What is the ideal number of credit cards for optimal thickness?

[Subexistence]

I'm aware that FICO puts you into different buckets based on how many credit cards you have. I only have 2 active credit cards and I plan to wait for one of them to get closed for inactivity. In the future I see myself getting a citi DC for sure then I may get a grocery American Express card, M&T Visa Signature(no annual fee nor foriegn transaction fee Visa Card), and CapitalOne Quicksilver(No annual fee nor foriegn transaction fee Mastercard). If thickness isn't too much of a problem then I may skip out on the latter 2 or 3 so save myself from being bothered to keep them active in the future. I also heard that LexisNexis Auto-enhanced scores punishes you for having too many credit cards so I definitely want to avoid raising my insurance with too many cards. I'm also areally cheap college student so annual fee cards are a no-no.

So what is the optimal number of cards I should get to optimize thickness of my profile?

[Anonymous]

Most feel 3 is sufficient and that letting 1 of the 3 report a small balance monthly is the best bet for most profiles.

You said you are planning on waiting for one of your cards to get closed for activity.  I'm curious why.  If you want it closed, why not just close it yourself?  If you don't want it closed, just use it every 6 months or so to keep it active.  I guess I just didn't understand that part of your post, so hopefully you can clarify.

[Subexistence]

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@Anonymous wrote:

Most feel 3 is sufficient and that letting 1 of the 3 report a small balance monthly is the best bet for most profiles.

You said you are planning on waiting for one of your cards to get closed for activity.  I'm curious why.  If you want it closed, why not just close it yourself?  If you don't want it closed, just use it every 6 months or so to keep it active.  I guess I just didn't understand that part of your post, so hopefully you can clarify.

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I mean if I were to close now or wait like 9 more months for it close itself then the card age would last 10 years AND 9 months vs just 10 years. So if I like age then why would I not keep it alive by making small payments? Well the card is notorious for having a broken system that might 'accidentally' report on time payments as late so just to be on the safe side, I don't make any purchases on it. Also why do the people with cards in their signature have like 20 cards?

[manyquestions]

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@Subexistence wrote:

I'm aware that FICO puts you into different buckets based on how many credit cards you have. I only have 2 active credit cards and I plan to wait for one of them to get closed for inactivity. In the future I see myself getting a citi DC for sure then I may get a grocery American Express card, M&T Visa Signature(no annual fee nor foriegn transaction fee Visa Card), and CapitalOne Quicksilver(No annual fee nor foriegn transaction fee Mastercard). If thickness isn't too much of a problem then I may skip out on the latter 2 or 3 so save myself from being bothered to keep them active in the future. I also heard that LexisNexis Auto-enhanced scores punishes you for having too many credit cards so I definitely want to avoid raising my insurance with too many cards. I'm also areally cheap college student so annual fee cards are a no-no.

So what is the optimal number of cards I should get to optimize thickness of my profile?

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From your post I think what you are asking is what is the minimum number of cards you can have and still be able to have a good FICO score.  I agree with the other poster that three is the minimum number of revolving accounts I would ever suggest to anyone if they care about their FICO score. If you plan to try to see how high you can get your score and don't mind managing more accounts I would advise at least five cards and one installment loan.   I don't think there is any maximum acceptable number of cards.You can have 60 cards and 850 FICO scores.  Everyones comfort level is different.  Do what you are comfortable with.  

[Anonymous]

I've done the research aND u need at least 5 cards to get maximum credit.....more than that doesn't help you, and less will definitely not optimize your score

[Anonymous]

Hi SubE.  When you mention being put into different buckets, most people here use that word as an informal term for the 12 scorecards into which FICO 8 places consumers.  (The other FICO models also have scorecards, though there may not be 12 in each case.)

Assuming your profile is clean, scorecard assignment is not based on number of credit cards.  It is based on three factors:

      (1) Total number of accounts (open and closed)

      (2) Age of youngest account

      (3) Age of oldest account

You were probably thinking of #1 when you said number of credit cards.  But #1 includes all accounts, including for example installment accounts.  It also includes closed accounts.

So I will rephrase your question a bit, so that it aligns a bit more closely to how scorecard assignment actually works.

Right now I have only two accounts total, both of which are credit cards.  I know that makes my profile "thin" -- and I also know that FICO cares about how thick your profile is.  How many more accounts do I need to eventually add if I want to be confident that FICO won't be scoring me as a "thin" profile?

I don't think anyone knows that for sure.  The last time I chatted with Thomas Thumb about this, I think he felt that six accounts total would be safe.  So your idea of gradually adding three more cards is quite reasonable, and if I were you I would also add an SS loan with Alliant (using the paydown technqiue).  That would bring you to six total, and much more importantly, it would have you a nice credit mix and installment utilization, which would be worth an additional 30 points.

The Lexis Nexis Auto Insurance score does indeed have a few reason codes associated with having a very large number of open accounts.  But again that's a huge number.  Having 7-8 open accounts (for example) would be nothing in the big scene of things. 

Finally, you write that having five credit cards would be a real bother to keep active.  It's really not.  You just need to buy something small with them once every six months (there are many possibilities, e.g. adding 50 cents to an Amazon gift card balance, using them at a grocery store, etc.).  And if you add each card strategically, when that issuer is offering a big promotion, the sign up bonus will compensate you many many times over for the small cost of keeping it active (and as long as you are buying something you want/need, it's not a cost at all).

[Thomas_Thumb]

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@Anonymous wrote:
I've done the research aND u need at least 5 cards to get maximum credit.....more than that doesn't help you, and less will definitely not optimize your score

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You can achieve a score of 850 with three open credit cards - if your AAoA and age of oldest account are sufficient. Inverse was at Fico 8 850 with 3 cards but, he also had 2 open Auto loans and 2 open mortgages  - so seven total open accounts. Obviously he had a minimum of 4 accounts showing activity due to the installments loans by themself.

SubE-

Number of accounts considers installment loans and charge cards. As mentioned above, file thickness includes closed accounts. However, the scoring factor "too few accounts with recent payment information" is only influenced by open accounts.

A mix of 4 personal credit cards, one charge card, one AU card and one installment loan has worked well for me. The AU card counts for me on the older Fico 98 and Fico 04 scoring models but is not considered (for me) on Fico 08 and likely Fico 09.

[Anonymous]

You can achieve 850 with 2 credit catds as well with an installment loan.

But having 5 cards will get you there faster and optimize your score faster than 3. I've done the research so, I'm just spreading the info....

[Anonymous]

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@Thomas_Thumb wrote:

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A mix of 4 personal credit cards, one charge card, one AU card and one installment loan has worked well for me. The AU card counts for me on the older Fico 98 and Fico 04 scoring models but is not considered (for me) on Fico 08 and likely Fico 09.

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TT, is there any benefit to having a charge card in your wallet from a FICO scoring perspective?  Does it in any way add to "credit mix" or help achieve a better score, or are they simply viewed just like credit cards?  I've never had a charge card which is why I'm asking.  If it was something that would help my score, I would probably scoop one up and use it on occasion to show usage.

[Anonymous]

Hi BBS.  There was a debate about that last year.  I'll be curious to hear what TT says.  Two things worth remembering regardless:

(1)  If having a charge card (in addition to a few credit cards) does help the credit mix category, it is likely not nearly the same impact as having getting one's first installment loan. 

(2)  It is very hard to obtain a charge card that has no annual fee.

If a charge card were known to give significant help, and there was one with no AF, I would be interested in getting one too.  As I say, curious to hear whether TT knows of any.