Total Accounts Question

[Anonymous]

I saw a chart that broke down the "Total acounts" thats part of  (Amount of Debt, 30% of your score) and how it effects your score.  

It said 21+ accounts is excellent, 11-20 is Good, 6-10 is poor and 0-5 is very poor,

I don't want to debate the merits of those numbers, but my question is,

"Are they refering to Revolving acounts, Installment Accounts, total tradelines...?"

Thanks,

Brew

[Anonymous]

Total accounts, all types included.  It also includes accounts that are either open or closed.  This number ultimately makes up what we refer to as "file thickness" and in no way do you need as many accounts as are displayed on one of those goofy charts.  I know places like CK show those number ranges and lead you to believe that adding more accounts will somehow improve your score.  They show these images to try and get people to apply for credit products they don't need.  A new CC, a personal loan, a loan refi, etc.  As long as someone has 5-7 accounts, their file is no longer "thin" and adding additional accounts isn't going to do anything.  Of course, "Credit Mix" also matters, that means having more than just 1 account type. 

[Anonymous]

You got that from Credit Karma and should be taken with a ton of salt but to answer your question, that page accounts for all accounts closed or open, all accounts. From what I read here, 3 accounts is all that is needed to maximized your FICO, although some say 5 accounts.

[Anonymous]

I would say one needs at least 4 accounts to maximize their FICO score, because one needs 3 revolvers alone to maximize score.  On top of that, you'd need to add an installment loan, bringing you to 4.  Some argue that 5 revolvers as opposed to 3 can yield a greater point return, but I'm not sure I buy that.  Anyway, 4 I would say would be the minimum number and 6 would be a lock when it comes to a thick (vs thin) file.

[SouthJamaica]

---

@Anonymous wrote:

I saw a chart that broke down the "Total acounts" thats part of  (Amount of Debt, 30% of your score) and how it effects your score.  

It said 21+ accounts is excellent, 11-20 is Good, 6-10 is poor and 0-5 is very poor,

I don't want to debate the merits of those numbers, but my question is,

"Are they refering to Revolving acounts, Installment Accounts, total tradelines...?"

Thanks,

Brew

---

You should disregard those statements. I know Credit Karma makes those comments, but they're false.

You can have perfect credit scores with 3 credit cards.

[Anonymous]

---

@SouthJamaica wrote:

---

You can have perfect credit scores with 3 credit cards.

---

I think it's important to differentiate between perfect credit scores and maximized credit scores, though.

[Anonymous]

The only reason you can have perfect credit scores with 3 cards is because there's float in FICO scoring -- there are MORE than 550 available points, but it is extremely unlikely to get to 850 without having a very very aged profile.

If you want to maximize your score before you've got 15+ year old accounts, you really do want 5 credit cards, but it takes 24 months to age all of them enough to remove any possible ding from new accounts or young accounts.  3 cards is "free" because it offsets that penalty.

The folks with 850s and only 3 credit cards have crazy long history.  The folks with younger profiles at 850 have more than 5 credit cards.  When you compare profiles side by side at 850, you can see this quite easily.