I have done a lot of research on the forums about AZEO. I have yet to find a real reason why three cards is the typical suggested "best score" option. From what I have read, there is only a 5-6 point jump when you add the third card. Is it really necessary? Can I achieve a decent score in two years with only two credit cards and an installment loan reporting?
My goal is an FHA loan after the two year BK waiting period.
Three CC and one installment loan are the combinations the myFICO score theorists here have determined are needed for optimal credit building and FICO score. You can build your FICO score with just one credit account, however, your file will be thin.
The 5-6 point increase can mean the difference in several interest points when purchasing a home which is why it is advised to have three CCs.
AZEO is not used to build credit and is only important if you are attempting to purchase a large ticket item like a home. Applied 2-3 months before starting the mortgage process, it is used to lower utilization which in turn raises FICO scores.
@Anonymous wrote:
The reasoning I’ve seen put forth for a 3 card minimum is that 3 is the lowest number you can use in AZEO to allow less than half of your cards to report a balance. With two cards and using AZEO, half of your cards show a balance.
I hadn't seen that angle. It makes sense. I just don't know If I want to apply for another card. I burned Discover and Citi so my options for more cards are limited. I know store cards are frowned upon, but would it give a bigger boost even if the third card was a store card?
