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Valued Contributor
CreditScholar
Posts: 2,300
Registered: ‎01-22-2012
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Re: Why so many cards?


distantarray wrote:

HiLine wrote:

I can leave this question to others to answer. My only question is why having many credit cards helps your FICO score. Not why having many credit cards helps your credit profile. 


Ok in theory after 2-3 cards it won't help at all if you open up 2-3 cards at once, and you NEVER apply for anything else ever again.

 

Does having more credit cards help you get faster into 800? In majority of the Cases yes.

 

Cause majority of people WILL apply for new loans, or credit cards along the way. The most important factor that usually keeps consumers out of the 800 club is Average age of accounts.

 

Now let's say I have 10 credit cards openned today.  and you have 2.

 

5 years down the line I apply for 1 more card or loan. My average age of accounts goes from 5 years to 4.5 years.

 

If you have 2 and apply for one 5 years down the line you'll go from 5 year to only 1.66 years average.

 

usually average age of accounts of 10+ years are required. If you see the video http://www.youtube.com/watch?v=4SsgjAwZ_ZE

 

The fico president states you usually have to be in the 40's to get a close to perfect score.


+1. AAoA is typically the difference between people in the upper 700s vs 800+. I don't think you need to be in your 40s to have 800 though. I'm definitely not 40 (not yet anyways).

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Established Contributor
distantarray
Posts: 2,112
Registered: ‎09-25-2011
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Re: Why so many cards?


CreditScholar wrote:

distantarray wrote:

HiLine wrote:

I can leave this question to others to answer. My only question is why having many credit cards helps your FICO score. Not why having many credit cards helps your credit profile. 


Ok in theory after 2-3 cards it won't help at all if you open up 2-3 cards at once, and you NEVER apply for anything else ever again.

 

Does having more credit cards help you get faster into 800? In majority of the Cases yes.

 

Cause majority of people WILL apply for new loans, or credit cards along the way. The most important factor that usually keeps consumers out of the 800 club is Average age of accounts.

 

Now let's say I have 10 credit cards openned today.  and you have 2.

 

5 years down the line I apply for 1 more card or loan. My average age of accounts goes from 5 years to 4.5 years.

 

If you have 2 and apply for one 5 years down the line you'll go from 5 year to only 1.66 years average.

 

usually average age of accounts of 10+ years are required. If you see the video http://www.youtube.com/watch?v=4SsgjAwZ_ZE

 

The fico president states you usually have to be in the 40's to get a close to perfect score.


+1. AAoA is typically the difference between people in the upper 700s vs 800+. I don't think you need to be in your 40s to have 800 though. I'm definitely not 40 (not yet anyways).


Said close to a perfect score :smileywink:  not 800+ =)

 

although your pretty close to the perfect score "usually" since most people apply for atleast 1 card a year. I have a friend who's 28 who's got a 810 just because he NEVER applied for another card since he was 18 lol he has only 2 cards


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Valued Contributor
thom02099
Posts: 1,326
Registered: ‎08-30-2011
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Re: Why so many cards?

[ Edited ]

HiLine wrote:

distantarray wrote:

HiLine wrote:

I am specifically asking about FICO scores. How lenders view your credit profile otherwise is irrelevant ...


Remember Fico scores are irrelevant if the banks don't like your credit profile.

 


Totally. I'm only concerned about FICO scores in this instance though, since thom02099 claimed that having many cards helped him reach an 800 score faster than having few cards would. 



I don't have ONLY credit cards.  Depending on the CRA, I have 37-40 tradelines, including mortgages, auto loans, and personal loans.  Some are open/some are closed/paid.   My total credit history is also well over 20 years old. 

 

 

Regarding my FICO score and how it relates to MY situation and MY score, I've had the loan TLs for a while, with only a few credit cards just a few years back, and mainly big box store cards.  When I started adding more credit cards and thus more credit limits and thus lower utilisation, that's when my scores started going up significantly.  In looking at my report history from just a few years ago, when I was in the upper 600s (and starting out in the 500s) to today, the fact that I'm now over 800 on 2 of the 3 CRA reports, would support the premise that the additional credit cards that I received over the past couple of years were the MAJOR force in moving my score upward.  It certainly helped that I have 3 AMEX accounts that backdate to 1991 as well, but I have not actually held an AMEX card continuously since 1991. 

 

Right now, I'm at $116,200 in total credit limit on cards, and at ~4% utilisation.  THIS for ME is what got me to 800.  The addition of quite a few more credit cards, along with my total history is what got me there.  But since I'm not applying for any new credit any time in the future, that score only serves as an ego booster and showing what I've accomplished in a relatively short period of time.  I was happy to have scores over 750. I was shocked when they went over 800!

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Re: Why so many cards?

Agreed:smileyvery-happy:

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snowkitty
Posts: 985
Registered: ‎09-10-2012
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Re: Why so many cards?

Mine started out as building credit after so many years of just paying in cash. Then after the first few, it got addictive and I just wanted to hear "Approved". Then it became a quest to get better cards and now I look for rewards that fit my needs. All of my cards serve some sort of purpose for me and I don't regret a single one of them. I never applied for things that I did not want and I have turned down preapprovals and many "shopping cart tricks" because now I just want to tweak what I have. :catvery-happy:

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Senior Contributor
youngandcreditwrthy
Posts: 6,242
Registered: ‎08-16-2012
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Re: Why so many cards?

It's because if something negative were to occur, you'd have many more positive tradelines to offset it..
Also, utilization is a huge factor.
Plus if a lender can see you have $100k of credit managed effectively(low util, high aaoa) vs just $1k of credit managed effectively, they like that.
Idk what it is 100%, but my first $4500 limit card caused my score to jump 40 points! I remember that faitful day; that's when my credit-shunning naivety came to an end.
At some point, you'll want a home or a car; a lender will want to see your credit. Just a fact of life in America, unless you're one of those that thinks you can pay "cash" for everything. Lmao. :-P
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Open123
Posts: 4,155
Registered: ‎02-23-2011
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Re: Why so many cards?


distantarray wrote:

Personally AAOA is something I could care very little about. I've given up the 800 score dream. Even with a terrible AAOA I can maintain a 720-760 without a problem as long as I keep my balances down. Since applying for new cards gets me 100% free vacations every year :smileywink: 

 


Every app fico score I've ever received has always ranged from 725 - 760, and never higher.  

 

I assume it's because I share your preference for going after sign up bonuses.  You know, a couple of years ago, I remember thinking how to try and app strategically for every good sign up bonus.  There was a point where unless the bonus was 50,000, it wasn't even worth an inquiry.

 

So long as I get want I want when I app, I don't care about the score.  I no longer have any fixed loans or mortgages reporting, and was actually denied a card for that reason a few years ago, and was told by a credit analyst my scores will never be the highest since I lack the "highest qualify" loan, which is a mortgage.

 

 

Regular Contributor
Bay_Area_Joe
Posts: 243
Registered: ‎10-05-2012
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Re: Why so many cards?

Very nice explaination.

I like it...

 

A lot...

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Valued Contributor
thom02099
Posts: 1,326
Registered: ‎08-30-2011
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Re: Why so many cards?

Getting more and more cards...like it was said before, it's all about the game between you and the lenders.  How much more can you get.  How much more can your ego be boosted!  :smileyhappy:  The difference is knowing when to quit. 

 

In the words of Monica Geller..."I win, I win"!!!

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