topic Re: How high can I score with a small number of tradelines? in Understanding FICO® Scoring

How high can I score with a small number of tradelines?

Anonymous — Sat, 18 Apr 2015 23:24:49 GMT

Does anyone know any hard evidence of how high a person can (in practice) score with a small number of tradelines?

I have three open credit cards (the oldest is 11 years old, the newest is 7 years old) and an open student loan that is 14 years old -- no other open accounts. All my other factors are great (1 inquiry, perfect payment history, high AAoA, etc.). My FICO is really high right now, but part of why that is the case is that a have a LOT of closed accounts: three old car loans, an old mortgage, two other student loans, three closed credit cards). In other words, I have many accounts of many types all showing that they were handled well.

In the next five years or so, all of these old closed accounts will drop off (as they exceed ten years since closure) and I will be left with a thinner/leaner credit profile: the three credit cards and the student loan. Obviously my AAoA and age of oldest account will be great then, but does anyone have any hard evidence for how high one can score with essentially a few credit cards and an installment loan? I'd prefer not to open extra accounts that I don't really need or want, just for the purpose of keeping FICO's credit mix and depth factors in top scoring condition.

Re: How high can I score with a small number of tradelines?

CH-7-Mission-Accomplished — Sat, 18 Apr 2015 23:53:58 GMT

FICO doesn't count closed loans in credit mix. They do help with AAofA until they fall off at the 10 year mark. Their payment history doen't matter unless there are lates.

You can have 800 scores with just three cards. I would be concerned though because with so few cards, should you want to ever add another card or should one of your lenders close your card for some reason, one card will now be 33% of your AAofA. That would be a huge hit if you ever needed or wanted to open a new account.

I would add a few more cards slowly. Maybe one a year for 3 years And just get something like Nordstrom or Macy's or something that you can put a charge on at Christmas and ignore for the next year.

That's what I would do.

But three cards is plenty for scoring.

Re: How high can I score with a small number of tradelines?

vanillabean — Sun, 19 Apr 2015 03:07:37 GMT

A card count of three is best; it goes downhill from there in FICO world. When I applied for #2 and #3, my score actually went up!

Re: How high can I score with a small number of tradelines?

Anonymous — Sun, 19 Apr 2015 17:15:44 GMT

Thanks for your thoughts, guys. But I am actually looking for, as I say, "hard evidence" -- as in people who have a small number of tradelines but have managed to achieve true FICO scores above (say) "810". (Or some other high number.) My current FICOs are in the 830s and I am trying to gauge how far they could conceivably go down when my rich history of past accounts (including a mortgage and many others) drop off. The only way I can see to do that is to find case histories of people who have really scored very high with few accounts.

Re: How high can I score with a small number of tradelines?

CH-7-Mission-Accomplished — Sun, 19 Apr 2015 17:22:09 GMT

My elderly parents have two credit cards and their FICO score is over 800. AAofA is 25 years. Always paid in full except for the current charges of maybe $100.

There aren't case studies to give you definitive answers, at least not on these credit bulletin boards.

Re: How high can I score with a small number of tradelines?

Anonymous — Sun, 19 Apr 2015 21:27:08 GMT

Anecdotal evidence of the sort you just gave is fine by me -- because it is rooted in a definite case (two specific people, your parents). So thanks! If there is any way you can find out more information, that would be immensely helpful. Two things in particular would help.

(1) You mention that they have FICOs of over 800. Any way you can pin that down a bit more? If for example, their FICOs are hovering around 805, then that suggest that the practical maximum with only a few credit cards is 805. (It's hard to imagine what else they could do to improve their score, given an AAoA of 25 years!)

(2) Are those FICO scores using an old model? For example, mortgage pre-approval FICOs often still use FICO 04. The FICO 04 for Equifax has a top range of 818 -- even if you have a perfect score. So if they are getting 805 (say) on FICO 04 (Equifax) that's different from from getting an 805 using FICO 8 or FICO 9 (which has a true maximum of 850).

Again, thanks for your help thus far. Best wishes...

Re: How high can I score with a small number of tradelines?

CH-7-Mission-Accomplished — Sun, 19 Apr 2015 21:44:02 GMT

Just use the FICO estimator. With 2 to 4 credit cards and every other answer perfect it says the best you can get is 775 to 825.

So 825 is the highest you can get. I'm sure this is FICO 08 since 04 only goes to 818.

This is using 25 years as the oldest account.

http://www.myfico.com/ficocreditscoreestimator/estimator.aspx

The FICO score for my parents was a TU FICO 08. All I know is it was over 800. They cosigned a loan for me and the loan officer told me. My scores were also FICO 08 on the loan app. I did not qualify on my own so needed a cosigner.

Re: How high can I score with a small number of tradelines?

Anonymous — Sun, 19 Apr 2015 21:59:20 GMT

Thanks!

Re: How high can I score with a small number of tradelines?

thom02099 — Sun, 19 Apr 2015 22:07:54 GMT

@Anonymous-own-fico wrote:
A card count of three is best; it goes downhill from there in FICO world. When I applied for #2 and #3, my score actually went up!

Hmmm....guess those of us with more than 3 cards and scores in the 800s are anomalies. :-/

Re: How high can I score with a small number of tradelines?

Anonymous — Sun, 19 Apr 2015 23:07:14 GMT

Interesting subject, I am acutally one of those people that dont want alot of credit cards but afraid i need them to raise my score.

Re: How high can I score with a small number of tradelines?

MarineVietVet — Sun, 19 Apr 2015 23:10:21 GMT

@Anonymous wrote:
Interesting subject, I am acutally one of those people that dont want alot of credit cards but afraid i need them to raise my score.

With proper management you can have very high scores with just two revolving accounts and no installment loans.

I have six open CC's and that's really too many.

Re: How high can I score with a small number of tradelines?

Anonymous — Sun, 19 Apr 2015 23:53:52 GMT

MarineVietVet -- the thing I am curious to discover is how to quantify "very high" (as in "With proper management you can have very high scores with just two revolving accounts and no installment loans").

The FICO Score Estimator was suggested earlier as the way to figure it out, which I initially thought would be the right way to go. But I put in my own information and the estimator was sharply off (755-805) with my scores being in the 830s now.

So I am curious to see if anyone can volunteer case histories (e.g. "two open credit cards, no other tradelines open or closed, AAoA at 15 years, oldest at 18 years, and a FICO of 825).

Re: How high can I score with a small number of tradelines?

MarineVietVet — Mon, 20 Apr 2015 00:03:14 GMT

@Anonymous wrote:
MarineVietVet -- the thing I am curious to discover is how to quantify "very high" (as in "With proper management you can have very high scores with just two revolving accounts and no installment loans").

The FICO Score Estimator was suggested earlier as the way to figure it out, which I initially thought would be the right way to go. But I put in my own information and the estimator was sharply off (755-805) with my scores being in the 830s now.

So I am curious to see if anyone can volunteer case histories (e.g. "two open credit cards, no other tradelines open or closed, AAoA at 15 years, oldest at 18 years, and a FICO of 825).

I've been a member since 2009 and have read many stories of members who have no mortgages or car loans and only a few CC's and have scores higher than 800.

It can be done.

As for simulators/estimators I never use one because none of them can duplicate the FICO scoring formulas. If it was possible to reverse engineer those formulas someone would have done so by now.

While it is helpful to achieve higher scores a bit faster with a mix of credit it's not absolutely necessary. At least in my opinion.

Re: How high can I score with a small number of tradelines?

Imhotrodcrazy — Mon, 20 Apr 2015 00:46:03 GMT

I don't know how much my info will help you but I will throw it into the mix. I only had 3 cc's and an open mortgage and hit 800 last year. I do have an old paid off mortgage which is 23 yrs old now, and it is scheduled to drop off this December. I am wondering how much that will affect my score too. I have not had a car payment in over 30 yrs either, so that is out of my mix. In addition, I opened two cc accounts in the last 10 months, hoping they will help me down the line when I loose that 23 yrs of aaoa. In fact, I got a 2 point increase in my EX score for the inquiry on my Cap one app last week, which surprised me. So, nobody knows what will happen til it happens. Believe me, I gave up on trying to figure out scoring.

Re: How high can I score with a small number of tradelines?

vanillabean — Mon, 20 Apr 2015 00:59:16 GMT

@thom02099 wrote:
@Anonymous-own-fico wrote:
A card count of three is best; it goes downhill from there in FICO world. When I applied for #2 and #3, my score actually went up!

Hmmm....guess those of us with more than 3 cards and scores in the 800s are anomalies. :-/

I was referring to the short-term hit.

Re: How high can I score with a small number of tradelines?

NRB525 — Mon, 20 Apr 2015 02:54:29 GMT

@Anonymous wrote:
Does anyone know any hard evidence of how high a person can (in practice) score with a small number of tradelines?

I have three open credit cards (the oldest is 11 years old, the newest is 7 years old) and an open student loan that is 14 years old -- no other open accounts. All my other factors are great (1 inquiry, perfect payment history, high AAoA, etc.). My FICO is really high right now, but part of why that is the case is that a have a LOT of closed accounts: three old car loans, an old mortgage, two other student loans, three closed credit cards). In other words, I have many accounts of many types all showing that they were handled well.

In the next five years or so, all of these old closed accounts will drop off (as they exceed ten years since closure) and I will be left with a thinner/leaner credit profile: the three credit cards and the student loan. Obviously my AAoA and age of oldest account will be great then, but does anyone have any hard evidence for how high one can score with essentially a few credit cards and an installment loan? I'd prefer not to open extra accounts that I don't really need or want, just for the purpose of keeping FICO's credit mix and depth factors in top scoring condition.

OP, your quest is a noble one, but it is, in the end, circular

In order to achieve a perfect 850, one must have a very long history of well managed accounts, and essentially stop borrowing. Because with any borrowing, there is risk, and risk brings FICO scores down.

If your scores are 830, you are probably in that special place where you have these good historical records (as noted some of the older ones may only be "not negative") and some accounts that you are probably using lightly.

If, in the future, you decide you are going to borrow, your scores are going to go down. Probably not significantly, and you will still get the best borrowing rates, but you won't be able to get 850 if you insist on taking out a loan (that's a joke).

As another noted, you probably want to selectively look at adding a CC which you will keep for the long term. I would advise going to your local CU and opening up a PLOC, just to have it on hand, borrow a small amount, pay it back gradually, draw it again, pay it gradually, just to keep your credit rolling forward. The PLOC I have has no fees, other than the APR, and then you also have the funds available should you need them.

And, as I've told others, if your scores are above 800, go have a nice meal with your significant other and relax, you've made it

Re: How high can I score with a small number of tradelines?

Anonymous — Mon, 20 Apr 2015 04:12:21 GMT

NRB525,

Thanks for your thoughts. I'm a bit puzzled though. It's possible that you misunderstood would I was asking. Basically, it's this: most of my tradelines will fall off in a few years from now. I am trying to make a guess as to how much my score could go down when that happens. From 830 to.... _____? (E.g. 815? 800? 790?) That's equivalent to asking "how high can someone score with a small number of tradelines?"

You call this a "noble quest" and also "circular." You also talk at some length about why I am not likely to be able to score 850. All of this seems off the mark of what I am asking. It's possible that you were thinking that I was trying to INCREASE my credit score from 830 to some higher number, and to do so after my closed tradelines dropped off. That is not the case. I expect that my 830 score will go down after they drop off, but I am trying to get a handle on whether that will be a tiny dive (to 825 say) or one a bit more pronounced (800).

Re: How high can I score with a small number of tradelines?

jamie123 — Mon, 20 Apr 2015 11:29:23 GMT

I think you are missing our point.

You need to plan for the future a bit.

By having only 3 CCs, yes, your scores can top out at about 825 to 830 but you would have a VERY fragile credit portfolio. If you were ever to get another auto loan or other credit, and who knows what the future holds, your scores have a good chance of dropping quite a bit. Like say to 760 maybe.

You are in a perfect position to prevent that now by picking up a few good cards now while your scores are high and you have a thick file.

You should get 1 credit card per year until you have 6 credit cards at least. Credit cards are the foundation to good credit scores and history. Look at your own history! The only thing that is going to stay with you for life is your credit cards!

Re: How high can I score with a small number of tradelines?

CH-7-Mission-Accomplished — Mon, 20 Apr 2015 13:07:30 GMT

@jamie123 wrote:
I think you are missing our point.

You need to plan for the future a bit.

By having only 3 CCs, yes, your scores can top out at about 825 to 830 but you would have a VERY fragile credit portfolio. If you were ever to get another auto loan or other credit, and who knows what the future holds, your scores have a good chance of dropping quite a bit. Like say to 760 maybe.

You are in a perfect position to prevent that now by picking up a few good cards now while your scores are high and you have a thick file.

You should get 1 credit card per year until you have 6 credit cards at least. Credit cards are the foundation to good credit scores and history. Look at your own history! The only thing that is going to stay with you for life is your credit cards!

This is asolutely true. I realize OP'd question is rather an absolute one and it sounds like OP has pretty much a science/evidenced-based mind. Perhaps OP works in higher education (finance) or the science fields.

His/Her question was absolute question: How high can my scores get with this number of cards. We have done our best to hone in on that number. Of course none of us has dragged out the concept of score cards, which are another animal altogether, and which make it so that no two people are likely to score the same with the same general credit card portfolio.

Aside from the purely academic of question of "will my scores stay between 830 and 850 with 2 credit cards and an installment loan," the practical question should be "will I get the same most favorable rates with a score under 850-ish?"

There is no proven benefit of any improvement in rates/terms for a score above 760. FICO "high achievers" are those with a score of 780 and above. This is purely a psychological boost. It has no impact on getting credit and getting the best scores. It's just nice to say I'm in the club.

Any scores between 760 and 850 are excellent in anyone's book. The reason to try to get them up in the 800 to 850 range is so that if you have an unplaned event that you can't pay for with cash, you can get new loan terms and still be able to get the very best rates and terms. You will still be above 760.

The woman with a perfect 850 wil get the same terms as the guy with a 760-- and probably even the gal with the 740 -- and maybe even the guy with a 720.

The high scores above 760 give you some padding so you can still be seen as "perfect" with lenders and still be able to make the occasional credit transaction. 90 Points is a pretty broad spectrum in which to be "perfect" (760 - 850).

90 points are MUCH more important when you are talking between 630 and 720, or 530 and 620, or 670 and 760 or even 520 and 610.

Scores from 760 to 850 demonstrate that credit-wise you are rich. It's just how rich are you?

Re: How high can I score with a small number of tradelines?

Anonymous — Mon, 20 Apr 2015 22:06:19 GMT

Thanks to everyone who is chiming in. I do appreciate everyone's thoughts, including and especially people who take time to write a longer post.

Since it sounds like I am not likely to get anything further along the line of what I originally was asking (how high can one score with a small number of tradelines), I'll give some closing thoughts/issues on the thoughts that Jamie123 and CH-7-Rebuilding have raised.

CH-7-Rebuilding suggests that I have a science/evidence based mind. I do. So there really a couple different questions, and my main interest was in the first. The first question was: purely as an empirical question, how high can a person score with a small number of tradelines? This was a question of fact. Then there were other questions that could be considered, that typically involved implying that one shouldn't care about that first question. E.g... "But you shouldn't try to only have three credit cards, you should try to add more (for reason X or Y)..." or "But it doesn't matter whether your score is 760 or 800 or 840, so since you have a good score you shouldn't care about how high you can score with a few credit cards..."

This other class of questions are are questions of value. They involve what a person should be doing or should be caring about. They involve Should -- and my initial question was just focusing on fact. My style of thinking is to first make sure I understand what is factually the case, and then I can begin thinking about what I might want to do or not do after that. CH-7-Rebuilding was right to perceive that as a thinking style -- no reason everyone needs to think the same way, but that's how I in fact think.

There are two interesting issues that Jamie123 and CH-7-Rebuilding have raised. So I will tackle those and give them my thoughts.

(1) Will opening a new line of credit cause my credit score to drop in a big way? Jamie123 thinks it will. He suggests that I should expect a drop from 830 to 760 -- assuming I do this five years from now, when I have only four accounts. I am curious to hear more why he is convined that the drop would be so pronounced. The only reason I can think of is that he (correctly) sees that the hit on my AAoA would be larger than if I had many accounts. But let's do the math on it. Based on the original post, you can see that I probably have an AAoA right now of 10 years (if you ignored the closed accounts for a second). That means that in 5 years I would have an AAoA of 15 years. If I then added a new CC or loan, that would drop my AAoA to 12 years (the next month) and then my AAoA would continue to go up every year after that. My understanding is that an AAoA of 12 years (with a total age of almost 20 years) is GREAT. And note that this would be an age profile that is BETTER than what I have now (with an 830).

(2) Will a FICO of 760 look just as good to future lenders as a score of 850? CH-7-Rebuilding is certain that it will. In fact, he thinks that it's quite possible that a 720 will be just as good. I suspect that he's basing this on the pre-meltdown era and before, where it was indeed common for there to be a comparitively low bar. What I just can't have the same level of confidence in is that future lenders will all view it the same way. One reason is that a number of things have been happening that may be causing current and future FICO scores to be on average higher. For example some things that used to punish people (FICO-wise) are being mitigated or removed, either by alteration to the model or to the credit bureaus' data&colon; bad records due to medical events and natural disasters, for example. Obviously that's great news if you were a victim of illness or disaster, but if you weren't, then that puts more people up into the 760 780 or even 800 range, and thus lowers your percentile ranking. Again, it's entirely possible that for the next 20 years all mortgage underwriters will consider a FICO of 760 (or 720) no different than an 850, but to be sure of that (as CH-7 apparently is) is something I can't be. But of course CH-7 and I agree in principle that it's virtually certain that there always will be some cutoff where all stratospheric FICO scores are functionally identical. I just think there's a chance it could be higher than 760 at some point -- maybe even as high as 790 or 800 (though of course I don't know).

Again, thanks to all contributors to the thread. Best wishes...