topic Re: Too Many Credit Accounts - What Should I Do? in Understanding FICO® Scoring

Too Many Credit Accounts - What Should I Do?

Anonymous — Tue, 22 May 2012 15:36:18 GMT

My Transunion score is 740, and I am trying to get it above 760. One of my problems is, according to Transunion, I have too many credit accounts. I am trying to figure out what I should do about this? It says I have 50 accounts! Here are some facts:

1) 8 of the accounts are student loans

2) 5 of the accounts are regularly used credit cards, which offer me about $40,000 in credit.

3) 1 account is for my vehicle

4) My credit limit is: $56,624, and I pay off 4 of the 5 credit cards each month. The 1 that doesn't get paid off is because I let my aunt use it, and it usually has a $500-$1000 balance on it. My debt ratio is currently 4%.

I do plan on applying for a mortgage in the next 1-2 years (although due to a December 2007 60 day late payment, I am wondering if I should wait until early 2015 when this comes off and my score rises, but I'm not sure if it will rise enough to consider waiting), and I have heard it isn't a good idea to close accounts prior to applying for loans. I also realize it isn't in your best interest to close old accounts, because it will affect my debt ratio. So my question is.....would it be a good idea to close some of the newer accounts that I no longer use, in order to lower the total number of accounts, and possibly increase my score? The average age of my accounts is 6 years, so I was thinking it may be best to close any that I am not using and are not older than 6 years, since that will also increase the average age. Should I close them all within a certain time frame? Or space them out?

Sorry if I made this too complicated. If you have any questions, feel free to ask. I appreciate you reading, and any assistance!

Re: Too Many Credit Accounts - What Should I Do?

pizzadude — Tue, 22 May 2012 15:40:22 GMT

@Anonymous wrote:
My Transunion score is 740, and I am trying to get it above 760. One of my problems is, according to Transunion, I have too many credit accounts. I am trying to figure out what I should do about this? It says I have 50 accounts! Here are some facts:

1) 8 of the accounts are student loans
2) 5 of the accounts are regularly used credit cards, which offer me about $40,000 in credit.
3) 1 account is for my vehicle
4) My credit limit is: $56,624, and I pay off 4 of the 5 credit cards each month. The 1 that doesn't get paid off is because I let my aunt use it, and it usually has a $500-$1000 balance on it. My debt ratio is currently 4%.

I do plan on applying for a mortgage in the next 1-2 years (although due to a December 2007 60 day late payment, I am wondering if I should wait until early 2015 when this comes off and my score rises, but I'm not sure if it will rise enough to consider waiting), and I have heard it isn't a good idea to close accounts prior to applying for loans. I also realize it isn't in your best interest to close old accounts, because it will affect my debt ratio. So my question is.....would it be a good idea to close some of the newer accounts that I no longer use, in order to lower the total number of accounts, and possibly increase my score? The average age of my accounts is 6 years, so I was thinking it may be best to close any that I am not using and are not older than 6 years, since that will also increase the average age. Should I close them all within a certain time frame? Or space them out?

Sorry if I made this too complicated. If you have any questions, feel free to ask. I appreciate you reading, and any assistance!

Welcome to the forums ! Can I ask if you pulled this score directly from TU ? Or from MyFICO ?

TU does not sell a FICO credit score. They sell their own FAKO score, and if you are going to apply for a mortgage then you really need to pull a FICO score.

Also, the "advice" on most FAKO websites generally won't help your FICO score, and in some cases it can actually lower your FICO score.

Re: Too Many Credit Accounts - What Should I Do?

Anonymous — Tue, 22 May 2012 15:47:47 GMT

Thank you for the kind welcome!

I pulled it directly from MyFICO. As far as those FAKO websites, I have been a member of freecreditscore.com for a while. I figure for only $7/month, getting an Equifax report, and having it track everything is probably worth it. Am I most likely wasting my time on there? According to that site, my score just went down 9 points to 722 due to a hard hit a few days ago. What I want to do is, before I apply for any mortgage loans, is to move from the "very good" to "great" status, for obvious reasons.

Re: Too Many Credit Accounts - What Should I Do?

pizzadude — Tue, 22 May 2012 16:18:09 GMT

@Anonymous wrote:
Thank you for the kind welcome!

I pulled it directly from MyFICO. As far as those FAKO websites, I have been a member of freecreditscore.com for a while. I figure for only $7/month, getting an Equifax report, and having it track everything is probably worth it. Am I most likely wasting my time on there? According to that site, my score just went down 9 points to 722 due to a hard hit a few days ago. What I want to do is, before I apply for any mortgage loans, is to move from the "very good" to "great" status, for obvious reasons.

I wouldn't pay attention to the scores and advice you get there ~ they are FAKO scores. You can use it for monitoring your credit reports, that's probably about all I would advise.

The Equifax FICO score sold here at MyFICO ( and also from Equifax.com http://www.equifax.com/credit-report-history/ ) is the same score that mortgage lenders use.

The TU score sold here at MyFICO is TU98 which is an older score model and although it is a FICO score, it isn't the same score that mortgage lenders use ~ they will pull the TU04 FICO score.

Re: Too Many Credit Accounts - What Should I Do?

Anonymous — Tue, 22 May 2012 16:25:20 GMT

@pizzadude wrote:
@Anonymous wrote:
Thank you for the kind welcome!

I pulled it directly from MyFICO. As far as those FAKO websites, I have been a member of freecreditscore.com for a while. I figure for only $7/month, getting an Equifax report, and having it track everything is probably worth it. Am I most likely wasting my time on there? According to that site, my score just went down 9 points to 722 due to a hard hit a few days ago. What I want to do is, before I apply for any mortgage loans, is to move from the "very good" to "great" status, for obvious reasons.
I wouldn't pay attention to the scores and advice you get there ~ they are FAKO scores. You can use it for monitoring your credit reports, that's probably about all I would advise.

The Equifax FICO score sold here at MyFICO ( and also from Equifax.com http://www.equifax.com/credit-report-history/ ) is the same score that mortgage lenders use.

The TU score sold here at MyFICO is TU98 which is an older score model and although it is a FICO score, it isn't the same score that mortgage lenders use ~ they will pull the TU04 FICO score.

Thanks again, now that I am aware, I think I will stick with scores that are FICO related. Now that I know that, I guess my next step is figuring out the best way to raise my score and what my reasonable goal should be, in order to get the best rate on a loan.

Re: Too Many Credit Accounts - What Should I Do?

Anonymous — Tue, 22 May 2012 19:07:06 GMT

After doing some more research, it looks like there isn't much I can do. Just wait until the 10 years after closing date has hit, and they drop off.

Could anyone tell me if:

1) I should wait until 2015 to apply for a mortgage payment (after my 60 day late payment drops off)? From what I've read, it seems like this may not be affecting me at all because it is so old (4.5 years). I did write a letter and sent it off today, so maybe I'll get lucky with that.

2) Since my AAoA is 6 years, should I close accounts that I no longer use, and are less than 6 years old?

3) Do my student loans affect my credit score at all? I thought I read that they didn't, but I don't see how that is even remotely possible.

Thanks!

Re: Too Many Credit Accounts - What Should I Do?

RobertEG — Tue, 22 May 2012 19:08:19 GMT

Closing the newer accounts wont improve your AAoA, as all OC accounts, open and closed, are included in your AAoA calculation. I wouldn't recommend closing anything.

To obtain AAoA improvement, the creditor would have to report deletion of the entire account. Your AAoA is now solid, but not at the level associated with highest scores, so only time will reap you improvement in the 15%-weighted length of credit scoring category.

You dont seem to have spurious, "sock-drawer" accounts, so I agree with other posters. Ignore the comment that you have "too many accounts."

I would attempt to GW the old 60 late to garner a few points, but that is not a biggie. At five years, its impact is now low.

My advice... just keep doin what you are doin. Let auntie know a month or so before you app to keep her util at a min to garnish the few additional indiv acct and overall % util pts.

Re: Too Many Credit Accounts - What Should I Do?

Anonymous — Tue, 22 May 2012 19:22:18 GMT

That's great, thank you Robert! I do have one last question.

If "too many accounts" and my 60 day late payment are the only things pushing my score downward, what more can I do to push it upwards? My utilization is at 4%, so I'm not sure how I can improve on that very much. According to my TU Report, I only have 1 inquiry. I pay my cards off in full each month, except for the one. I suppose I could try and pay off my student loans, but I'm not sure how much that would really help me. If I just continue to do what I'm doing, how will my score rise, except for the increase in AAoA?

Re: Too Many Credit Accounts - What Should I Do?

pizzadude — Tue, 22 May 2012 19:45:36 GMT

I concur with Robert's advice - I wouldn't close accounts right now. And don't worry about the too many accounts reason.

You don't need to wait for the late payment to drop to go ahead and app for a mortgage, but keep up with the GW requests.

Student loans are installment loans, and they are scored by FICO like other installment loans. Installment utilization is a much smaller component of FICO scoring than revolving utilization however, so you won't be dinged for carrying balances like you would if they were credit card accounts.

Re: Too Many Credit Accounts - What Should I Do?

Anonymous — Tue, 22 May 2012 20:02:49 GMT

Sounds great. Thanks Pizzadude and Robert, I really appreciate your input! I feel like this definitely puts me on the right track. Hopefully one day I'll be a Hich Achiever!

Thanks again!

Re: Too Many Credit Accounts - What Should I Do?

Roarmeister — Tue, 22 May 2012 21:52:07 GMT

I concurr on the advice already given. And although a CS of 760 and higher is advantageous for seeking the lowest interest rate, a TU score of 740 isn't that bad either. You are close to the median score (FICO 723). Let the old accounts drop off naturally after they are paid. Closing accounts early doesn't seem to net any real benefits and may actually hurt. Paying of the student loans earlier can help because it will leave you with greater ability to pay the mortgage and allow you to have a larger payment.

Even if you get a mortgage now, you won't be dinged as severely as someone with a 680 score. As for buying a house vs renting right now you will have to take into consideration your local market conditions. Whether or not the market in your area has bottomed, whether you want to buy now, and if you can find what you want and the terms you prefer. I would probably do some gardening right now while you are perusing the market place for a residence and paying off as much debt as you can. Don't worry about the late payment baddie needing to fall off in 3 years. Looking for perfect credit before getting the mortgage, you may miss a window of opportunity.

Then when you feel comfortable, jump in with both feet. Actually getting a mortgage adds to your debt variety and normally increases your score. Mine rose over 50 pts which included one baddie dropping off over a 3 month period just before and just after getting my mortgage. You can get additional mortgage advise from the mortage loan forum.

Re: Too Many Credit Accounts - What Should I Do?

Anonymous — Tue, 22 May 2012 21:49:02 GMT

Thanks Roar. Yeah, I figure I shouldn't comlpain with a 740 score, but with the way I think, I'm always trying to improve. I just wish I had started about 10 years sooner.

I could definitely be paying down my student loans, but instead I put an additional $1k or so per month into my retirement. I just figure I can, on average, gain more interest there than I would pay on my student loans. Not to mention I can write off some of my student loan interest.

The mortgage probably won't come along until mid to late 2013. We're going to Vegas in late June, and I plan on propsing then. Hopefully that will start the chain reaction ($500 wedding, backyard bbq, honeymoon to the nearest beach ), and that will eventually lead to the biggest purchase. I just want to be sure I'm prepared for it. She has told me she has good credit, but I've never had the luxury of actually verifying it, so I'm sure that will come into play as well.

As cheap and frugal as I am, I just want to be sure (or at least know I did all I could) I am able to get the best interest rate, especially knowing it's something I affect.

Sorry, probably a bit too much information, but there's my life story in a nutshell

Re: Too Many Credit Accounts - What Should I Do?

Anonymous — Wed, 23 May 2012 00:23:44 GMT

Are you sure you are at 4% utilization? Remember this is reported utilization which usually means you need to pay any balance and make no new charges before a statement is generated and not when it is due.

Re: Too Many Credit Accounts - What Should I Do?

AndySoCal — Wed, 23 May 2012 00:53:09 GMT

There are two FICO reasons that have similiar starting verbiage. The first is Too many accounts recently opened. the other one is Too many accounts with balances. You can get the second one even if you pay the balance in full each month. The creditor reports the balance when the statement cuts. Sometimes I will get this message if I have 4 out of six cards reporting a balance with the utilization less than 5%. Try paying some of the credit card balances before the statement date and see if that helps your score.

Re: Too Many Credit Accounts - What Should I Do?

Tuscani — Wed, 23 May 2012 18:15:04 GMT

The only area of scoring where closing an account can hurt you is in the revolving utilization calculations. While a closed revolving account with a balance is included in utilization, a closed account with a zero balance is not.

In the area of length of credit history, closed accounts are treated no differently than open accounts. That is, the length of history on a closed acct still gets counted right along with the rest of the closed account's history. In fact, the length of credit history gets counted for every trade line on your report, regardless.

So, the only harm by closing a revolving account is to the utilization percentage, while, in the long run, a closed account will be removed from your credit file after 10 years, which could lower your score at that time due to the loss of that history.

Re: Too Many Credit Accounts - What Should I Do?

Anonymous — Sat, 26 May 2012 01:01:50 GMT

Whay is GW? Is it a form of disputing a late tradeline, or is it a bargaining technjqud.

Does it stand for Good Will? Is there a sample letter to use?

Re: Too Many Credit Accounts - What Should I Do?

llecs — Sat, 26 May 2012 01:15:23 GMT

@Anonymous wrote:
Whay is GW? Is it a form of disputing a late tradeline, or is it a bargaining technjqud.

Does it stand for Good Will? Is there a sample letter to use?

Check these out:

Common Abbreviations

Credit Scoring 101 - great for knowing what is in your credit score and to see how your score is impacted.

What Steps Do I Take - great for learning the repair process.

and Example letters - PFDs, GWs, DVs, etc.

Re: Too Many Credit Accounts - What Should I Do?

Anonymous — Mon, 02 Jul 2012 19:36:10 GMT

@Anonymous wrote:
Thanks Roar. Yeah, I figure I shouldn't comlpain with a 740 score, but with the way I think, I'm always trying to improve. I just wish I had started about 10 years sooner.

I could definitely be paying down my student loans, but instead I put an additional $1k or so per month into my retirement. I just figure I can, on average, gain more interest there than I would pay on my student loans. Not to mention I can write off some of my student loan interest.

The mortgage probably won't come along until mid to late 2013. We're going to Vegas in late June, and I plan on propsing then. Hopefully that will start the chain reaction ($500 wedding, backyard bbq, honeymoon to the nearest beach ), and that will eventually lead to the biggest purchase. I just want to be sure I'm prepared for it. She has told me she has good credit, but I've never had the luxury of actually verifying it, so I'm sure that will come into play as well.

As cheap and frugal as I am, I just want to be sure (or at least know I did all I could) I am able to get the best interest rate, especially knowing it's something I affect.

Sorry, probably a bit too much information, but there's my life story in a nutshell

Ok, well, sorry to bump an old thread and quote myself, but I thought I would give an update.

I did pop the question, and she said yes!

I've already started looking around for a home, but the purchase probably won't be until early 2013, so it will be a little while before I apply for the loans. Hopefully I can get into the "Very Good" status before then.

I also wrote a letter to have the 1 delinquent account (60 day late payment in 12/2007) removed from my account. I sent it certified, and it was received in late May. Should I hear from them with the final verdict at some point ? Or should I just keep an eye on my report(s) to see if it is dropped? Do they have 30 or 60 days to make a decision? After that, doesn't it have to be dropped?

Thanks for reading!

Re: Too Many Credit Accounts - What Should I Do?

webhopper — Wed, 04 Jul 2012 18:26:56 GMT

Congrats! Hopefully you will hear back from them soon. What are your scores looking like?

Re: Too Many Credit Accounts - What Should I Do?

scmami — Thu, 05 Jul 2012 04:20:39 GMT

Congrats! How exciting! GW letters are just that...goodwill of the company deciding to remove or not report something negative on your report. They are not required to respond to the GW request in a certain time period or at all. (You may be thinking of DVs)