DoI REALLY need another CC?

[capricornchanges]

All I had were installment accounts on my files, I recently got a cap 1 and it reported yesterday and gave me a 30+ point increase (yay), I used Experians simulator and with another CC my score doesnt change, but I keep reading 3 is ideal for point increase, can anyone tell me which is correct?

[DollyLama]

I think the reason for having min. 3-5 is revolving credit history. Your installment loans are good, but once paid, it's a countdown till they age off your bureaus. Having revolving credit , yes just that 1 new card yielded a score boost for having a credit mix of both revolving and installment. But revolving credit unlike installments, can be used every month, every 3 months, etc. and basically never close, thus it will in the long run be the Oldest Age of your Accounts once those loans disappear. Just always keep low utilization on the card(s) when they report to bureaus when the statement cuts, not the due date. Also Discover statement gives me FICO score for Transunion. My Capital One is a Vantage Score from TU CreditWise, not FICO score, but I do like cash back everyday!

Be selective if your credit scores are good, I like Discover for cash back, albeit it is select categories every couple of months. But sure helped when I needed all new appliances, they were on sale, but huge purchase and extra 5% cashback sold me. 

Others will choose for reasons of travel rewards, etc. You hope for your credit lines to eventually get increases with responsible credit usage. Ideally no annual fee cards, and one that caters to your needs.

[Anonymous]

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@capricornchangeswrote:

All I had were installment accounts on my files, I recently got a cap 1 and it reported yesterday and gave me a 30+ point increase (yay), I used Experians simulator and with another CC my score doesnt change, but I keep reading 3 is ideal for point increase, can anyone tell me which is correct?

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This is true, you need a minimum of 3 cards for maximum FICO scoring because banks like to see that you can manage a variety of debts. But you do not have to chase the maximum FICO score. As long as you pay those bills on time you will still have a good score. Take your time with the new Cap1 and when you are ready to add another card to your wallet, think about which card will be right for your spend.

[Shooting-For-800]

Ideally, you want a little of each catagory.

3-5 major credit cards (visa, mc, disc, amex)

1 mortgage

1 car loan

maybe 1-2 store credit cards

students loans do not seem to hurt much either even though you would think they would

[Anonymous]

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@Shooting-For-800wrote:

Ideally, you want a little of each catagory.

3-5 major credit cards (visa, mc, disc, amex)

1 mortgage

1 car loan

maybe 1-2 store credit cards

students loans do not seem to hurt much either even though you would think they would

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Hi Shooting!  Just an FYI, store cards never help one's FICO score (by improving credit mix) and they actively hurt your score in some other widely used models, such as the LexisNexis model used by the insurance industry.

As far as an auto loan or a mortgage goes, there might be an advantage.  (E.g. there probably is some advantage in the Auto flavor of the FICO models to having an auto loan.)  But the scoring advantage would still be very slim, assuming the person has an open loan of some kind already on his profile.

A fair thing to say IMO is that a person should never take out an auto loan or a mortgage even partly to chase some hypothetical scoring advantage.  Those two kinds of loans are just way too huge.  Any large purchase (or supporting financing decision) should be driven purely by financial benefit with zero attention to how it could help your score.  If a person has no loans he should certainly consider improving his credit mix, but that can be done using the Share Secured Loan Technique (typically a $500 loan on which you pay $1-2 of interest a year).

[SouthJamaica]

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@capricornchangeswrote:

All I had were installment accounts on my files, I recently got a cap 1 and it reported yesterday and gave me a 30+ point increase (yay), I used Experians simulator and with another CC my score doesnt change, but I keep reading 3 is ideal for point increase, can anyone tell me which is correct?

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No you don't need another credit card.

[jamie123]

Yes, you need a minimum of 3 credit cards in order to achieve the highest scores and don't let anyone tell you otherwise.

FICO has 2 scoring factors that you can only win with a minimum of 3 credit cards and they are:

• You get nicked points if all cards report a $0 balance
• You get nicked points if 50% or more of your cards report a balance

By only having 1 or 2 cards you cannot win points in the 2 above mentioned scoring factors. You are leaving points on the table every month. Besides, credit cards are the foundation to a rock solid credit score because they are the only credit accounts that you can keep open for life. Most people with 30 year mortgages end up never paying them to completion because they move in 5 or 6 years. It is very important to have 3 to 5 quality credit cards to build a rock solid credit score that will be achieved as long as you pay them on time and let them age. Ten years from now you will be glad that you added a few more credit cards to your portfolio today.

[Anonymous]

You're asking multiple questions.

If your question is,

"Will minimum 3-5 CCs help me get a FICO8 score boost?" the answer is yes.

If your question is,

"Do I NEED another CC?" the answer is not necessarily. It is really up to you, your money management style, your current FICO scores and how much they matter to you right now.

That said, it is better to let your cards age together rather than playing catch-up later, if you DO want to have more than one card. But again, there is no law saying you must maximize your FICO score at all time. Of course, you ARE on the MyFico forums, which would suggest you probably do want to at least improve it some :-)

[capricornchanges]

Yes capabk, I guess that is what I’m asking, do I need 3 for maximum Fico boost? I’m trying to boost and let them age. My confusion comes from Experians simulator that says adding a second card will give no point boost. Thanks in advance!

[Miner]

I currently have 2 CCs and 1 auto loan.  My fico 3B reports here keep telling me I have too few accounts in good standing (shows I have 3).  Also says high achievers have at least 6.  Every closed account shows paid and I have never missed a payment on my opened accouts.  Clearly I need more accounts.  Somewhere, I remember seeing on something that I should add 1 more account on  my TU. But can't find it now.

I will be looking to add 1 CC this spring after my Discover unsecures to improve my scores a little.  Will check what I am pre-approved for, otherwise will try for an Amazon Visa.  Not interested in sub-prime cards that I'll want to close later so I'm being patient.  After that, I'm waiting for all my serious negatives to fall off at the end of the year.