How many is good?

[Anonymous]

So according to the FICO website, they say never apply for credit if you don't need it. At the same time, it says most FICO high achievers have around 4 credit cards. I only have 1. The CL is $11,000 and I owe about $3,500 on it which will be paid in full in the next two months. Every purchase I make, goes on my credit card from gas to anything. I also plan on maybe asking to raise my CL to $15,000 shortly after paying my card off. Is there a point for me in applying for another credit card? Why have 4 when you can have 1 if you pay it off or keep the util down like most do?

[RobertEG]

nmbr, I see your basic logic, but havng only one CC revolving TL is a crap shoot. 

First, if you ever, ever, go just one 30 late, you will get an immense int rate jackup.

Then you are bound to only their card.

Second, I do not know your overall credit  history, but you usually need a FICO mix to ensure that your credit history in the future will continue.  If your current CC has a low age since opening, then opening a new card will improve both your CL, and bulld a more secure ageing history down the line. 

I would never build my financial or FICO plan upon only a single CC.....  IMHO

[Anonymous]

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@RobertEG wrote:

nmbr, I see your basic logic, but havng only one CC revolving TL is a crap shoot.

First, if you ever, ever, go just one 30 late, you will get an immense int rate jackup.

Then you are bound to only their card.

Second, I do not know your overall credit history, but you usually need a FICO mix to ensure that your credit history in the future will continue. If your current CC has a low age since opening, then opening a new card will improve both your CL, and bulld a more secure ageing history down the line.

I would never build my financial or FICO plan upon only a single CC..... IMHO

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My current credit score as of May 13th is 718. And according to the SW program where you can simulate your score, when I get my card paid off in the next two months, it assumes my new score will be between 768-808. I don't see it going to 800, but a nice 760 would be good. I have 5 accounts on my credit report, 2 of which are opened. This CC and my auto loan. I have had 3 other cards, 2 store cards and a AMEX card, all of which are closed. I closed my AMEX like an hour after being approved. Didn't even get it in the mail. I have never missed or been late on one payment on any type of loan or CC and I check my account daily so I don't see myself messing it up. Do you think if I received another card, my score would improve?

Message Edited by Nmbr1ballr on 05-24-2008 09:59 PM

[Anonymous]

You might get a 20 point jump if your util goes to between 1-9%.

IF you want to improve your score in the long run and not incur financial penalties there are a few things you can do going forward:

1) Gain another CC (prime bank or CU - your choice) (To help with # balances reporting)

2) Gain a store card that you will use and PIF (To help with balanced reporting and to maximize your mix category)

3) Request a credit line increase after a few months with your current bank (To help with util)

With your score you should be able to obtain a prime rewards card. Financially, unless your current card is the best one on the market, you will gain a benefit from getting a new card, IF and only IF you pay in full (PIF) every month. If you do that then there is no reason not to get a new card. In time a history of timely payment will give you another TL building up your history and age categories. Also, while your closed accounts are aging now - you might take a hit when they come off your credit report (depending on how this effects your average age)

That said, if your goal is to buy a house in the next 6 months to a year I wouldn't apply for all this new credit. If your goal is simply to maximize your future financial picture then I would go the route above.

[Anonymous]

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@Anonymous wrote:

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@RobertEG wrote:

nmbr, I see your basic logic, but havng only one CC revolving TL is a crap shoot.

First, if you ever, ever, go just one 30 late, you will get an immense int rate jackup.

Then you are bound to only their card.

Second, I do not know your overall credit history, but you usually need a FICO mix to ensure that your credit history in the future will continue. If your current CC has a low age since opening, then opening a new card will improve both your CL, and bulld a more secure ageing history down the line.

I would never build my financial or FICO plan upon only a single CC..... IMHO

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My current credit score as of May 13th is 718. And according to the SW program where you can simulate your score, when I get my card paid off in the next two months, it assumes my new score will be between 768-808. I don't see it going to 800, but a nice 760 would be good. I have 5 accounts on my credit report, 2 of which are opened. This CC and my auto loan. I have had 3 other cards, 2 store cards and a AMEX card, all of which are closed. I closed my AMEX like an hour after being approved. Didn't even get it in the mail. I have never missed or been late on one payment on any type of loan or CC and I check my account daily so I don't see myself messing it up. Do you think if I received another card, my score would improve?

Message Edited by Nmbr1ballr on 05-24-2008 09:59 PM

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If the Amex was opened in 2007 or earlier, consider applying for their card. They backdate your accts to the year you originally "joined" them, so your card will have a minimum of 1 year of history. Also, you may want to consider 1 more Visa/MC and store card.

Keep in mind that FICO wants to see half or less of your open accts with balances so if your only accts are the loan and the CC, and your CC reports a balance, that will hurt your score. You would need to have a minimum of 4 open accts, in order to safely have 1 CC report a balance along with your loan.

For this and various other reasons, I consider the absolute minimum number of bank cards for one to have to be 3 and I would add a store (non-Visa/MC) card to that for mix of credit.

Message Edited by ChaoticKinesis on 05-26-2008 01:40 AM

[MattH]

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@RobertEG wrote:

nmbr, I see your basic logic, but havng only one CC revolving TL is a crap shoot.

First, if you ever, ever, go just one 30 late, you will get an immense int rate jackup.

Then you are bound to only their card.

Second, I do not know your overall credit history, but you usually need a FICO mix to ensure that your credit history in the future will continue. If your current CC has a low age since opening, then opening a new card will improve both your CL, and bulld a more secure ageing history down the line.

I would never build my financial or FICO plan upon only a single CC..... IMHO

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Another advantage of having several cards: a couple of times over the years I've left a card behind at some store and when I realized it was missing called the CC company to report it as lost, which of course meant I was without that particular card for a few days while its replacement was in the mail.