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The "ideal" number of accounts for FICO scoring is 5, not 3


mendelssohn
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The last post in this topic was posted 1883 days ago. 

 

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Experian:

 

What's hurting your score?

 

Few Accounts Paid On Time

You have few accounts that are in good standing.

Number of your accounts currently being paid as agreed

0 accounts

The FICO® Score considers the number of accounts showing on time payments. In your case this number is too low either because you have very few accounts or you've missed payments recently on some of your accounts or have accounts with derogatory indicators reported.

FICO High Achievers have an average of 6 accounts currently being paid as agreed.

 

What's helping your score?

No Missed Payments
Long Credit History
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The Fico above is from Credit Check Total (Experian). There are heaps of old closed accounts that were in good standing and no derogs, but this PenFed is the only current account. This is on the Experian site. On EQ and TU they are showing an open Amex account, however I'm suspect on that since I burned them for +45K.

 

New Bank/Credit Card
PENTAGON FEDERAL CR UN reported a new account on your EXPERIAN Credit Report.

A new bank / credit account was added to your Credit Report.

ALERT DETAILS Alert Date Jun 10, 2017 Source EXPERIAN Company PENTAGON FEDERAL CR UN Address PO BOX 1432 ALEXANDRIA, VA 22313 Phone 703-838-1000 Activity Credit Card

 

 

Yep. That's why your EX score is 756. Those old accounts help a lot even though they were closed as long as you don't have negs.. Make sure you get credit cards before they fall off which is usually around 10 years after the date they were closed.

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Thanks Cash. Indeed that was my plan. I have several paid off 7 figure mortgages that fall off in 2020 so hope I can restore strong FICOS by then.

 

BTW; below is the derog EQ won't remove but EX and TU did. Am I correct in thinking that the 09/2010 (first delinquency date) is the date I should use when calling BMW?

 

ems As of Date Reported 06/09/2017Balance Amount

Amount Past Due $11,692Date of

Last Paymn 01/2011

Actual

Paymnt Amount

Scheduled Paymnt Amount

Date of 1st Delinquency 09/2010

Date of Last Activity

Date Maj. Del. 1st Rptd

Charge Off Amount $47,125

Deferred Pay Balloon Pay Balloon Date Start Date Amount Pay Date Closed

$71,692

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Thanks Cash. Indeed that was my plan. I have several paid off 7 figure mortgages that fall off in 2020 so hope I can restore strong FICOS by then.

 

BTW; below is the derog EQ won't remove but EX and TU did. Am I correct in thinking that the 09/2010 (first delinquency date) is the date I should use when calling BMW?

 

ems As of Date Reported 06/09/2017Balance Amount[/size]

 

 

Amount Past Due $11,692D[/size]ate of

 

 

Last Paymn 01/2011

Actual[/size]

 

 

Paymnt Amount[/size]

Scheduled Paymnt Amount[/size]

 

 

Date of 1st Delinquency 09/2010

 

 

Date of Last Activity[/size]

 

 

Date Maj. Del. 1st Rptd[/size]

 

 

Charge Off Amount $47,125

 

 

Deferred Pay Balloon Pay Balloon Date Start Date Amount Pay Date Closed[/size]

 

 

 

 

$71,692[/size]

Yeah. It'll fall off in a few months.

 

If you wouldn't mind disclosing a bit of info on how many and what the oldest closed accounts are it could help people in similar situations. Also, what the approx. dates they were closed. We don't have a lot of info like that with a clean report and old, closed accounts. Especially the effects of a adding a single new CC on it.

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Bob Wang's research.

 

This used to be common knowledge here but has somehow been lost since he left.

 

 

If you don't mind me asking: I have run across his name on a consistent basis while reading older posts. He looked like a prolific contributor. I assume he is gone for good? Or does he ever check back in?

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Cash: I don't mind sharing the info, perhaps you can make sense of it. Here's a partial listing of EQs record of satisfied accounts that are now closed. Hope it is of help.

 

Oldest account 42 Years

Average Age 19 years

Oldest Accounts 1975 (AMEX)

 

AMEX (4): ( Oldest one closed in 2005 last in 2010)

BOFA: Visas (2) (Oldest closed in 2005)

Citi MC: Closed in 2007)

US Trust (Now part of BOFA) mortgage: Closed in 2006

Republic Bank Mortgage closed in 2008

BOFA L/C: Closed in 2007

Chase (2): Closed in 2007 and 2010

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A CO from BWM (chase) which they once again say it's correct. I need to call BMW tomorrow and call EX to see what they determine is the fall off date.

 

I meant call Equifax today; it's the only derog remaining. Apologise for the confusion.

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Cash: I don't mind sharing the info, perhaps you can make sense of it. Here's a partial listing of EQs record of satisfied accounts that are now closed. Hope it is of help.

 

Oldest account 42 Years

Average Age 19 years

Oldest Accounts 1975 (AMEX)

 

AMEX (4): ( Oldest one closed in 2005 last in 2010)

BOFA: Visas (2) (Oldest closed in 2005)

Citi MC: Closed in 2007)

US Trust (Now part of BOFA) mortgage: Closed in 2006

Republic Bank Mortgage closed in 2008

BOFA L/C: Closed in 2007

Chase (2): Closed in 2007 and 2010

 

You're lucky many of those are still reporting. CRAs typically purge them at 10 years. Get more cards without delay as soon as the baddies drop off the other CRAs in a few months. That will give your new card time to report. Make sure you use it and PIF in the meantime. Looks good on your reports.

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Cash: I don't mind sharing the info, perhaps you can make sense of it. Here's a partial listing of EQs record of satisfied accounts that are now closed. Hope it is of help.

 

Oldest account 42 Years

Average Age 19 years

Oldest Accounts 1975 (AMEX)

 

AMEX (4): ( Oldest one closed in 2005 last in 2010)

BOFA: Visas (2) (Oldest closed in 2005)

Citi MC: Closed in 2007)

US Trust (Now part of BOFA) mortgage: Closed in 2006

Republic Bank Mortgage closed in 2008

BOFA L/C: Closed in 2007

Chase (2): Closed in 2007 and 2010

 

You're lucky many of those are still reporting. CRAs typically purge them at 10 years. Get more cards without delay as soon as the baddies drop off the other CRAs in a few months. That will give your new card time to report. Make sure you use it and PIF in the meantime. Looks good on your reports.

 

 

Cash; thanks.

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Credit again to Bob Wang on this one, but I can confirm it as it seems to be forgotten

5 matters with number of cards reporting a balance.

On some models there is an additional ding for 50% or more of your cards reporting a balance.

5 is the minimum number of cards necessary to let two cards report without that additional ding.

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One of the more interesting facts that came out in this thread is that it's possible to get a reasonably high limit CC when your credit reports can't generate a FICO score. This implies the creditor was able to look beyond FICO scores to understand that clean reports but with old, closed accounts, would be acceptable and know that subsequent FICO scores would be fairly high.

 

Likely that this is very dependent on the issuer's sophistication.

Edited by cashnocredit
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  • 5 months later...

I've seen quite a few people repeating that 3 revolving accounts is ideal for FICO scoring purposes, and this is not completely accurate. I think this came about from the immediate FICO impact of adding cards 1-3.

 

To clarify a few points:

  • cards 1-3 provide an immediate FICO boost, with card number 1 being the greatest
  • cards 4-5 result in a short-term score dip, but allow for higher FICO scores
  • what matters is that the account reports as revolving (store cards and NFCU CLOC count the same as major CCs)

When advising people about the minimum for maximizing FICOs, the number is 5, not 3. I personally also don't see the need to rush to 5 cards if you are looking to get in with Chase. Having 1-2 open accounts, such as a NFCU CC and CLOC, can be beneficial until you get in with Chase, and then you can start adding more accounts.

 

 

 

Thanks for explaining this I have quite a few groups I belong to with a lot of wrong info.. *sigh*

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