topic Re: "Too many cards" as negative scoring factor? in Credit Cards

"Too many cards" as negative scoring factor?

Anonymous — Mon, 28 May 2012 23:35:33 GMT

Just pulled EQ score from here, and got a negative reason code that I don't recall having seen before:

You have too many credit cards.

Your have more credit cards [?] than other consumers with credit histories of similar length. Your FICO score evaluates the number of open and closed credit cards on your report.

Keep this in mind: Closing credit cards may not help your FICO score. As a general rule, if you don't need or plan to use credit, don't apply for it.

Number of credit cards on your credit report
10 accounts

FICO High Achievers [?] have an average of 4 to 5 credit cards (including open cards, closed cards, and bank cards).
Your have more credit cards [?] than other consumers with credit histories of similar length. Your FICO score evaluates the number of open and closed credit cards on your report.

I'd always understood conventional wisdom to be that there's a ding for too few cards -- three majors and a store/gas needed for best results -- but don't remember seeing anyone with "too many cards" as a negative from FICO.

Does this change the answer to "Should I close some cards?" It looks like thinning the herd wouldn't help until the accounts aged off, which would coincide with an AAoA hit from losing the accounts' history.

Re: "Too many cards" as negative scoring factor?

Anonymous — Tue, 29 May 2012 00:00:30 GMT

First, I wouldnt close any cards. There are many members here with dozens of cards (myself included) that have very high scores. The "negative" factor is that having so many cards increases the likelihood of maxing out those cards therefore during defaulting on those obligations.

Re: "Too many cards" as negative scoring factor?

Anonymous — Tue, 29 May 2012 00:13:59 GMT

What kind of score are you showing? my guess is high. I find that fico always lists reasons why you don't have perfect score. The reasons get picky as you get higher and higher score. But the reasons get less and less helpful.

Re: "Too many cards" as negative scoring factor?

Anonymous — Tue, 29 May 2012 00:23:09 GMT

Me or the OP?

Re: "Too many cards" as negative scoring factor?

pizzadude — Tue, 29 May 2012 00:27:31 GMT

@Anonymous wrote:
What kind of score are you showing? my guess is high. I find that fico always lists reasons why you don't have perfect score. The reasons get picky as you get higher and higher score. But the reasons get less and less helpful.

+1, I agree with the others, I wouldn't go closing any accounts right now because of this message.

Re: "Too many cards" as negative scoring factor?

Anonymous — Tue, 29 May 2012 01:02:16 GMT

Not planning on closing anything, and don't really think I'm anywhere near having too many with a total of 10 open and closed card accounts. That's what made this reason seem noteworthy -- I understand that having dozens of accounts would be unnerving to lenders, but I've never heard of FICO caring about having too many.

And I have what I thought would be a bigger issue that didn't show up; my mortgage has aged off, and I've always written checks for cars, so I was expecting to see something about the absence of mortgage, auto, or installment accounts. So they're giving a factor that (as far as I know) nobody has ever seen as outranking zero installment history showing on the file. And I'm nowhere near nosebleed territory where people start seeing picky reasons -- just 723.

Re: "Too many cards" as negative scoring factor?

Anonymous — Tue, 29 May 2012 01:24:41 GMT

if it was 10 open accounts then maybe, but not really IMO.

but giving a reason of 10 open AND closed ........... that's lame. What impact can a closed (positive) account have on denying credit?

Re: "Too many cards" as negative scoring factor?

Anonymous — Tue, 29 May 2012 01:24:54 GMT

Hate not to give more advice. But this is a mystery to me. What is your oldest account length and aaoa? I wouldn't close anything just to meet this problem. For sure, a big base of cards will help you in the future if you need new cards. I would just ignore and move on.

Re: "Too many cards" as negative scoring factor?

Anonymous — Tue, 29 May 2012 03:10:28 GMT

Agreed on ignoring it. Just didn't know what (if anything) to make of this reason. Except for consumer finance loans, I'd never seen any dings from FICO for too many of any type of account.

AAoA is showing a little over two years. Oldest account showing is just short of four years. Maybe 10 accounts is a lot compared to others in my bucket? Still, never saw them squawk before about anybody having too many cards.

Short-term plan is to try to get recent Zync backdated to 1994, then get a couple more cards from Amex. That'll do wonders for my "oldest account too recent" and AAoA troubles.

Re: "Too many cards" as negative scoring factor?

Anonymous — Tue, 29 May 2012 05:38:12 GMT

Yeah maybe a lot for your bucket. But as your accounts age, I doubt 10 accounts will be considered a lot. I know people with 30+ cards and don't get that mesage

Re: "Too many cards" as negative scoring factor?

Anonymous — Tue, 29 May 2012 05:41:07 GMT

There might be something in the formula that estimates number of cards in comparison to your oldest account. My average account age is 2 years, but my oldest account is 12, I have over 20 open and closed credit cards on my report and never saw that message.