How Many Accounts Should I Let Report a Balance?

[smallfry]

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@fused wrote:

I promised myself that I would refrain from posting on this subject again.

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Well fused you have very high scores so perhaps you could help out a little here. I would appreciate it. I'll give you a specific example and maybe you could tell me how you would handle the situation. I have a car loan and one store card. I have five credit cards. The car loan reports a balance every month. How many of the five credit cards would you allow to report a balance on the cut date? I have been allowing two. So including the car loan I have three accounts reporting balances every month. My utilization is between 1-2%. That is all I can charge based on my monthly spending patterns. What say you?

[andyaycw]

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@smallfry wrote:
I think the OP should let every tradeline he has report a balance of 9% and see what FICO says. He could bring it down by 1 TL every month until he reaches his magic number. Tell you what I have noticed on my reports. Once my total of all accounts reaches 30 I get the red flag. Anyone else notice this? I have now seen it on my Experian and Equifax reports. Since my TU only shows 28 total accounts I have not seen it there.

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That's very sound advice, and I would probably go ahead and do that if I weren't scared of Amex F/R

After I opened Amex, I opened three other accounts, which I am afraid will catch their eye and think I'm getting desperate for credit. Likewise, I don't want to run a balance on four accounts, making me look overextended on my credit, and consequently make me look like an even larger risk.

Perhaps I should wait 6 months or so for things to settle down before I do this experiment.

[smallfry]

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@andyaycw wrote:

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@smallfry wrote:
I think the OP should let every tradeline he has report a balance of 9% and see what FICO says. He could bring it down by 1 TL every month until he reaches his magic number. Tell you what I have noticed on my reports. Once my total of all accounts reaches 30 I get the red flag. Anyone else notice this? I have now seen it on my Experian and Equifax reports. Since my TU only shows 28 total accounts I have not seen it there.

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That's very sound advice, and I would probably go ahead and do that if I weren't scared of Amex F/R

After I opened Amex, I opened three other accounts, which I am afraid will catch their eye and think I'm getting desperate for credit. Likewise, I don't want to run a balance on four accounts, making me look overextended on my credit, and consequently make me look like an even larger risk.

Perhaps I should wait 6 months or so for things to settle down before I do this experiment.

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Congrats on the AMEX pickup but they aren't worth the worry IMHO. IF you want to keep your AMEX I do not recommend that you do this experiment. LOL.

[fused]

JK! I would be happy to jump in here. I love discussing the subject the OP posted. It excites me! This subject along with closing CCs, util% calculations on both revolving and installments TLs and FICO scorecards have become hobbies for me...I know it sounds sick but I can't help myself.

 These are not easy questions to answer as it involves a whole lot of others factors: util% calculations, scorecard issues and etc. I will have my suggestions posted by tomorrow...yes, it will probably be a lengthy post. 

Message Edited by fused on 09-29-2007 10:51 AM

[smallfry]

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@fused wrote:

JK! I would be happy to jump in here. I love discussing the subject the OP posted. It excites me! This subject along with closing CCs, util% calculations on both revolving and installments TLs and FICO scorecards have become hobbies for me...I know it sounds sick but I can't help myself.

These are not an easy questions to answer as it involves a whole lot of others factors: util% calculations, scorecard issues and etc. I will have my suggestions posted by tomorrow...yes, it will probably be a lengthy post.

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Oh no. A cliffhanger. I will not change the channel.

[Anonymous]

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@smallfry wrote:
I think the OP should let every tradeline he has report a balance of 9% and see what FICO says. He could bring it down by 1 TL every month until he reaches his magic number. Tell you what I have noticed on my reports. Once my total of all accounts reaches 30 I get the red flag. Anyone else notice this? I have now seen it on my Experian and Equifax reports. Since my TU only shows 28 total accounts I have not seen it there.

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I see the flag on MyFICO for over 30 too. I wonder if everyone is flagged for over 30 accounts. I like the idea you have for reducing all balances to see what happens for each person as a test. They could reduce each balance by 2-3 monthly to start with for faster results. This is something definitely each person would have to test individually to see how they are effected. So far I have seen 3-4 or not effected at all, nothing in the middle. But I'm still waiting to find someone that says they are flagged for 7-8, ect. I would recommend just charging something the day after statement closing date then paying in full each month. This will usually report as a balance on the CR. It is my guess that lenders can see paid in full, or at least the lender issuing that card. I'm hit for -18 points when I exceed 4 balances still. But I also max out credit cards all the time so that might be a key factor playing a role. Maybe CR's that show all High Limits / CL are flagged for too many balances while others with lower High Limits / CL are not flagged. Still trying to learn why I am flagged and others are not.

[fused]

Scorecards, scorecards, scorecards!!!

Figuring out how many accounts (CCs are what we are concerned most with here) you should have reporting balances can be tricky. I'm beginning to rethink my assertion that everyone should have all of their revolving accounts reporting 1-9% util. Personally, it has given me some additional points. I ran all of the tests with my CCs, from PIFall of my CCs to all of my CCs (except my crappy Macy's) reporting 1-9% util.

I'm well aware of how many accounts with balances high achievers have. But there is so much more going on with the scoring than just accounts with balances. IMHO, I believe FICO scorecards (aka buckets, pools or tiers) are at play here. For some, 1-9% util reporting on all revolving accounts boosts their scores, maybe they even achieve max FICO points from the standpoint of FICO util% calculations scoring, while others do not. It really depends on which scorecard you're in.

Scorecards ensure that mangos are compared with mango, and not mangos with papayas. Your risk (score) is determined by how well you manage your credit with others who have a similar credit file. In an ideal world each of us would know which scorecard we're in and know the best ways to outperform the others. But since we really don't know which scorecard we're in and also have no clue on what is a good action or bad action, we're left guessing and having to experiment. Scorecards are not only a huge factor in scoring with regard to util%'s and determining how many accounts should you have reporting balances, they also determine how much your scores will increase or decrease when you apply for credit (inq(s) plus a new account), paying down debt particularly revolving accounts and etc. Here is another example of how scorecards can affect scores.

- Person A scores at 770, applies for a new CC and this account and 1 new inq reports. I will nearly guarantee this person's scores are going to drop a lot. Why? Because others in their scorecard are not applying for new credit.

- Person B scores at 620, and does the same as Person A will more than likely take a smaller hit than Person A. Why? Well as we all know at these forums, many in the 620 (not sure if it is really called the 620 scorecard but you catch my drift) club are apping and trying to build or repair their credit.

In closing, what works for one may not work for others. To the OP, just experiment and see what nets you the best results. Don't hate scorecards...if your scores suddenly drop for no apparent reason this might mean you moved-up a scorecard and now your treading water. In time your scores will come back up provided your not being outperformed by the others in your scorecard. Without scorecards it would be virtually impossible for anyone to improve their scores. It would seem everyone with low scores stay at bottom while others with high scores would have no fear of falling.

[haulingthescoreup]

Thank you, fused. I'm not even going to try to quote that.

So the fact that my scores are beginning to move along might mean that I'm starting to look better than all the other poor debtors in my scorecard/ club/ blob, and if I should in fact finally float out of this blob into the next blob, I will then be back down in the muck and goo with the other bottom-feeders of this new blob, until (one hopes) I start clambering upward toward oxygen, and scores will start rising again, and then into the bottom of the next blob, and so on?

If I understood you correctly, this is how upward mobility works in the world of credit. Not very appetizing in the short run, but I can see how this might be. I feel like some sort of video game creature, moving from one level to the next.

EQ: 654 (@#$%&!!!) --apparently, EQ hates lates
EX: 691
TO: 681

[haulingthescoreup]

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@smallfry wrote:
I think the OP should let every tradeline he has report a balance of 9% and see what FICO says. He could bring it down by 1 TL every month until he reaches his magic number. Tell you what I have noticed on my reports. Once my total of all accounts reaches 30 I get the red flag. Anyone else notice this? I have now seen it on my Experian and Equifax reports. Since my TU only shows 28 total accounts I have not seen it there.

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smallfry, I am alarmed to find that there is still a red flag out there that I have not yet acquired. Are you on the Credit-at-a-Glance screen/ page? These "accounts reaching thirty" --are you talking about 30 accounts total (open and closed), 30 accounts open, or 30 accounts showing balances?

I am determined not to get any more red flags. I don't want my report looking like a putt-putt course. thanks

[Anonymous]

The one I just looked at had 32 total accounts of which about half of them were closed. This profile was also flagged for too many accounts. I recommended for this person to remove newer "closed" revolving items from the CRA's and not to close any open accounts. This will increase average age with out closing any open trade lines. So for this profile it was a total number of accounts not open number. Just misc info.