topic Re: How Many Credit Cards For Best Credit Score in Understanding FICO® Scoring

How Many Credit Cards For Best Credit Score

Anonymous — Mon, 20 Aug 2018 12:59:08 GMT

How many cards should one have reporting on his/her credit reports to optimize their credit score.
Considering that all cards have between
2% & 30 % utilization.
I am sure that after a certain amount of cards, your score stops going up.
* Everything else on your report looks great.
Also, I was informed that retail cards dont really effect your credit score as much as normal bank cards ?

Re: How Many Credit Cards For Best Credit Score

SBR249 — Mon, 20 Aug 2018 13:04:03 GMT

I'd say that beyond 3 cards the marginal effect of additional cards on your FICO probably drops to close to nil. Assuming that you are optimizing utilization and reported balances of course.

Re: How Many Credit Cards For Best Credit Score

Shooting-For-800 — Wed, 22 Aug 2018 20:42:09 GMT

I think 5 major cards, installment loan, and a mortgage would rate very well.

Re: How Many Credit Cards For Best Credit Score

HeavenOhio — Mon, 20 Aug 2018 13:48:24 GMT

Three cards will allow you to have less than half of your cards reporting a positive balance, and some say five is better. There's no discernible advantage when going beyond five.

Keep in mind that there's no rush to get there. Also keep in mind that starting with card #3 or #4, there'll be a scoring ding before one starts to see gains. One's first two cards often result in immediate gains, with their mere presence offsetting the dings for inquiries and new accounts. People frequently see those gains and decide to grab several more cards. Then they're unpleasantly surprised to see the fairly major hit to their scores after doing that.

Re: How Many Credit Cards For Best Credit Score

UpperNwGuy — Mon, 20 Aug 2018 13:50:57 GMT

Three.

Re: How Many Credit Cards For Best Credit Score

Medic981 — Mon, 20 Aug 2018 13:52:18 GMT

@Anonymous wrote:
Also, I was informed that retail cards dont really effect your credit score as much as normal bank cards ?

Miss a payment, or default on your retail card and see how it affects your credit score. A line of credit is a line of credit... threat them all with respect.

Re: How Many Credit Cards For Best Credit Score

AverageJoesCredit — Mon, 20 Aug 2018 13:55:30 GMT

@Medic981 wrote:
@Anonymous wrote:
Also, I was informed that retail cards dont really effect your credit score as much as normal bank cards ?
Miss a payment, or default on your retail card and see how it affects your credit score. A line of credit is a line of credit... threat them all with respect.

This*

Re: How Many Credit Cards For Best Credit Score

Anonymous — Mon, 20 Aug 2018 14:21:36 GMT

I wasnt talking about missing a payment.
Everyone knows that missing a payment on any credit card or loan will effect your score !
I was speaking about Chase vs Syncrony bank.
Saphire Prefered vs Lowes etc.
I believe that Regular credit cards are rated higher on your credit report than store cards.
Speaking of points that the CB's give you.

Re: How Many Credit Cards For Best Credit Score

FinStar — Mon, 20 Aug 2018 14:28:13 GMT

OP, the right mix depending on your long term goals is key. Anecdotally and IME, having retail CCs mixed with other major bank CCs, installment accounts, etc., did not prevent me from achieving 850 in the past.

It's not like the FICO scoring model is going to turn up its nose and ding your score for having a Lowe's tradeline next to other bank cards and/or installment or mortgage tradelines. That being said, there are specific types of accounts that will impact your overall profile, such as consumer finance accounts and the like.

Choose wisely, though.

Re: How Many Credit Cards For Best Credit Score

HeavenOhio — Mon, 20 Aug 2018 14:39:22 GMT

FICO normally doesn't care about major cards vs. retail cards. A possible exception is when a retail card is one's only card reporting a positive balance. Some have reported a tiny ding when compared to having that balance on a major card. If AZEO is your objective, leave the positive balance on a major card.

The presence of retail cards does ding the LexisNexis score used in determining insurance rates. For that reason, one should only choose store cards that bring back value beyond simply being able to use the card for making purchases at a particular store.

Re: How Many Credit Cards For Best Credit Score

Anonymous — Mon, 20 Aug 2018 14:48:04 GMT

Thank you for your input !
I have read different things about store credit cards in the past that I just wanted to clear this up.

Re: How Many Credit Cards For Best Credit Score

delaney1 — Mon, 20 Aug 2018 14:52:00 GMT

I’ve seen three mentioned here a lot. Earlier this year I came across some info that said Five was the optimal number to maximize your score.

Re: How Many Credit Cards For Best Credit Score

shadanat — Mon, 20 Aug 2018 14:55:00 GMT

That is probably a misconception because many times store cards have lower limits. However, there are some people who hold store cards with higher limits than a bank card.

Re: How Many Credit Cards For Best Credit Score

Brian_Earl_Spilner — Mon, 20 Aug 2018 17:03:39 GMT

Whether or not a card is retail tends to only matter with selective lenders and applying for a mortgage, but in the big picture, doesn't really matter.

Re: How Many Credit Cards For Best Credit Score

Anonymous — Wed, 22 Aug 2018 19:11:00 GMT

@Brian_Earl_Spilner wrote:
Whether or not a card is retail tends to only matter with selective lenders and applying for a mortgage, but in the big picture, doesn't really matter.

Good point BES. One caveat is that the non-FICO scoring models used by the insurance industry do penalize you for store cards. Unclear by how much. That in turn could conceivably affect a person's monthly premium.

Re: How Many Credit Cards For Best Credit Score

Anonymous — Wed, 22 Aug 2018 21:53:08 GMT

@delaney1I’ve seen three mentioned here a lot. Earlier this year I came across some info that said Five was the optimal number to maximize your score.

While this may be true, it's important to at least attempt to quantify "maximize" your score. My research has shown the average gain of 3 revolvers [at AZEO] compared to just 1 to be 8 points. The proposed gain in going from 3 revolvers to 5 revolvers [at AZEO] has always been less, so while I've never tried to quantify the difference I think it's safe to say that it's less than an average of 8 points. It's also worth noting that as little as 4 points has been cited as the gain in going from 1 to 3 revolvers, so it's conceivable that for some the move from 3 revolvers to 5 revolvers may yield a gain of 3 or less points. My point here is that the scoring gains realized by adding more revolvers while rarely quantified are rather insignificant in many cases. IMO if I were to make a top 5 list of the reasons people should consider adding additional revolvers, potential score gain may make #5 on the list, but possibly not make the list at all.

Re: How Many Credit Cards For Best Credit Score

Shooting-For-800 — Thu, 23 Aug 2018 13:18:29 GMT

One thing to consider...

The more accounts you have the less impact a late will have.

Yes, it will sting, but 1 late with 20 accounts is much different than 1 late with 3 accounts.

YMMV.

Re: How Many Credit Cards For Best Credit Score

Anonymous — Thu, 23 Aug 2018 15:23:14 GMT

@Shooting-For-800One thing to consider...
The more accounts you have the less impact a late will have.
Yes, it will sting, but 1 late with 20 accounts is much different than 1 late with 3 accounts.
YMMV.

I don't know that this is true above. At least not all the time. Maybe in the example of 3 verses 20 accounts, since you're arguably talking a thin file verses a quite thick one. If you're talking two files that are closer in number of accounts, say 7 and 9, I have my doubts that a late would impact those otherwise equal profiles any different.

Re: How Many Credit Cards For Best Credit Score

tooleman694 — Thu, 23 Aug 2018 16:37:47 GMT

I got a big boost from after adding the 1st card, another after the 2nd and a little with the 3rd. I added several more after and nothing happened. My scores are just kind of sitting there not moving, in the upper 600s.

I think I just need time now.

One plus though, is if I let a card report it doesn't change my overall util much and my score doesn't move up or down. If anything 1 or 2 points.

Re: How Many Credit Cards For Best Credit Score

Thomas_Thumb — Thu, 23 Aug 2018 16:49:30 GMT

@Anonymous wrote:
@Shooting-For-800One thing to consider...
The more accounts you have the less impact a late will have.
Yes, it will sting, but 1 late with 20 accounts is much different than 1 late with 3 accounts.
YMMV.
I don't know that this is true above. At least not all the time. Maybe in the example of 3 verses 20 accounts, since you're arguably talking a thin file verses a quite thick one. If you're talking two files that are closer in number of accounts, say 7 and 9, I have my doubts that a late would impact those otherwise equal profiles any different.

Fico scoring looks at the severity of lates, recency of lates and quantity of lates in absolute terms. The models do not use a % of total payments metric for lates. For example, if a profile has five open revolvers with one three year old 90 day late and two recent 30 day lates, adding 5 additional revolvers will not lessen impact of the lates.

However, as BBS suggests, thin profile scorecards may weigh impact of lates differently than on a thick file scorecard. Fico does mention that targeted scoring factors may be assigned scorecard specific signal strengths.