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What's the advantage of having many CC?

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Frequent Contributor

Re: What's the advantage of having many CC?

I have a lot of store cards (4) Most of them as my first few cards with limits lower then 1000. Should I use them and try to keep them from closing from inactivity or let them close from inactivity?


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Message 31 of 38
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Senior Contributor

Re: What's the advantage of having many CC?


@haulingthescoreup wrote:

 



It's rough, but it's pretty much true.

 

When you calculate your AAoA, you divide the total number of months of all your accounts by the number of accounts. If the number of accounts is small (i.e., few CC's), the result is going to swing a lot more by adding a card than if the number of accounts is large. So for instance:

 

3 accounts, AAoA of one year (or 12 months), add a card: (3x12) / 4 accounts = 9 months, down from 12 months <-- 25% drop in AAoA

 

10 accounts, AAoA 12 months, add a card: (10x12) / 11 accounts = 10.9 months, down from 12 months <-- ~9.2% drop in AAoA


Not rough, exact.

 

Message 32 of 38
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Senior Contributor

Re: What's the advantage of having many CC?


@Meltdownblitz wrote:
I have a lot of store cards (4) Most of them as my first few cards with limits lower then 1000. Should I use them and try to keep them from closing from inactivity or let them close from inactivity?

From a FICO score (AAoA) point of view, it is advantageous to keep them open.  

Message 33 of 38
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Moderator Emerita

Re: What's the advantage of having many CC?

The good thing about store cards is that they generally only need to be used once or twice a year to remain open, unlike bank cards.

* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
Message 34 of 38
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Moderator Emerita

Re: What's the advantage of having many CC?

 


@Wolf3 wrote:

@haulingthescoreup wrote:

 



It's rough, but it's pretty much true.

 

When you calculate your AAoA, you divide the total number of months of all your accounts by the number of accounts. If the number of accounts is small (i.e., few CC's), the result is going to swing a lot more by adding a card than if the number of accounts is large. So for instance:

 

3 accounts, AAoA of one year (or 12 months), add a card: (3x12) / 4 accounts = 9 months, down from 12 months <-- 25% drop in AAoA

 

10 accounts, AAoA 12 months, add a card: (10x12) / 11 accounts = 10.9 months, down from 12 months <-- ~9.2% drop in AAoA


Not rough, exact.

 


Well, OK. Smiley Very Happy

* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
Message 35 of 38
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Valued Member

Re: What's the advantage of having many CC?

what is AA0oA?

Message 36 of 38
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Moderator Emeritus

Re: What's the advantage of having many CC?


@Marvelousone wrote:

what is AA0oA?



AAoA = Average Age of Accounts.

 

Here is a list of Abbreviations.

 

 

 

From a BK years ago to:
EX - 3/11 pulled by lender- 835, EQ - 2/11-816, TU - 2/11-782

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".


Message 37 of 38
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Valued Member

Re: What's the advantage of having many CC?

Concerning Bank cards.  

 

I have a couple I do not use very often, but I definitely do not want them to be closed.  How often is often enough in terms of use to keep them as open trade lines?

 

I am assuming Credit Union issued cards do not need as much use.

 

...Ranger out

Message 38 of 38
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