High Credit Usage Question

[SouthJamaica]

---

@Anonymous wrote:

I am getting ready to finish graduate school and trying to get my financial house of cards in order.

I have several credit cards in my name that range from 2-5 years in age, and they are all current with zero balances.

I am also an authorized user on three of my parents' accounts which are all over 10 years in age, yet while they are current, they are all practically maxed out--usage is over 80%.

Due to those accounts, my overall credit usage is currently at 83%.

Would it be better for me to be removed as an authorized user so that I just have my three accounts on my credit?

Thank you in advance for your advice.

---

Yes it would be better to get removed from your parents' cards.

When you do, make sure that even though you are paying off your cards in full, a small balance does report on one account before you pay it off.

I disagree with the advice you have been given by one contributor to get more cards. If you're happy with 3 cards, stay with 3 cards. You don't need any more than that for perfect scores.  Less is more.

[Anonymous]

I agree that if you are happy with 3 cards, stay with 3 cards. I respectfully question that you don't need any more than 3 cards for "perfect" scores.

First, I think it may depend on algorithm. Getting an 850 on Version 8 is not equivalent to getting perfect scores on the much harder mortgage trifecta.

The mortgage trifecta has lower thresholds for number of accounts/revolvers with with a balance. I'm not saying you have to reach the lowest thresholds to achieve a perfect mortgage scores, but it would surely be a BIG help. BTW, it is impossible to reach the lowest thresholds with only 3 cards: You can't get lower than 33% of revolvers with a balance.

@Anonymous How many points was that bottom threshold (15%) on EX2 worth on your profile?

Plus, by having a sufficient number of accounts, you can be assigned to a thick scorecard rather than a thin scorecard.

For readers who don't know, there is a BIG difference in how thin and thick scorecards react to the same event. Thin cards magnify EVERYTHING. They have to. There is less data to extrapolate from, so what choice do they have?

Less data = less accurate predictive ability, comparatively. So to compensate and account for the lessened data and predictive ability, the penalties are much higher. (This could probably be explained better, but hopefully you understand what I mean, tho my articulation may be lacking.)

For example, IIRC, @Anonymous suffered a 17 point loss for a single HP due to being in a thin/unaged/no new account scorecard. I know many thick profiles who suffer big 1, 3, or 4 point penalties for HPs, LOL.

So, while it may be possible to achieve perfect scores with 3 cards, one would have to admit that IF it is possible, it will be MUCH harder to do so on a thin profile with 3 cards.

By instead having several cards (not a bunch), it is much easier to achieve perfect scores all the way around. Thick scorecard makes it easier, more cards lets you hit lower thresholds, etc...

For S&G, I started a thread to see if we can find DPs on if anyone has in fact reached "perfect" scores with 3 cards. Will be interesting I think. Let's see if its possible and if so, how hard:

https://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Top-scores-with-3-revolvers/m-p/5926424#M165996

[Anonymous]

@SouthJamaica is the voice of reason.

@Birdman7: I understand what you're saying, but 'perfect scores' to me means whatever gets me the lowest interest rates possible on a new car or house. I recently found out from my credit union that with 20% down, that '760' trifecta isn't even necessary for them to give me the lowest rate - the score needs to be close, but many other things can make up for it. I'll hit it anyway over the next couple years, but as with everything else, it all depends on someone's particular circumstances. Not all banks are going to be like that.

I don't mean this as criticism, or anything like it, but you seem to think of the end goal as achieving a profile like @Thomas_Thumb or @BrutalBodyShots. There's nothing wrong with anyone trying to achieve that!

[Anonymous]

Not really, I don't need an 850, but I take perfect to mean perfect when we are speaking of credit scoring.

How many people say I have a perfect 760? If someone says a perfect score, its normally understood to mean just that, as high as it goes.

But I do agree, 760 will get you most of what you need. But as a recent thread discussed, all 760s are not created equal.

[Anonymous]

Update: My score in the last few months has increased from the high-500s to the mid-700s.

Thanks to all for the great advice.

[AllZero]

---

@Anonymous wrote:

Update: My score in the last few months has increased from the high-500s to the mid-700s.

Thanks to all for the great advice.

---

Congratulations on your success!

[Anonymous]

Congratulations!