Current situation: where to go from here

[jdxprs1]

I started rebuilding in December with fico 8 scores in the 590's. My goal was to be able to refi my current 30 year 5.375 mortgage before rates got too high.

I had 1 credit card, 1 mortgage, and 2 auto loans when I started. I have quite a few baddies on my reports but most are all settled with zero balance now. I'm currently going to underwriting for the mortgage refinance and that should be complete in about 45 days.

Once the refi is complete, I'd like advice on what to do credit card wise. I opened a lot of accounts to get my scores up. Fico middle mortgage score for the refi is 671. Current fico 8 scores range from 675 to 690. Utilization is zero. Income 150k+

Hers my cards and limits.

Local credit union visa 1750
Walmart synchrony 3200
PayPal extras MasterCard 500
Merrick bank 550 (goes to 1100 in about 2 months)
Cerulean visa 750 (has $10 a month annual fee)
Credit one 500
Amex ed 1000
Amex bce 1000
Pnc cash builder 5,000

I want to keep the Walmart and PayPal accounts for sure because I put my daughter as AU's on them to build her credit.

I'm also signing up for navy fed cu after my refi is complete.

My goal after the refi is to move to less cards with higher limits. What's the best number of cards to have for fico scores?

Any suggestions/advice is appreciated.

[Anonymous]

To maximize FICO scores with utilization, you want 3 credit cards.  It's OK to have more than 3, but having more provides absolutely no scoring benefit over having just 3.

When you say you "opened lots of accounts (cards) to get your scores up" what do you mean?  Opening up a lot of credit cards doesn't increase scores, so I'm confused as to what your thought process was on this.

If I were you I'd close down the crappy cards or store cards that you rarely use.  If you aren't using it more than once a month, it's probably not worth having.  Credit One is a predatory lender, so I'd definitely get rid of that.  Those low limit cards aren't worth having unless you use them a lot.  I don't know anything about your spend pattern, but having both an Amex BCE and ED probably isn't necessary.  You could move the limit from the one you use less to the one you use more and close out one of them, then 3X CLI that $2k to $6k when your time comes.

Certainly your focus right now is your mortgage, but I'd be thinking more about closing down cards than opening them if I had your profile.  Just my opinion.

[AverageJoesCredit]

Some say 3 cards are good enough to maximize your Fico. You have Amex which is great as they can really grow. Navy and prrhaps Penfed will be great additions and with your income, should hook you up nicely. I would only try to add those two and get rid of Credit Oneand the Cerelean Visa, you are past those with your Amex approvals. Merrick eventually. If you like. Best of luck on the refi and your credit journey

[jdxprs1]

Opening those cards helped raise my scores. I only had 1 card, the credit union, before December, so I was getting lots of lack of revolving account history denials. The credit union card is 13 years old.

[Anonymous]

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@jdxprs1 wrote:
Opening those cards helped raise my scores. I only had 1 card, the credit union, before December, so I was getting lots of lack of revolving account history denials. The credit union card is 13 years old.

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You went fron 1 card to 9 cards.  All you need is 3 for maximum FICO scoring benefit, so opening the other 6 didn't do anything to "raise your scores" as 3 would have been more than adequate to establish ample revolving account history.  I'm just making sure you don't have the wrongful assumption that opening more revolving credit lines (above what is needed for maximum FICO scoring) is going to raise your score.  There are people on this forum that think the more revolvers they open, the more their score will improve because they have more accounts, more green "OK" boxes on their credit report, etc.  Just making sure you don't go down the wrong path here, that's all.

[jdxprs1]

Sounds good. That was part of the reason for this post.

[Anonymous]

I'd get a Navy credit card when you finish that process as they tend to give out a higher SL. I'd add your daughter as an au on that card and your Amex and take her off PayPal and Walmart as Synchrony tends to close accounts for no good reason and you don't want to pass that on to your daughter. Finally I'd close some of the cards you have after all is said and done especially store cards.

[jdxprs1]

Already have her on one Amex and she has her own Pnc.

[jdxprs1]

Anymore opinions to add to good advice so far?

[Anonymous]

I'd second BrutalBodyShots's advice to get limit increases on whichever American Express card you use most. If you were getting score increases for opening new cards, that probably happened because you were increasing your total credit availability, which lowers your utilization percentage. Ideally, you want to be using only 10% or less of your overall credit capacity to maximize your credit score. With smaller limits like you have with most of your cards, that can be difficult, but once you get some limit increases it gets easier. Since you have one 5k limit now, I'd wait a year before getting any more cards so your inquiries time out. Then if you want another card, there's a decent chance they'll match your highest limit.