I have 4 major credit cards all with 0 balance. How many do I need for good credit?
Answers:
The simple answer is: Leave all 4 major credit cards open unless a human loan officer (mortgage or secured auto lender) tells you the loan will be refused unless you close an account. Do not keep positive balances on more than 3 of them.
15% of your Fair Isaac (FICO) score is for length of credit history, the longer the better. The average credit user has an oldest open account that has been open for 14 years. Where do you fit on this scale? These are the toughest FICO points to earn. They also score you on the average length of time all your open accounts have been open. So if you close your oldest accounts, you'll hurt your score because (1) you lose your oldest account and (2) the average age of your accounts goes down.
10% of your score is on credit mix. The good types of credit are mortgage, secured car installment loan, prime (unsecured) major credit card (MC, V, AmEx, Disc) and store cards (Best Buy, Home Depot, etc.). The bad types of credit are payday loans, personal-finance loan accounts for purposes of cash advances, still-secured credit cards and overdraft loans. Ideally, you want to have at least one account for each of the good types of credit. Close the last account in one of the good types of credit, and down goes your score.
30% of your score is credit utilization: how much of your credit limit is used up by your balance? On each revolving account, you need to keep your balance below 30% of your credit limit, or you will hurt your FICO score. For example, if you have a $500 credit limit, you must not have a balance higher than $150, which is 30% of $500. So a paid off account will have a zero balance on it, and you can't get any better than 0% utilization. They also look at total utilization: they total up all your balances, and all your credit limits. That total percentage utilization must be kept below 30% of total credit limits, or you'll hurt your FICO score. Close a paid off account, and you'll take away $0 in total balance, but you'll take away all those dollars in credit limit, and up goes your total utilization, and maybe down goes your score.
You can use the cards to score even more points by establishing good payment history on them. 35% of your FICO score is on payment history. Make small NECESSARY purchases on them (a utility bill on auto-charge is great, along with grocieries or gasoline), and pay the bill in full, on time, the following month.
So long as you make purchases with the cards about every 6 months, the company will keep the accounts open rather than close them for inactivity.
I have no legal or financial interest in the companies mentioned.
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You only need One to build your credit,however having to many cards could hurt your credit by not using them,showing that you have several credit lines and don't use them,you could be denied credit loans.
There is nothing to do with major credit cards you can build your good credit from just single card but you have to use the card in proper way mean to say regular payment of cards and no fluff use i think u understand
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What is your current score?? You CANNOT build good credit without a demonstrated payment history, which means you have to use your cards sometime, even if it's only a small amount that you pay off quickly. If you look at a credit report, it will show your high balance. It's not good for that high balance to be equal to or greater than the credit limit, but to have a balance of 10-20% every now and then will show that you will reliably pay your bills on time. That being said, your credit is probably good, even if not great with where you are.
Types of credit, and credit line all contribute to your score. I've heard that mortgage loans are considered a sign of stability and enhance your credit.
VT is simply wrong.
Your credit score is made up of the following things;
1. Payment history 35%
2. Time in bureau 15%
3. Type of credit used 10%
4. New accounts 10%
5. Debt to income ratio 30%
As you can see 1,2 & 5 are the most important as far as score is concerned.
If you have credit card accounts that have been open for a long time and have good pay history's , do not close them.
Use your credit cards for everyday things like gas and food, never exceed 30% of your cridit limit in any given month and pay them in full before the due date.
You need a mix of at least 3- revolving accounts (credit cards) and 2- installment accounts (auto, boat, furniture, homes or personal loans) all with good long pay history's to have both a great score and profile.
You alread have to many.. U don't need anymore and it takes awhile for your score to go up..
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