What does balancing account mean?

Anonymous · ‎01-09-2018

I have read a few articles about balancing accounts. Saying having 4-6 cards would be good. Can anyone shine light on this subject.

Anonymous · ‎01-09-2018

Are you refering to debit cards or credit cards?

Anonymous · ‎01-09-2018

Dunno. I feel more balanced at 40-60 cards.

Chris.

tcbofade · ‎01-09-2018

@Anonymous wrote:
I have read a few articles about balancing accounts. Saying having 4-6 cards would be good. Can anyone shine light on this subject.

Kind of depends what you're reading about... I'm going to ASSUME that you are reading about credit scores. If I am correct, then "balancing" your accounts refers to having a mix of installment loans, credit cards, auto loans, and / or mortgage accounts listed on your credit report.

There isn't a "perfect" ratio that I'm aware of, but having several types of credit looks better to lenders (and your credit score) than having only one type of credit.

Hope that helps!

04/01/24 Fico 8: EX 763, EQ 799, TU 783.
Fico 9: EX 756 03/13/24, EQ 790 02/04/24, TU No idea.

Zero percent financing is where the devil lives...

Anonymous · ‎01-09-2018

Like the amount of tradelines open. So websites i have come across had said you should open 2 more cards to balance your accouts.

Anonymous · ‎01-09-2018

@tcbofade wrote:
@Anonymous wrote:
I have read a few articles about balancing accounts. Saying having 4-6 cards would be good. Can anyone shine light on this subject.
Kind of depends what you're reading about... I'm going to ASSUME that you are reading about credit scores. If I am correct, then "balancing" your accounts refers to having a mix of installment loans, credit cards, auto loans, and / or mortgage accounts listed on your credit report.

There isn't a "perfect" ratio that I'm aware of, but having several types of credit looks better to lenders (and your credit score) than having only one type of credit.

Hope that helps!

Ok i think that makes more sense. I believe it said "you need to open 2 more cards to balnance your accounts."

Anonymous · ‎01-09-2018

Be aware that many credit websites just talk about Vantage Scores, not FICO scores. Vantage Scores are useless for credit, they're just for entertainment purposes.

When it comes to FICO 8 scoring, you can maximize your score by:

Having 3 revolving credit accounts of any age
Preferably having 5 revolving credit accounts that are all 24 months of age or older
Having at least one installment loan open
Having the remaining balance due on ALL installment loans be less than 8.9% of their original balances (aggregate)
Not have ANY history of a "consumer finance account" type installment loan

Anonymous · ‎01-09-2018

@Anonymous wrote:
Be aware that many credit websites just talk about Vantage Scores, not FICO scores. Vantage Scores are useless for credit, they're just for entertainment purposes.

When it comes to FICO 8 scoring, you can maximize your score by:

Having 3 revolving credit accounts of any age
Preferably having 5 revolving credit accounts that are all 24 months of age or older
Having at least one installment loan open
Having the remaining balance due on ALL installment loans be less than 8.9% of their original balances (aggregate)
Not have ANY history of a "consumer finance account" type installment loan

Thank you for the Info!! But what is "consumer Finace account?

Anonymous · ‎01-09-2018

Subprime predatory installment loan usually from a lender with "Finance" or "Financial" in their name but not always.

Furniture store loans are often these bad loans which actually hurt your FICO score.

Anonymous · ‎01-09-2018

To add 1 more thing to ABCDs 5 points above, implementing the AZEO technique on your revolvers is also highly recommended for scoring maximization.