:

+1 Your friend almost had it right. What he meant to tell you was to pay off your balances before the statement reports to the credit bureaus. Look at the statement from each of your credit cards, in the summary they will list the statement date along with your balance, APR, etc.. If you were carrying a score over 700 before you started all this craziness, then I would avoid keeping balances on your credit cards at all if you don't have to. Unless your planning on buying a new home or something, continue to pay your auto loans and keep that extra money in an interest earning account for emergencies..

Re: 9 accounts in my credit report

Shogun — Sun, 11 Nov 2012 17:13:37 GMT

If the CCs have an annual fee and you don't use the card for rewards to make up for it. Close it. If it doesn't have an AF then just sock drawer it. Keep your util below 9% on your revolving. If you have the money for the loans. pay one of them off, then make payments on the other. Just what I would do, YMMV of course. Good luck!