Re: Is 5 active credit lines to have a thick file ... - myFICO® Forums

Anonymous · ‎09-15-2021

I have a single Mortgage and 3 CCs that are all newish. I'm rated as a "thin" file according to Experian based credit reporting services because of only 4 active accounts. My average account age is 7 months, so if adding another credit card will help should not effect other age scoring much. I haven't found anything else saying <5 is a thin file though.

I paid off 20yr and 21yr old mortgages, a car loan, and long term CC was closed for non use recently. So I opened 3 credit card accounts the day my Mortgage closed knowing my credit score would take hits either way. FICO 8 is around 725, bankcard score is 796 after the dust settled. Appears I was penalized about 15 points from the oldest CC closing (dropping me under 5 active accounts, but also effecting age of active accounts, or any matrix that considers longest active account).

HeavenOhio · ‎09-15-2021

I have six open cards and three closed ones. A couple of my scores (Equifax, I think) give reason codes saying that I have too few accounts in good standing. Given that all of my accounts are in good standing, I think we have to translate this code to mean too few accounts.

Don't go out of your way for this. You don't want to be denied by a bank that's sensitive to new accounts, and you don't need clutter caused by cards that aren't a fit for you. But definitely go ahead and apply if a product is attractive to you and your current accounts have aged sufficiently.

Keep in mind that the biggest age-related scoring hit occurs when one's youngest revolver is less than a year old. But that's probably not a big deal in your case. You don't mention baddies, meaning that I'm sure your score is fine. You should be fine for approvals as long as your timing is good.

It's hard to advise on timing for a new card application without knowing the ages of your current cards. With three "newish" cards, I'd suggest waiting for all of them to be at least a year old before applying for anything new. If you'd like to list your cards (including the one that's closed) along with their banks, limits, and ages (or dates opened), we can give you more nuanced advice and possibly give you the go-ahead if you'd like to open something a bit sooner.

Anonymous · ‎09-15-2021

I started building credit in October 2020, basically from nothing. Everything I had from years ago, both good and bad, had dropped off. Between then and January 2021, I got a Self credit builder loan and a credit card secured by that, two other secured cards, and two secured loans, so six active credit lines total. By mid-April my FICO 8 scores were in the low 700s and the MyFICO 3B reports described my Credit Mix as "Very Good".

I have no idea where the threshold is for a "thin file", but I've since gotten a new auto loan, and didn't have any difficulty with that, although it's 4.99% APR. I've submitted various credit card applications recently, with two approved, one conditionally approved, and three denied. The denial notices cited my having too short a credit history, and too many inquiries, but didn't say anything about a thin file.

I think having a few secured loans, which are just for around $3000-3500, helped my credit a lot, and I think that would help anyone with a thin file. I think secured loans for smaller amounts would probably work fine.

When I applied with one of my credit unions for preapproval for an auto loan, I was asked the purpose of one of the loans. I said that it was just to build credit. The representative seemed horrified and said that one should NEVER get a loan just to build credit. Based on that, I suppose if I'm ever again asked for the purpose of one of those loans, I'll make up a story about it, e.g., needed to buy new computer equipment, rather than admit that it was just to build credit.

I've also been told by multiple people that when starting out, one should only get one or two new credit lines. That seemed like BS to me, as it would GUARANTEE that one had a thin credit file. I certainly wasn't able to get any unsecured credit at the time, and maybe the advice is correct as far as trying to get more than a few lines of unsecured credit, but AFAICT getting five or six lines of secured credit worked great.

In June, my Discover card graduated, they refunded my $2500 security deposit, and gave me a CLI to $2700. My Capital One hasn't graduated, but they gave me a $100 CLI, so now it is $1100 with $899 security. But the big news for me is that I just got a Costco card (Citi) with a $9800 limit, and an Amazon store card (Synchrony) with $1800. The Discover, Costco/Citi, and Amazon cards are the first non-trivial unsecured credit I've had in just about forever.

The drawback to all of this is that I definitely do have too many inquiries over the last 24 months: 4 Equifax, 9 TransUnion, and 10 Experian. I don't plan to apply for any new credit for at least a year, except maybe to refinance my auto loan.

FireMedic1 · ‎09-15-2021

@Anonymous wrote:
I have a single Mortgage and 3 CCs that are all newish. I'm rated as a "thin" file according to Experian based credit reporting services because of only 4 active accounts. My average account age is 7 months, so if adding another credit card will help should not effect other age scoring much. I haven't found anything else saying <5 is a thin file though.

I paid off 20yr and 21yr old mortgages, a car loan, and long term CC was closed for non use recently. So I opened 3 credit card accounts the day my Mortgage closed knowing my credit score would take hits either way. FICO 8 is around 725, bankcard score is 796 after the dust settled. Appears I was penalized about 15 points from the oldest CC closing (dropping me under 5 active accounts, but also effecting age of active accounts, or any matrix that considers longest active account).

The 15 pts may be from the 3 closed loans. But having one still open is great. It wasnt from the closed card. Or the paid off loans. They still factor into your AAoA's and other things that make up your score. They will still count until they fall off usually on avg around the 10 yr period. Some fall at anytime. Thats not set in stone. In time you'll get more stuff and the thin will be in the past. But try to get up to 1 yr with your AAoA's as @HeavenOhio posted. Two yrs is even better with a score increase.

TWO MORE MONTHS NO BK! (on Eq/Ex)

jamie123 · ‎09-15-2021

Your average account age at 7 months means that you are REALLY new to credit when lenders review your report. You need for your 3 credit cards to age to 1 year and then apply for 2 more credit cards. If you apply now you run the risk of being turned down and if you are approved you will probably get really low starting credit lines.

You are on the right track though. Credit cards are the foundation of rock solid high credit scores that will withstand the test of time. Credit cards are really the only credit accounts that you can keep open for life. The great majority of mortgages get paid off in 5 or 6 years because people move or refinance their mortgages so credit cards are by far the best way to build your scores. Credit cards are free and can actually earn you a bit of cash back if used properly so it is a no brainer to have them.

Three credit cards is the minimum number of cards that you need to have to achieve the highest credit scores. If you have less than three you are leaving points on the table every month. It is good to have a couple more cards than three because things happen that get accounts closed at times and you don't want to run the risk of losing one of you oldest cards say, 10 years from now, without having a backup. Banks get bought out, they close certain cards and before you know it you are forced into getting a new card without the history of your old card.

You are on the right track!

Good luck!

Starting Score: EQ 653 6/21/12
Current Score: EQ 817 3/10/20 - EX 820 3/13/20 - TU 825 3/03/20

folks19 · ‎09-17-2021

@Anonymous wrote:
I have a single Mortgage and 3 CCs that are all newish. I'm rated as a "thin" file according to Experian based credit reporting services because of only 4 active accounts. My average account age is 7 months, so if adding another credit card will help should not effect other age scoring much. I haven't found anything else saying <5 is a thin file though.

I paid off 20yr and 21yr old mortgages, a car loan, and long term CC was closed for non use recently. So I opened 3 credit card accounts the day my Mortgage closed knowing my credit score would take hits either way. FICO 8 is around 725, bankcard score is 796 after the dust settled. Appears I was penalized about 15 points from the oldest CC closing (dropping me under 5 active accounts, but also effecting age of active accounts, or any matrix that considers longest active account).

@Anonymous You should be fine. What you see in the app is a gererazation. It would have been better had you left your old card active, but nothing can be done by this point. I don't think having 5 accounts turns you into "thick", but you may want to consider opening a 5th account since your age is already low, as long as you don't plan on taking out a mortgage or loan in the near future.

Anonymous · ‎09-17-2021

@FireMedic1

15 decline was specific to when the oldest card closed. Durring the bigger transition to old to new mortgages, new cards in general my Fico went from 800 to 740 on average. I'm OK. At least two of my sources for credit score checks (think citi and Experian app) list a problem with 4 active accounts, and specificaly say I need 5 to not be thin. My "Bankcard" version if FICO is still around 800.

FireMedic1 · ‎09-17-2021

@Anonymous wrote:
@FireMedic1
15 decline was specific to when the oldest card closed. Durring the bigger transition to old to new mortgages, new cards in general my Fico went from 800 to 740 on average. I'm OK. At least two of my sources for credit score checks (think citi and Experian app) list a problem with 4 active accounts, and specificaly say I need 5 to not be thin. My "Bankcard" version if FICO is still around 800.

All of the scoring places have some kind of remark about something or anything on our reports. I ignore them. Its the score that matters. No lender goes by fair, excellent, thick, thin, poor, ect. That 800 is awesome. Would more accounts change that from thin to thick? Not really. Even the 740 after the newer mortgage hit is still great. As many have said 760 is just as good as a 800. It's how you handle your cards responsibly. In time more accounts will lead to a thicker file. There are some guys on here with 20,30, and more cards. I got my measly 10 and we have the same score. Make sense?

TWO MORE MONTHS NO BK! (on Eq/Ex)

SoonerSoldier33 · ‎09-17-2021

@Anonymous wrote:
@FireMedic1
15 decline was specific to when the oldest card closed. Durring the bigger transition to old to new mortgages, new cards in general my Fico went from 800 to 740 on average. I'm OK. At least two of my sources for credit score checks (think citi and Experian app) list a problem with 4 active accounts, and specificaly say I need 5 to not be thin. My "Bankcard" version if FICO is still around 800.

There are definitely scoring implications from closing your oldest revolving account, as evidenced by your 15 point loss. Whether it was a direct score loss or because you got assigned to a new scorecard bc the account closed is harder to pinpoint.

I think the thin/thick discussion is referencing 2 different things. You can be on a thick scorecard with 4 tradelines open, and we know you just need 3 revolvers and an installment to achieve max scores. So, 4 accounts to be considered thick, right?

But, then there's the number of accounts pays as agreed. I have 5 revolvers and 1 installment, and I get the 'not enough accounts pays as agreed' on several models. From the primer:

G. Number of Accounts Paid as Agreed

The category needs a certain amount of current payment history to score most accurately. A variety of at least 7 positive accounts, actively reporting paid as agreed, seems sufficient. Since the algorithm is considering length and depth of payment history, the code is more likely for a young/thin file or one lacking Mix diversity.

So, 4 to be thick, but 7 to not get that code? Isn't FICO fun? Lol