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Is 3 really the magic number -- of cards for rebuilding?


tweak
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The last post in this topic was posted 1635 days ago. 

 

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I had not heard of "50% of cards reporting a balance" discussed as a FICO threshold before I started this thread.

And I'd like to apologize to CV for dismissing this notion earlier when he brought it up. :-)

 

 

Apologize? Nonsense.

 

I sometimes give reflexive responses, and I generally appreciate it when someone responds with polite skepticism. Makes me think. :D

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Regardless of how many, your AAOA will suck if you add 1-2 cards and do nothing else while rebuilding.

 

The moment you add another account, your AAOA will tank.

 

That's the point BW was trying to make.

 

If you want a stable AAOA for the future, 1-2 cards doesn't cut it.

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My score went up every time I added a card. I have 3 now. 1 card 674, 2 cards 717, 3 cards 740.

Having 50% or more cards with balances is a negative in fico scoring. It might have been more pronounced in 04 but its still there in 08. Bottom line you want enough cards to not make your score go down. If you get 3 and there's no downside from 2 then the extra payment history and age is zero cost benefit. Will your score be higher if you have 3 cards for 12 months as opposed to 2.... Most definitely.

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  • Admin

                            INSTANT MERGE SUMMARY
                            ---------------------
ACCOUNT DISTRIBUTION                               CURRENT STATUS(tradelines)
Account Type      Count       Balance      Payments Curr Clsd Unrt 30  60  90+
  Real Estate        6       $119,517        $1,297  6    -     -   -   -   -
  Installment        3        $13,705          $249  3    -     -   -   -   -
  Revolving         28         $7,961          $196 13   15     -   -   -   -
  Other              0             $0            $0  -    -     -   -   -   -
  Total             37       $141,183        $1,742 22   15     -   -   -   -

INQUIRIES                  PUBLIC RECORDS   HISTORICAL DELINQUENCIES(count)
  6 Month Total      1        EFX     N/A   Account Type  LastDlq  30  60  90+
  Elim. same day  -  0        XPN     N/A     Real Estate           -   -   -
  Adjusted Total     1        TUC     N/A     Installment           -   -   -
  New Trades(6 mon)  2        Last 2yrs N     Revolving             -   -   -
                                              Other                 -   -   -
  Oldest Trd: 09/87   On File: Unavailable    Total                 -   -   -
------------------------------------------------------------------------------
Only Applicant/Co-applicant information included in the Summary.


                           BUREAU SCORE INFORMATION
                           ------------------------
XPN FICO Classic 08 Auto       (APP)=   855 Factor:    30,    33,    14,    10
  30 TIME SINCE MOST RECENT ACCOUNT OPENING IS TOO SHORT
  33 PROPORTION OF LOAN BALANCES TO LOAN AMOUNTS IS TOO HIGH
  14 LENGTH OF TIME ACCOUNTS HAVE BEEN ESTABLISHED
  10 RATIO OF BALANCE TO LIMIT ON BANK REVOLVING OR OTHER REV ACCTS TOO HIGH


                        ****** DEROGATORY ITEMS ******


Public Record Information:
--------------------------
No Public Record Information found

Maybe this helps.

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  • 4 weeks later...

Can someone please clarify that AU cards do NOT count toward having three open cards

 

for the purposes of FICO scoring, and having less than 50% of cards reporting a balance?

 

 

IOW, 2 open individual cards + 1 AU card will not cut it -- for doing the $2 trick --

 

and I would need 3 open individual cards to do this correctly, right?

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Ok, I figure the following reasons are why 3 is the "sweet spot".

 

1. Aging 3 cards for as long as possible is better than 1 or 2 for AAOA later.

2. Utilization can be better monitored with more cards/limits.

3. 2-4 gives the best boost for FICO purposes.

4. If you are rebuilding you are most likely getting subprime cards. Can you think of more than 3 subprime cards you want to have as your oldest account, possibly forever?

 

That is why I always thought 3 was the magic number, could be wrong, but I think Cap1, Barclays(or discover or walmart) for FICO, and maybe a CU secured card (to graduate later) might be the best 3 to get when starting out. Trying, of course, to avoid store cards and toy limit hell. My 2 cents FWIW :)

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mendelssohn,

 

Are you confirming my quote below --

 

must have 3 INDIVIDUAL open revolvers -- not including AUs -- to count for <50% of cards with a balance?

 

 

% of cards with balances is the main reason.

 

Can someone please clarify that AU cards do NOT count toward having three open cards

 

for the purposes of FICO scoring, and having less than 50% of cards reporting a balance?

 

 

IOW, 2 open individual cards + 1 AU card will not cut it -- for doing the $2 trick --

 

and I would need 3 open individual cards to do this correctly, right?

Edited by tweak
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Ive always assumed the reason was slightly different.

 

If you have three cards.. thats three different credit lines that can get CLI increases.. which will further cause the other two accounts to CLI to remain competitive.. and they will play against each other for additional CLI. plus when you apply for a new card youll be more likely to get a higher limit because of the other three higher limits. and hence higher score / balance management history.

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Regardless of how many, your AAOA will suck if you add 1-2 cards and do nothing else while rebuilding.

 

The moment you add another account, your AAOA will tank.

 

That's the point BW was trying to make.

 

If you want a stable AAOA for the future, 1-2 cards doesn't cut it.

 

Exactly, which is why I personally think it's okay to add a bunch of store cards in EARLY rebuilding IF you plan on using them and keeping them open. I added about six store cards in July 2013 and it helped dramatically with AAOA and approvals for better cards. I have so many accounts that my AAOA barely takes a hit now when I add another.

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I'm not sure, but don't count on AUs when building your profile.

 

We do know that they carry less weight in 08 scoring though.

 

I don't have any AU accounts so I never really studied it that much.

 

Understood.

 

But I'm still curious if anyone else knows how FICO counts AU revolvers -- in terms of number of cards with a balance?

 

 

 

I've searched -- and found ambiguous results for how AU cards affect the $2 trick.

 

In my case, this matters b/c I have 2 individual and 2 solid* AU revolvers.

I would rather not add a 3rd revolver until my reports are clean -- if the AU cards will count for the $2 trick.

 

 

* Spousal AU cards

Citi (2004), Chase (2010)

will never be closed

report full history to all 3 CRAs

I can fully control util and $0 reporting

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  • 3 weeks later...

So what's the final answer? Do AU's count or not?

Yes! I added my GF who has no credit at all to my AMEX as AU on FEB 7th with 1% util. CK EQ now says her score is 721, TU is 677 w/ 1 derog showing( I know..fako). I just added her to my C1 which will report next week as well as AMEX again both reporting 0%. I plan on pulling FICO's from myfico.com afterwards just to see.

Edited by dbldbo
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So what's the final answer? Do AU's count or not?

Yes! I added my GF who has no credit at all to my AMEX as AU on FEB 7th with 1% util. CK EQ now says her score is 721, TU is 677 w/ 1 derog showing( I know..fako). I just added her to my C1 which will report next week as well as AMEX again both reporting 0%. I plan on pulling FICO's from myfico.com afterwards just to see.

You can't say yes based on CK.

 

Update with real FICO information when you have it.

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When I was house shopping my LO said they want to see 3 tradelines. So I say it's for underwriting. Or if you are planning to lobbest thy holy hand grenade.

 

And the Lord spake, saying, First shalt thou take out the Holy Pin. Then shalt thou count to three, no more, no less. Three shall be the number thou shalt count, and the number of the counting shall be three. Four shalt thou not count, neither count thou two, excepting that thou then proceed to three. Five is right out! Once the number three, being the third number, be reached, then lobbest thou thy Holy Hand Grenade of Antioch towards thy foe, who, being naughty in my sight, shall snuff it.

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So what's the final answer? Do AU's count or not?

Yes! I added my GF who has no credit at all to my AMEX as AU on FEB 7th with 1% util. CK EQ now says her score is 721, TU is 677 w/ 1 derog showing( I know..fako). I just added her to my C1 which will report next week as well as AMEX again both reporting 0%. I plan on pulling FICO's from myfico.com afterwards just to see.

You can't say yes based on CK.

 

Update with real FICO information when you have it.

 

 

It's amazing to me the number of times lately where posters dismiss the info that's in CK but cite it anyway.

Edited by cv91915
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So what's the final answer? Do AU's count or not?

 

We need someone to get all their cards to 0 and have the AU card report a balance.

 

 

Yes, or more precisely someone with:

- fewer than 3 individual credit cards

- 3 or more total revolvers (including AU cards)

- no charge-offs reporting a balance

 

The question is then, what happens to FICO scores (given all but one card reports a $0 balance):

- if one individual card reports a $2 balance

- if one AU card instead reports a $2 balance

 

I can't do this because I have 2 COs reporting a balance.

 

Any GPs?

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So what's the final answer? Do AU's count or not?

 

We need someone to get all their cards to 0 and have the AU card report a balance.

 

 

Yes, or more precisely someone with:

- fewer than 3 individual credit cards

- 3 or more total revolvers (including AU cards)

- no charge-offs reporting a balance

 

The question is then, what happens to FICO scores (given all but one card reports a $0 balance):

- if one individual card reports a $2 balance

- if one AU card instead reports a $2 balance

 

I can't do this because I have 2 COs reporting a balance.

 

Any GPs?

 

Here is what my youngest has. Will this help as GP?

AU - Amex SPG & BCP

AU - Chase United X 2

Individual - Barclays US Air

All reporting 0.00 balance and Barclays FICO of 745 as of 4/2/15

 

ETA: AU - Amex OBC closed.

Edited by Rorer_714
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