topic Family Doesn't Understand My Relationship With Credit in General Credit Topics

Family Doesn't Understand My Relationship With Credit

Anonymous — Fri, 27 Jul 2018 05:18:44 GMT

I currently have 7 credit cards, and live at home. My mom keeps telling me "I am going to wreck my credit for having so many cards" and "it is irrepsonsible to have more than a couple credit cards". I keep trying to explain that havings lots of cards is a good thing if you are responsible but she and no-one else seem to get it. Are we in a bubble on this forum, or are most people just not very credit savy?

Re: Family Doesn't Understand My Relationship With Credit

gdale6 — Fri, 27 Jul 2018 05:26:26 GMT

A semi bubble maybe but reality is most have no idea about Fico scores or how they actually work or how much the system is tilted against them.

Re: Family Doesn't Understand My Relationship With Credit

Anonymous — Fri, 27 Jul 2018 05:31:35 GMT

@gdale6 wrote:
A semi bubble maybe but reality is most have no idea about Fico scores or how they actually work or how much the system is tilted against them.

1 mil % agreed!!!

Re: Family Doesn't Understand My Relationship With Credit

Anonymous — Fri, 27 Jul 2018 05:51:32 GMT

@gdale6 wrote:
A semi bubble maybe but reality is most have no idea about Fico scores or how they actually work or how much the system is tilted against them.

Well said! +∞

Re: Family Doesn't Understand My Relationship With Credit

wasCB14 — Fri, 27 Jul 2018 06:46:30 GMT

@Anonymous wrote:
I currently have 7 credit cards, and live at home. My mom keeps telling me "I am going to wreck my credit for having so many cards" and "it is irrepsonsible to have more than a couple credit cards". I keep trying to explain that havings lots of cards is a good thing if you are responsible but she and no-one else seem to get it. Are we in a bubble on this forum, or are most people just not very credit savy?

I'm not an expert on FICO scoring, but is the value of a 5th, 6th, 7th revolving account significant if utilization is low?

I've not had family worried I would wreck my credit, but I have had family wonder how I keep track of it all.

Re: Family Doesn't Understand My Relationship With Credit

Anonymous — Fri, 27 Jul 2018 08:34:01 GMT

@wasCB14 wrote:
@Anonymous wrote:
I currently have 7 credit cards, and live at home. My mom keeps telling me "I am going to wreck my credit for having so many cards" and "it is irrepsonsible to have more than a couple credit cards". I keep trying to explain that havings lots of cards is a good thing if you are responsible but she and no-one else seem to get it. Are we in a bubble on this forum, or are most people just not very credit savy?
I'm not an expert on FICO scoring, but is the value of a 5th, 6th, 7th revolving account significant if utilization is low?

I've not had family worried I would wreck my credit, but I have had family wonder how I keep track of it all.

I have wondered this myself, actually. IMHO, if you need that many cards just to pad utilization, you are increasing your chances of running up balances and not being able to pay them. Not everyone does this for utilization-padding, of course, but I know a lot of us do, including me. Nevertheless, if you can handle it, no worries. Just my 2 cents.

Re: Family Doesn't Understand My Relationship With Credit

Gmood1 — Fri, 27 Jul 2018 08:02:01 GMT

Yup..its a bubble.😉
And no matter what, some people won't understand why others use CCs.

You're only over extending yourself if you're using more than you can pay.

I still find value in #40 CC.😂
That's whether FICO scoring finds it of value or not.

Re: Family Doesn't Understand My Relationship With Credit

Jnbmom — Fri, 27 Jul 2018 08:20:15 GMT

I have alot more cards than I ever planned to have , however I am keeping my utilization at around 5% which is pretty good with about 100K in credit lines, but I know how quickly you can get into trouble with that amount sitting there.

I know eventually I am gonna probably get rid of some cards and slim down my portfolio while still maintaining low utlization. I won't lie I like the "cushion" of lines in case I get AA from some creditors, although I am not doing anything to bring that on ( although dormant accounts may trigger). Of course 5% utilzation is just that no matter if I have 50K or 100K, and I need to keep it that way.

Re: Family Doesn't Understand My Relationship With Credit

Anonymous — Fri, 27 Jul 2018 08:29:55 GMT

@Gmood1 wrote:
Yup..its a bubble.😉
And no matter what, some people won't understand why others use CCs.

You're only over extending yourself if you're using more than you can pay.

I still find value in #40 CC.😂
That's whether FICO scoring finds it of value or not.

You are abosolutely right, Gmood. That statement was meant for people who just open cards just for padding utilization. If you actually use them and find value in them, you are just fine.

Re: Family Doesn't Understand My Relationship With Credit

Anonymous — Fri, 27 Jul 2018 08:30:43 GMT

@Jnbmom wrote:
I have alot more cards than I ever planned to have , however I am keeping my utilization at around 5% which is pretty good with about 100K in credit lines, but I know how quickly you can get into trouble with that amount sitting there.

I know eventually I am gonna probably get rid of some cards and slim down my portfolio while still maintaining low utlization. I won't lie I like the "cushion" of lines in case I get AA from some creditors, although I am not doing anything to bring that on ( although dormant accounts may trigger). Of course 5% utilzation is just that no matter if I have 50K or 100K, and I need to keep it that way.

Same. That's the point of my 2nd reply to the 2nd poster.

Re: Family Doesn't Understand My Relationship With Credit

Anonymous — Fri, 27 Jul 2018 09:23:26 GMT

I was in the majority until I started educating myself on these forums. I knew the system was biased for the lenders, but I was thrilled to learn of all the ways that we can still make things work for us. It’s a tribute to those who have put in the time trying theories and risking lots of HPs to figure out the patterns and how to work the system, with techniques such as AZEO coming to light. Hats off and beers up to you 👍

I knew of some of the benefits such as miles and purchase protection, but it never dawned on me to charge something and then pay it off with the cash I would’ve used to buy it in order to increase rewards, for example. I’ve been doing that with my small CapOne QS lately but it’ll be a lot more effective once my Discover IT with a better line arrives today or tomorrow. Looking forward to that cash back match!

Re: Family Doesn't Understand My Relationship With Credit

me12345 — Fri, 27 Jul 2018 16:52:39 GMT

@wasCB14 wrote:
@Anonymous wrote:
I currently have 7 credit cards, and live at home. My mom keeps telling me "I am going to wreck my credit for having so many cards" and "it is irrepsonsible to have more than a couple credit cards". I keep trying to explain that havings lots of cards is a good thing if you are responsible but she and no-one else seem to get it. Are we in a bubble on this forum, or are most people just not very credit savy?
I'm not an expert on FICO scoring, but is the value of a 5th, 6th, 7th revolving account significant if utilization is low?

I've not had family worried I would wreck my credit, but I have had family wonder how I keep track of it all.

Same here... I use a spreadsheet

Re: Family Doesn't Understand My Relationship With Credit

Physh1 — Fri, 27 Jul 2018 19:25:07 GMT

I've got quite a few friends who are scared of credit or assume what 'too many' cards can do to you. I've showeed a few friends my scores & they're amazed...most have helped me help them start rebuilding responsibly. Credit has an overwhelmingly negative social stigma for those who have no understanding of credit basics.

Re: Family Doesn't Understand My Relationship With Credit

Anonymous — Fri, 27 Jul 2018 21:05:49 GMT

@wasCB14 wrote:
@Anonymous wrote:
I currently have 7 credit cards, and live at home. My mom keeps telling me "I am going to wreck my credit for having so many cards" and "it is irrepsonsible to have more than a couple credit cards". I keep trying to explain that havings lots of cards is a good thing if you are responsible but she and no-one else seem to get it. Are we in a bubble on this forum, or are most people just not very credit savy?
I'm not an expert on FICO scoring, but is the value of a 5th, 6th, 7th revolving account significant if utilization is low?

I've not had family worried I would wreck my credit, but I have had family wonder how I keep track of it all.

There's a scoring advantage in being able to have (when you need it) one card showing a positive balance with many open accounts showing a $0 balance. The easiest way to have accounts with a zero balance that you can keep open for decades is credit cards. By "many" we don't mean dozens. Five total is fine in that sense. (Three may be enough.) And the phrase "when you need it" is important. Implementing AZEO (All Zero Except One) doesn't help you build credit over time -- it's just a nice trick to implement in the 40 days before an important credit app (like a car loan, mortgage, etc.).

There may be an advantage to more than five in making your profile thicker (which just means more accounts). A long term goal for anyone should be to eventually acquire seven open accounts and ten accounts total (open and closed together). A person with exactly four accounts (3 cards and one loan) would take a small hit compared with someone with ten because his profile was too "thin." And fewer than four accounts becomes more of a problem. (4 is better than 3 is better than 2 is better than only 1. A profile with only 1-2 accounts would be a significant scoring problem.)

More accounts in a profile also enables you to add more new accounts without it dinging your score -- less AAoA impact and a smaller percentage of your accounts being "new."

Re: Family Doesn't Understand My Relationship With Credit

AndySoCal — Sat, 28 Jul 2018 01:56:11 GMT

The number of cards in and of itself does not impact the FICO score. The credit history of each or your credit acounts and how long you have had them is a different story. Also the credit limits in and of themselves has no impact on your score but your credit utilization does impact the FICO score. Credit limits to the extent that they impact your credit utilization is a part of the FICO score. I would suggest you stop apping for new credit for a while (at least a year). Remember apply only for the credit you need and not want.

Re: Family Doesn't Understand My Relationship With Credit

Thomas_Thumb — Sun, 29 Jul 2018 00:18:31 GMT

@AndySoCal wrote:
The number of cards in and of itself does not impact the FICO score. The credit history of each or your credit acounts and how long you have had them is a different story. Also the credit limits in and of themselves has no impact on your score but your credit utilization does impact the FICO score. Credit limits to the extent that they impact your credit utilization is a part of the FICO score. I would suggest you stop apping for new credit for a while (at least a year). Remember apply only for the credit you need and not want.

Actually # of cards can impact score. Score potential is held back if the profile has to few revolving accounts and/or there are too few accounts with recent payment information.

Re: Family Doesn't Understand My Relationship With Credit

mitchblue — Sun, 29 Jul 2018 09:18:39 GMT

As long as you understand using CC on basic everyday purchases.. bills, groceries, car payments - or if you need a toaster. Use them like a debit card. Don't buy a computer that's more than the budget you have planned just becuase you have a CC, and PIF.

Re: Family Doesn't Understand My Relationship With Credit

AndySoCal — Mon, 30 Jul 2018 02:00:57 GMT

@thomas_thumb

If you are referring to score reason 03 please read the what you can do for this reason. I get the same reason but for installment accounts because I do not have any.