Too Many Accounts Hurting credit

[life101]

I am 50 yrs old and it says I have too many credit cards. I have one that is for regualar monthly expenses (paid off monthly), one for emergency (use once in awhile to keep active plus don't want to lose those airmile points, one is a business account. (using 4). The rest get sliced and diced in my schredder. My score is hurt - it says, Too many accounts. I read that it is not advised to close the unused accounts. I'm surprised the cc companies do not close them (its been years and years since use). So does this mean that my score will always be hurt. I know that my scores are good and it does not matter but I like the play room in the score and I don't like something I do not use hurting the score. I see a couple I had closed. geeze i don't remember even having a sears card back in 86. Any advise on this problem.

[haulingthescoreup]

Which score report gave you this info? Can you copy/ paste it here, please?

Although I've seen a flag on the Credit-at-a-Glance screen of a FICO score report for "too many accounts", I've never seen it listed as a negative.

But I have seen it listed as a negative on FAKO's.

[chasmith]

Between 3 and 4 bank cards is said to be optimum.  But as long as utilization is below 9% total , and no card exceeds 9%, you should be OK.

[Anonymous]

TU gives a red flag for too many accounts showing a balance (Over 3) and this includes installment accounts. This really sucks for those of us who have student loans and rather not consolidate them.

[ArisGreek]

+1 or you could be like me who has a mortgage, car payment, and a consolidated student loan and 1 card with a balance and 3 with no balance and be considered  too many balances as a negative factor. *le sigh*

[GregB]

I think you are running into a flag based upon a certain percentage of your accounts with a balance. This happens for me around 50% or so. EQ FICO shows 12 with balances out of 23 . The section "Understanding Your FICO Score" lists "You have too many credit cards carrying balances". I still have 25 accounts listed on my TU FICO so that reason is not listed. 9 of the 12 accounts with balances are CC accounts.

[haulingthescoreup]

Still waiting to hear back from OP as to which report included this.

And that's a good point: if it said "too many accounts with balances", that's very different from just too many accounts.

[life101]

A red flag for too many accounts was from the TransUnion report. It says I have alot of accounts but I see 4 with open balances. These balances are not up to date. One is from where I got a 1.99% offer and I had my car payment on it. It has since been paid off (August of 2010) but still shows a high amount. The other is a business card which I use for re-occuring expenses, paid off every month. The other was our personal monthly expenses, minimal balance but the transunion shows when we used above the 50% usage but has since been paid in full and now only charging everday expenses so now down to a minimum.

It seems if I am going for a mortgage that I should not use my cards for the everday expenses even if I do pay off in full every month :-( It made life easier though.

This was also posted.

Ratio of your revolving balances to your credit limits 11%

Anyway,.. even though I do not all the other cards and they have been at a $0.00 balance for years, according to transunion, it is still hurting my score. :-( I guess the way they see it is that because they are there I have the option to go on a spending spree and could get into trouble. Of course, I can't.. the cards get shredded but since it says don't close cards I am a loss of what to do about these.

Thanks

[Anonymous]

You know, if your credit is generally good, fico tries to find a reason to tell you why your score is not 850. I would not worry too much about it.

11% utilization will hurt more than 9%. Just keep using your credit cards and pay some of them off before the statement cuts. This should be an easy way to "polish" your score a bit.

[haulingthescoreup]

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@life101 wrote:

A red flag for too many accounts was from the TransUnion report. It says I have alot of accounts but I see 4 with open balances. These balances are not up to date. One is from where I got a 1.99% offer and I had my car payment on it. It has since been paid off (August of 2010) but still shows a high amount. The other is a business card which I use for re-occuring expenses, paid off every month. The other was our personal monthly expenses, minimal balance but the transunion shows when we used above the 50% usage but has since been paid in full and now only charging everday expenses so now down to a minimum.

It seems if I am going for a mortgage that I should not use my cards for the everday expenses even if I do pay off in full every month :-( It made life easier though.

This was also posted.

Ratio of your revolving balances to your credit limits 11%

Anyway,.. even though I do not all the other cards and they have been at a $0.00 balance for years, according to transunion, it is still hurting my score. :-( I guess the way they see it is that because they are there I have the option to go on a spending spree and could get into trouble. Of course, I can't.. the cards get shredded but since it says don't close cards I am a loss of what to do about these.

Thanks

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Was it just a red flag on the "Credit-at-a-glance" screen? If so, I wouldn't worry about it. Many people get this who have lots of accounts, especially lots of closed accounts. Someone posted the other day that when it first showed up, it seemed to be linked to a 2-point drop in score. And who knows, if that person got the flag because they'd just opened a new account, the point drop could have been for the existence of a new account (net any other pluses or minuses from opening it), and not for hitting 30 total accounts or whatever it is.

I had this pop up for the first time (on TU) several months ago, on the Credit-at-a-Glance screen, and there was no score change at all. I just rolled my eyes and went on.

But if it's listed as a negative on screen 2, that's different (and also very surprising.) The negatives on screen 2 are the factors that are actually causing a lowered score. We do see "too many accounts with balances" as a negative, but I've never seen a negative (as opposed to the red flag) for just plain "too many accounts." In fact, I don't see a reason code on TU for this on the list of FICO reason codes, although #4 for EQ and EX seems close.

When you do go for a mortgage, you can time your payments on the cards that you do use so that only one reports a balance. But there's no particular reason to do this now.