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You can safely ignore any advice given to you by someone suggesting you need 10-15 credit cards for anything.
There are a lot of factors in your score and number of accounts is part of it (a small one) but that also includes other loan history (student, auto, personal). Closed accounts also continue to stay in history.
A bigger factor is utilization of your limits. Keep it low, increase your limits when you can. Don’t stress about it.
Increase limits when I can - this can be done by having 10-15 credit cards, am I thinking about this right?
Chief
My credit score is 840 and I only have 2 credit cards, a line of credit, a car loan and my mortgage. There is no need for 10+ cards to have a good credit score.
Agreed. Many people I know with great credit only have one or two cards.I wouldn't suggest having tons.
The key is to not charge more than 10% of your available limit per month and then pay them off every month. 2-3 is the most you should have. It’s enough to show that you use your credit but don’t abuse it. Debt-to-income is the other big component. Need to keep that low.
Pro
I have a bunch but I don’t need them. Really just 2 or 3 would be enough. I would personally just do the Chase Trifecta for a simple setup. I have 10+ because my card spend is usually over 150k a year so optimizing it well brings me over 10k back a year. The more simple setup is all you need
A lot of great advice out there. I’d probably open at least one more CC if you don’t have other trade lines on your credit such as auto, personal, student loans. Keep the balances low compared to the limits and increase limits if possible. I’ve got a great 0% down program if you get to a 720. (FL, GA, AL,SC,NC & TN only). Feel free to call me with any questions 813-731-9359.
Owner occupied only but do not have to be first time buyer and no income restrictions.
Even though it would be good for your score to have more, it would NOT be good for your score to do that now if you plan to buy in a few years. Each card you open is a hard inquiry that won’t drop off for 2 years, and you don’t want the hard inquiries denying your credit when you go to buy. Also as others have mentioned, opening new accounts now will only lower your overall average credit age, which is not a good thing. The best things you can do now are…
1. Pay everything on time
2. If any derogatory marks, challenge them or write goodwill letters to remove them
3. Do NOT open new accounts
4. Pay down debts that are large enough monthly bills to impact your debt to income ratio (if bad enough it will make a dent in your qualifying amount)
Hahahaha hopefully the person who has 10-15 has a significant net worth of at least $1,000,000 and even then that’s too many. Let’s assume you have 3 credit cards JP Morgan Chase Sapphire Rewards card, Cap One Venture Card, and Marriott Bonvoy Visa you’d be paying $1,065 in fees just to have the card. Anyone holding 10-15 well just assume they have a $65 annual charge they’d be paying $975 for the cards at approximately 20-23% interest this is stupidity in real life happening before your eyes. You are doing the right thing.
https://www.nerdwallet.com/article/finance/how-many-credit-cards
This gives a pretty accurate overview about what happens if you open one credit card. You lose a handful of points that should be gained back within 6 mos. and will benefit your score in the long run if you keep the balance low compared to the limit. An inquiry/new account is not that big of a deal as long as said inquiries are spaced out over time and you are not opening multiple credit cards at once. If your dream of ownership isn’t for a year or so I’d suggest to open one of the credit cards suggested mentioned in the above thread (venture, sapphire, etc).
You can also be added as an authorized user on an account of someone you trust to boost your score. As long as they have strong payment history this will have a positive effect on your score. This is one of the ways I helped my sister build her credit. Be aware though if they miss payments or max out their cc it could result in a negative impact as well.
Older cards with higher limits are best. So keep getting limit increases on your existing cards before you open a new one. Every new account you will be dinged for 1) hard inquiry and 2) too new of an account.
That being said, I have 8 and I’m 25 lol.
3 from parent’s credit union while in college. 3 after college - Capital One, American Express. 1 Sephora, 1 Ulta card.
I use 1 for monthly auto charges, 1 for day to day purchases. I had a lot of cc debt from college I consolidated into a loan I’m paying off right now.
I’m 24 and has 4 credit cards open. Lol! I agree with everything they wrote here, plus as someone who’s also in the process of buying my first home with not that big of a salary— credit card min monthly payment is considered in DTI so the 10-15 credit card might not be very helpful!
I think a good rule of thumb is open at least once a year and open purposefully like if you’re planning on traveling, open a travel credit card and get that awesome sign on bonus points that you can use for traveling etc.
I have a couple just because I got a discount on a large purchase. That being said, I try to have 3 standard so that I carry 2 in my wallet and the 3rd at home in case I get my wallet stolen. I can cancel two and still have one.
Either have a good mix of type of credit: personal loans, auto loans, credit cards, student loans, or just have a few credit cards (minimum 4/5). I only got CC on my credit report, I have 11 (3 are business cards). I got pre-approved for $250k last year when I only had about 6/7 cards, I’m only 22.
I’m a financial counselor, let me know if you have any more financial questions.
As others have said it’s best to have a few cards, with a specific purpose, and have other credit types like auto, etc. the best advice I ever received for credit score is to never put more than 30% of the credit limit on the card at anytime. That will boost you faster and if you also pay balance in full they will raise the limit faster. Good luck.
In my opinion it’s not necessarily how many credit cards you have, but how well they complement each other so you can maximize your rewards/cash back
Build an ecosystem so that you can maximize rewards, for example some people have chase sapphire reserve, freedom unlimited and freedom flex where you can essentially transfer all your rewards on those 3 into ultimate rewards for chase sapphire reserve
Capital one also has a useful ecosystem with venture x and a savor credit card
www.thepointsguy.com
2 or 3 is plenty. Any more gives little benefit, and increases the chance they will go dormant or missed payments, both of which could hurt your score.
I have 4 or 5 credit cards and my FICO score is 875 out of a possible of 900 according to my Citibank app. You don’t need a lot of cards, in fact it’s the opposite.
Subscribe to the Expedían service. You can track record on a daily basis. Read what they say is affecting your score. Learn how they calculate each number. You can also test what various actions will do to your score.
I am getting ready to buy a house in the next year. I started this process. I have raised my score 70 points by following their instructions and figuring out how they calculate their numbers. My utilization was showing as a high % of available credit. I recreates their calculation. It turns out they were utilizing the amount drawn on my American Express (often $20,000+) but putting the credit available on the card at $0.
I called American Express credit reporting group, got them to report for payment purposes, not balance purposes.
Also Experian said my score would go up if I got an installment loan that reports (not a credit card). That did not occur to me.