One of the reasons that 3 cards is considered the sweet spot for scoring is because
of how it seems FICO8 plays with card utilization. It is suggested that there is a utilization
tier at < 50% of cards held reporting a balance for the month. If true, then with two cards it
is impossible to get the points bump for meeting this tier. One card reporting a balance is
50% (not less than 50%) and no cards reporting a balance for the month is a well known
ding for no recent credit usage. Likewise, for the purposes of getting the benefit of this there
is no advantage in going from 3 cards to 4, but there is for going from 4 cards to 5. The
exact formula for FICO8 is of course proprietary and secret, but there seems to be good
evidence for the monthly utilization calculations working something like this.
To me, there is nothing as nonsensical in credit scoring as how FICO8 deals with monthly
credit card utilization. The little tricks you can find on line definitely will work for month to
month scoring tweaks. Why/How that has anything to do with quantifying creditor risk is pretty
hard to see.
+
850 FICO8 since 2015, Thanks MyFICO - 5+ years since last HP
@Anonymous wrote:Thanks everyone. Given what has been said, I think I will sit on these cards for at least a few months and see if something else comes up.
The combination of the two cards have rewards that cover the bulk of my expenses. I can use both without any real disruption to my daily routine,or incurring any new expenses. I'm just shifting money I would normally spend anyway to run through the card before being paid by me.
@Gmood1 wrote:It also won't hurt to allow some usage to report IMO. Optimizing scores is one thing, though scores are just one facet of future approvals. True history of showing what you payed is big IME so far. You can't do that in most cases if you pay the bill before the statement even cuts.
That makes sense.
@Anonymous wrote:Reading your initial post only gives me a very small snapshot of your needs and position...[snip].... be a sponge.. read this site and many others. Be calculating and have short and long term plans.
I guess for now my short term goals wouldbe to get my fico scores up, and start showing a current history of responsible payments. I do have two other accounts on my report that were in good standing with no marks, but both were closed around six years ago....one by me, and one just because I forgot about it.
I should probably think more about what the long term goals are with this.
Getting short term FICO points: a 3rd card is helpful in that, because you get a little bit more with 2 out of 3 cards reporting at zero, than with 1 out of 2 reporting at zero.
Showing history of responsible payments: 2 cards are as good as 3 for that purpose.
@ KDM She's probably talking about a share secured loan. Which cost next to nothing to do. It can bump your score 30/40 points if you don't have any installment loans. I did this a month ago. Even with other installments reporting it still seems to be keeping my scores stable buying two cars and trading in another.
The shared loan is an option many can take. I think the thing is you want to make sure you know what you are doing, and that it is definitely something you can handle.
