Ok so i'm contemplating a new CC for 2008. I'm just wondering, what should be in the credit card mix.
does it make any difference to my scores if i have one each of Visa, MC, Discover, and Amex or are all CCs equal in the credit mix?
i have 2 CC and 1 store card. If i add another store card will my scores take a dive? what if i had 3CC and 2 store cards? how would the score be then?
just trying to get a hang of this whole mixology thing. any help is greatly appreciated
does it make any difference to my scores if i have one each of Visa, MC, Discover, and Amex or are all CCs equal in the credit mix?
i have 2 CC and 1 store card. If i add another store card will my scores take a dive? what if i had 3CC and 2 store cards? how would the score be then?
just trying to get a hang of this whole mixology thing. any help is greatly appreciated
@dizzier wrote:
Ok so i'm contemplating a new CC for 2008. I'm just wondering, what should be in the credit card mix.
does it make any difference to my scores if i have one each of Visa, MC, Discover, and Amex or are all CCs equal in the credit mix?
i have 2 CC and 1 store card. If i add another store card will my scores take a dive? what if i had 3CC and 2 store cards? how would the score be then?
just trying to get a hang of this whole mixology thing. any help is greatly appreciated
Majors/ bank cards (Visa, MC, Discover, AmEx) --any combination is fine: 4 Visas, one of each, 2 MC's and an AmEx, whatever. Majors get you more points than store cards. If the card has both a store and bank name, it's a bank card (Sears MC = MC.)
Store cards: still can't get perfectly clear info on these, but my understanding is that they don't hurt your scores, but they don't help as much as the majors do. I think that unless there is a specific store card that gives you great perks at a store that you actually use a lot, they might be more trouble than they're worth (high APR's, wacky reporting.) If you get one, I would find out which bank manages it and check out their reputation for customer service.
Your scores are helped when only half of all your accounts have balances--this includes mortgages, student loans, etc. So add up your open non-mortgage accounts (which have balances by definition, or they're getting ready to close), your current open CC's, and add however many more you might be getting. You want to have a high enough total number of open accounts that your number of your accounts with balances will be half or fewer.
OK, that's an awful sentence. Think of it this way:
mortgage: has balance
car loan: has balance
student loan: has balance
CC #1: has balance
CC #2: $0 bal
CC #3: $0 bal
You have 4 out of 6 accounts with balances. If you add two more CC's, and you let only one card report a balance at any one time, you will have 4 out of 8 accounts with balances. I did this in November, and my scores took a great hop.
Along with increasing your CL's and therefore decreasing util, this to me is a good reason to add cards. But you have to remember about the half or fewer reporting thing.
Edit: this score jump probably reflects the score bucket I'm in. YMMV.
Message Edited by haulingthescoreup on 12-09-2007 08:54 AM
@ccaddict wrote:Wow that's interesting! I had never heard of that before.. Thanks.
@haulingthescoreup wrote:
Your scores are helped when only half of all your accounts have balances--this includes mortgages, student loans, etc.
It was new to me, too. I once had the comment on a TU score, but I didn't really pay that much attention to it. Then when my bucket got changed, I got mad and decided to PIF everything but the tiniest amount on one card. Util wound up being less than 1/100 of 1% last month!
Sure seemed to have results, and got the happy comments.
@haulingthescoreup wrote:
@ccaddict wrote:Wow that's interesting! I had never heard of that before.. Thanks.
@haulingthescoreup wrote:
Your scores are helped when only half of all your accounts have balances--this includes mortgages, student loans, etc.
It was new to me, too. I once had the comment on a TU score, but I didn't really pay that much attention to it. Then when my bucket got changed, I got mad and decided to PIF everything but the tiniest amount on one card. Util wound up being less than 1/100 of 1% last month!
i'm not sure how accurate this is, but what i do know is that FICO high achievers have an average of 3 accounts carrying a balance.