TRUE CREDIT - Varies from Fico?

[MM1234]

I got this from MY TC report. This is not general info so I didnt know if this is only pertains to me or my reports. It kinda goes against some areas I thought were differnt but maybe its true and others can use it too.

TC ADVISE: # There are too many personal finance accounts on your credit report. [Experian] Having too much available credit can sometimes harm your credit score. Lenders may feel that you have the ability to spend more than you could potentially pay back. You might want to consider closing a few accounts or asking to have your credit limits reduced. Avoid closing too many accounts - especially the oldest accounts on your credit report - because it could harm your credit score. Closing the oldest accounts can damage your score by making the length of your credit use appear shorter.

MY THINKING: I thought having large Credit Limits is a good thing and shows you've earned it with the CCard companies. And I thought closing Accounts is a bad thing. Now Im confused. I just requested an Increase from AMEX to bump up my overall avail credit just to have it....not to use it....and I got it. Was that bad? Yikes!!

TC ADVISE: # There are not enough bank installment accounts on your credit report. [Experian] A healthy balance of credit and loan accounts is key to achieving a high credit score. It is important to build a record of responsible credit use over time with different types of accounts. Consider opening a new account to strengthen your credit report and improve your score.

MY THINKING: I thought having many loans or Debt was bad. And opening NEW accounts can lower your score. Im sure they dont mean take out tons of loans or debt but its looking like having LOW or NO debt is bad based on the TC process.

Anyway - just some info I found interesting.

Message Edited by MM1234 on 05-23-2007 08:31 AM

[MidnightVoice]

They really, really seem to like a mixture of accounts.  CC, gas cards, Store cards, auto loans, mortgages etc.  It gives them a warm glow when they see that 

I guess they feel that loans are budget monthly payments, whereas credit cards can be more easily abused.

[Anonymous]

Take the TC recommendation with a grain of salt. That's just a canned assessment. You can make much better judgment calls about what you need to do to raise your score by reviewing your files and using the info here, IMO.

Message Edited by devhip on 05-23-2007 08:37 AM

[MidnightVoice]

But closing some newer credit cards will lengthen your credit history 

Message Edited by MidnightVoice on 05-23-2007 10:38 AM

[Anonymous]

Having a couple of credit cards with a high limit and low utilizations is good for your credit.   Having from 10 to 20 credit cards with high limits is bad and is considered too much potential debt.   If you have 15 cc with $10000 or more credit limits,  future lenders look at that as potentially a $150,000 + debt and then they wonder how would you plan on paying that back.    Too much credit can be harmful.   

Some earlier posted how a mortgage lender told him/her they had too much credit and required them to close a couple of these account.   

[MM1234]

Good deal. All these are great. man.... I learn more and more everyday.

That makes sense about if you have $150K in avail credit. Good point! I def Im gonna stay put where I am. I have 3 cards I plan to keep. BofA, AMEX BLUE and CitiCard. All have high limits and i think are prime cards.

I have a few others that are non-Prime and can close those if a Mortgage company asks me to which I didnt know can happen.

[MidnightVoice]

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MM1234 wrote:

I have a few others that are non-Prime and can close those if a Mortgage company asks me to which I didnt know can happen.

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Remember, it is preferable to close newer cards

[Anonymous]

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@MM1234 wrote:
TC ADVISE: # There are too many personal finance accounts on your credit report. [Experian] Having too much available credit can sometimes harm your credit score.

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Just wondering, what is your average age of open accounts?

[Anonymous]

I think the "too many accounts" and "too much available credit" warnings are almost ready to be added to the Myth List. My wife and I have more than the average number of accounts and plenty of available credit and neither fact has ever been mentioned during the process of buying a house, refinancing, and then buying a new house. There are a number of people who have posted in this and other forums who have 20+ open revolving accounts and high FICO scores. There was a poster elsewhere who had more than 300K in available credit and a FICO of 800.

My experience has always been that lenders are far more concerned with your actual debt-to-income ratio. If you have a history of being responsible and a lender still seems excessively worried about what bizarre moves you might make in the future, you might want to consider speaking to a different lender ...

[MidnightVoice]

I wonder if it is a high number of cards when associated with a short credit history, and/or a large percentage of the cards being relatively new?

Just a thought