How can I add more accounts?

[wiivile]

All 3 of my scores are about 780. One of the frequent suggestions I get on credit review sites is that I don't have enough accounts, or "mix" of accounts. The only accounts I have on my profile are 5 credit cards (3 active, 2 closed), and 1 student loan (closed for 5 years). They suggest I get an auto loan, home loan, etc. However, I live in NYC and I don't drive, and I can't afford to buy an expensive NYC apartment to get a mortgage. So what other types of credit (besides credit cards) can I get? I don't really need to take out a loan for anything (KNOCK ON WOOD)....

The other thing I get suggestions on is to improve my AAoA, which is about 3 years, but the only thing I can do about that is just ... get older, since I'm only 28 (and obviously not close my old card accounts).

[Bankrupt2019]

If you don't "need" a loan. See if your local credit union does a "credit builder loan."  Take out the smallest amount you can with the longest term. This will improve your account mix and cost you minimal money. However at a 780 score I personally wouldn't be too concerned with improving the score

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@wiivile wrote:

All 3 of my scores are about 780. One of the frequent suggestions I get on credit review sites is that I don't have enough accounts, or "mix" of accounts. The only accounts I have on my profile are 5 credit cards (3 active, 2 closed), and 1 student loan (closed for 5 years). They suggest I get an auto loan, home loan, etc. However, I live in NYC and I don't drive, and I can't afford to buy an expensive NYC apartment to get a mortgage. So what other types of credit (besides credit cards) can I get? I don't really need to take out a loan for anything (KNOCK ON WOOD)....

The other thing I get suggestions on is to improve my AAoA, which is about 3 years, but the only thing I can do about that is just ... get older, since I'm only 28 (and obviously not close my old card accounts).

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[newhis]

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@Bankrupt2019 wrote:

If you don't "need" a loan. See if your local credit union does a "credit builder loan."  Take out the smallest amount you can with the longest term. This will improve your account mix and cost you minimal money. However at a 780 score I personally wouldn't be too concerned with improving the score

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+1 A secured loan is something you can get to improve your 'mix'. I didn't know better and got a 12 months secured loan, just ended and my score dropped 19 points, maybe you can get one for 36 months or longer.

To improve your AAoA, you can ask family with old card (with low util and perfect payment) to add you as an AU (no Amex). You need that the card is older than your current AAoA to help you. Good luck.

[NRB525]

I recently went to my local CU and told the representative I wanted a $500 Share Secured Term Loan for 5 years. He said he knew why I wanted the loan, and wished he could get more people to try it. No HP, they took $500 to put in a CD for security, opened the loan for a 5 year auto payment of just over $9 per month, and deposited the $500 proceeds back in my account.

I paid it down to $450 to start at 90% utilization, and virtually no change in score. Over time, as this is paid down, it should help my scores, but I'm in no rush to see that. Others say to pay down the loan to some tiny amount, so that's an option too.

In a few years, if I don't have another term loan going, I may open another to start laddering the expirations so there's always some term loan going.

[Anonymous]

NRB's suggestion of a $500 Share Secure loan with a five year term -- and then paying off most of the principal in the first few months -- is perfect.  (The paying off principal part will help your score significantly because FICO looks at the total percentage of your open loans that you have paid off.  FICO really likes it when that % is lower rather than in the 95-99% range.  Paying off most of the principal early will lower the amount of interest you pay too.)

As you can imagine, his idea will work best when the lender allows you to keep the loan open for the full five years even though you have paid off the principal early.  There are a number of lenders that are very friendly to this approach, e.g. Alliant, etc.

Note, however, that this Share Secure Trick helps you most when you are a person who has no open installment loans.  If someone already has an open car or student loan (or mortgage, etc.), then he isn't really accomplishing much since his installment % will still be mostly governed by the already existing open loan.

A final thought:

In your case you really will benefit from adding a few more accounts over time.  (A nice goal might be two more cards eventually -- ones you can keep open forever with no annual fees -- plus adding the occasional Share Secure loan any time you have no open installment loans.)

But bear in mind that many credit monitoring sites greatly exaggerate the need for more accounts.  They are biased toward misrepresenting the truth in this area because they hope you will use their site as a portal for finding these extra cards and loans that they claim you need.  

[gdale6]

I would not be taking out installment loans just for Fico score purposes. If you want a few more credit cards for rewards or whatever then that would be fine but if you are happy with what you have now and have no need for any loans then just let it all be you have a great score and the 3 cards you need at minimum.

[takeshi74]

You don't need to add an account just for the sake of adding an account.  Keep in mind that Mix is ~10%.  Also keep in mind th eother factors.  Adding a new account will impact your AAoA, New Credit. etc.

http://www.myfico.com/crediteducation/whatsinyourscore.aspx

If your FICO 8's are ~780 then you're already above the 740-760 range where best terms are generally offered. 

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@wiivile wrote:

and obviously not close my old card accounts

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Read the Closing Credit Cards thread linked in the Helpful Threads sticky in the Credit Cards subforum.  AAoA is not immediately impacted by account closure.  You don't have to keep every account open.  Some choose to do this.  I don't keep anything open that is of no use to me and my FICO 8's are above 800.  One does not need to hoard credit to get higher scores.

[Gunnar419]

I agree that with a 780 score you have no need for any loans to improve your FICO "mix."If you want to go for a loan just to build credit, the loan type described above is fine, but remember that whenever your installment loan is paid off, your score is going to drop, sometimes substantially (people frequently report plunges in the 25-30 point range when their ONLY installment loan is paid off).

FWIW, I have only credit cards (no mortgage, no installment loans) and my scores are all in the low 800s. All the talk about the "mix" is about either marketing financial products or is fine tuning for credit purists.

[Anonymous]

Note to our OP (Wiivile):

Some people have credit score goals that involve raising their scores to very high levels, e.g. all the way up to the 840s. There's a number of reasons people choose to do that.  One reason is just pleasure.  It's fun (for some people).  Another reason is that it gives some people a greater sense of security.  It lets them know that even if something totally unexpected were to happen in their life, they'd have room to lose a huge amount of FICO points and still have very high scores.  Neither of these reasons is silly (and there are others still).

You may be a person who (a) wants to see his score continue to climb much higher than 780 and (b) you don't want to wait several years for that to happen.  If that's the case, that's fine.  There's a lot of people who share that desire.  If so, the $500 Share Secure Loan is simply an objectively good idea for you.  It's cheap, easy, and given your desires and specific situation appropriate.  I note that your situation involves living in New York City, which may be alien to some folks here, but you are absolutely right that buying a car or owning a house is not part of that world.  Thus the bottom line is that you will never  have an installment loan as long as you live in NYC, which might be for many years.  The SS loan "trick" is designed to remedy that.  The "credit builder loan" idea mentioned by our friend 633AR is basically the same.

Of course, it would be also totally legitimate for a person in your shoes to say: My scores are 780 and that is good enough for me, so I will just have a few cards and have good credit habits and allow my scores to slowly climb (though I may never get ultrahigh).  That perspective is fine, and so is is someone who wants their score to get higher and at a faster rate.  Neither perspective is the Only Correct One.

What is certain is that if you were to add an SS loan in the exact method as described by NRB (full five years, pay off most of it early) you would get a significant scoring benefit and there's simply no downside to it, given that your profile currently has such a small number of accounts right now.  One possibility is this: try it, see if you like it.  It may turn out to be really easy and it makes you happy.  In which case, you can add an SS loan once every 5-6 years, for as long as you live in NYC.  Should you ever move to a place where a car or a home makes sense, it'll be nice to have had a couple well paid installment loans on your profile.