1, 2, or 3 credit cards?

[Anonymous]

So I read that it is recommended to have three credit cards when trying to rebuild credit. Is this true or are 1-2 cards just as effective too?

From what I understand, it is suggested that two of the three cards have a zero balance while one have a utilization under 10%. Why is this? If two cards aren't showing signs of use why have one?

My best guess is that it helps with the number of revolving accounts that I would have.

I currently have a Capital One secured card with a $300 dollar limit.  I don't know what all I I might get approved for other then maybe other secured cards.

Should I apply for more at the moment even though I have only had this card for a month or two or should I wait?

My apologies for all of the questions. I am sure many of them could be answered using a search function. I will get to work on that. It's just nice getting answers to your own specific situation vs. one that may be a little different.

Equifax: 531

TransUnion: 484

Experian: 538

All of which are subject to change shortly after my last delinquent account is removed. For some reason my last credit union never reported that I was paid in full.

[crrredit]

Having three has worked great for me. I had to get three secured cards. I got them all pretty much at the same time, the thinking being that I needed to start building as much positive credit as possible, and that inquiries at that point wouldn't hurt me much and good credit would help a lot. So why wait? For some reason, three accounts with one reporting below 10% of it's limit is the magic formula for maxing out your score. It's not that anybody here knows why, they have just crowdsourced the pattern using the results of many people over time. 

After a few months with your Cap One secured, you can try for an unsecured Platinum and/or Quicksilver One. Many people here have done that. I waited 6 months and then got the QS1. I'd say get your three cards as soon as you can, and don't worry if they are secured. You don't have to have large limits on those cards to build your score effectively.

Welcome to the boards.

[Anonymous]

Do you know of any well known/reputable secured cards other then Capital One's Secured card?

How long did it take three secured cards to help you achieve your current credit score?

[crrredit]

After about 6 months I was able to get unsecured card. I probably could have done that faster, especially with Cap One. I got a Cap One, FNBO and First Progress secured card to start.  All have worked out for me. First Progress was my first, because my scores were in the 400s. They are not what I would call a great option, but I have nothing bad to say about them. Just be careful, First Progress is not First Premier, which is a really bad choice.  FNBO is a good choice, but be ready to show some patience. It took 2 months to get approved and receive my card. They do more manually than some places. If you can get a Bank of America secured, that's good and it graduates, which is nice but not really critical. There are a couple national credit unions mentioned a lot on these boards that are good options. Sorry, don't have the names right off. If you are a member of a credit union, check with them as well. Lots of people here also go for Open Sky, which I think doesn't even do a hard pull. 

Since you're new here, I suggest doing some research on these boards. There are spreadsheets that show the many options, and there are many discussions about secured cards. You'll learn a great deal in the process. I did, that's for sure.

[Anonymous]

I have an American Express Green and a Wells Fargo card and I am an authorized user on 3 and it has worked great for me. 

[Anonymous]

Thank you so much!

So now I must ask....

If I go about getting three secured cards in order to build credit, won't I be going backwards and hurt my credit later on when I might decide to close and get different unsecured cards?

[Anonymous]

The reason for at least three cards is this:

The FICO scoring algorithm has a portion called UTI%. Mostly its about how much reported balance you carry in relation to your credit limits - but its got many other components as well. One of these is that you lose points for not carrying *any* balance at all. But you also lose points for carrying a large balance, so the solution there is to carry a small balance of less than ten percent.
Another one is that you lose points for carrying a balance on half or more of your revolving accounts. So if you only have one or two cards, you cannot satisfy the above requirement of carrying a small balance without getting penalized for carrying a balance on half or more of your accounts. So hence the recommendation for at least three cards. That allows you to carry the small balance, but avoid the hit for too many cards carrying a balance.

[Burned2manybridgesB4]

Mortgage guidelines require three open trade lines of credit which have been in use for at least twelve months, and paid as agreed, which is the primary reason to target that amount. It can be two cards, and a car loan. Mix and match...

Don't carry a balance if you don't have to, but read about the techniques to 'let a balance post.'

Norman's right about keeping the utilization reported under 10% for max results though.

[Anonymous]

Also - if you get a secured card and use it for at least 12 months......then close it because you are able to get unsecured cards - it still sits on your report for 10 years from the date of closing (maybe longer - I have a couple on my EQ that were closed almost 12 yrs ago).   As long as you pay on time it will report as a positive account - helping your AAoA.