quick question...plz lend me your ear...

[Anonymous]

I have 9 student loan accounts totaling about 17,000 in debt.  How many credit cards should I have, and how much of a credit limit should I aspire to?  Just a ballpark is fine, thanks!

[Red1Blue]

It all depends what your goals are? What are you trying to accomplish. What is your income? Are you still a student or do you have a regular job? I would not have more than 2-3 cards to start with and grow from there.

[Lel]

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@Anonymous wrote:

I have 9 student loan accounts totaling about 17,000 in debt. How many credit cards should I have, and how much of a credit limit should I aspire to? Just a ballpark is fine, thanks!

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Based on my understanding of FICO scoring, your student loan accounts should not influence your decisions about credit cards. Your student loans are installment accounts, which are a different kind of debt from credit card accounts, which are revolving debt. The balances of your student loans do not factor into the calculation of credit utilization.

Depending on what the interest rates are on your student loans, you might want to consider consolidating them. If there is a wide variation in the interest rates, then you could stand to save a few bucks a month, because a lot of consolidators take the average interest rate across all loans and then give you a discount from the average, and then cut the rate further if you make payments on time for a certain period (e.g. 1 year).

[Anonymous]

No I am definately not just starting out.  I am simply trying to raise my credit score with a good mix of credit.  I have heard that you should have one revolving account for every installment account- but that would mean about 10 credit cards, which seems very excessive.  And I am wondering if I should raise my limits on the other two, although I don't really need a higher limit and have 0% utilization.

[Lel]

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@Anonymous wrote:

No I am definately not just starting out. I am simply trying to raise my credit score with a good mix of credit. I have heard that you should have one revolving account for every installment account- but that would mean about 10 credit cards, which seems very excessive. And I am wondering if I should raise my limits on the other two, although I don't really need a higher limit and have 0% utilization.

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I haven't heard anything about needing a 1:1 ratio of revolving:installment accounts, and I can't imagine recommending such a move. If you were obtain a whole slew of new credit cards, it would re-age your credit history waaaaaay down, which would hurt your score for years to come.

If you were to consolidate those student loans, then you'd be down to one open installment account. The original loans would persist on your record for several more years, but your CR would indicate that these were accounts in good standing (presumably) that were closed and refinanced. Your number of accounts with balances would go down dramatically, which would give your score a little boost as well (at least it did with me when I consolidated 4 loans into 1).

[Anonymous]

I agree that you should maybe look into consolidating those loans, but you should have at least half of your accounts showing no balance.  Meaning if you had one student loan, and two credit cards with a balance on each, you should app for 3 more cards and keep 0 balance on them optimally.  Or pay off one card and app for another.

edit: re-read and saw you have 0% util on those two cards.  So if you don't touch your loans, I guess technically you should try to get 7 or 8 more CCs, but that obviously can't be done short term...  at least not without killing your score for a while.

Message Edited by thrasher865 on 06-05-2008 11:43 AM

[haulingthescoreup]

There really is an issue with having slightly more CC's than installment accounts, because otherwise you have a huge percentage of accounts with balances, which is a known score ding. I used to lose 10 and 20 points all the time when I "only" had 3 installment accounts and 5 revolving. It wore me out trying to make sure that only one CC would ever report a balance, no matter how tiny.

I don't think that this happens with multiple student loans, though. One of my daughters has about 6 SL's on her reports, and she never gets this message, even though she has only 3 or 4 cards. So it looks like maybe SL's are excluded from this, as many people get one or two per semester, and they just breed like rabbits.

OP, since you're in a position to check cards out now, you might want to go with the quality instead of quantity approach. Set yourself a goal of 3 or 4 good cards that you'll be willing to keep for 20 years or more. Even if they start you out with relatively low limits, the good cards will grow with you over time, and length of credit history will do wonders for you.

[Anonymous]

I can't touch the student loan accounts.  For one, 7 of 9 fell 120 days late 11 months ago so are negative.  I am going to pay off the 2 that are still in good standing, then pay a large sum on the others, but NOT pay them off until the negatives age off in 6 years.  Maybe then I can refi.  Any other thoughts?

[haulingthescoreup]

We posted at the same time. I wouldn't worry about balancing out your CC's and loans for now, as I'm not sure that SL's count for this. Just get a few quality cards that you're willing to carry for the next few decades.

[Anonymous]

Thanks for that advice... I think I will follow it.  I will try to get a mastercard and leave it at that, and just watch and see what MyFICO tells me to do... it hasn't steered me wrong yet!  Thanks to everyone.