RE: dept stores It is my personal observation (from viewing MANY credit reports) that credit "mix" does matter. I believe that it is built into the algorithm. Definite boosts for real estate loans, installment loans, a mix of both bank and store cards, and possibly even for gas cards. Points off for loans that are perceived as "finance loans" (a la Beneficial)

YMMV !

BigBucksNoWhammy said:The big guys are right. The important part to understand is:

It’s true that having too many open accounts can hurt your score. But once you’ve opened the accounts, you’ve done the damage. You can’t repair it by shutting the account, and you may actually make things worse.

I can only assume that ignorant people assume that by closing accounts it rectifies the "too many open accounts," while it reality it doesn't quite work that way. That you might have "Too many open accounts" is a proactive warning to not open them in the first place, not reactive advice to close down those you already have.

The trick remains, how many is too many? The answer to which depends on many variables specific to each individual. It's like asking how many licks does it take to get to the center of a tootsie roll tootsie pop? The world may never know.

I don't understand why opening an account and closing it would have an effect any different than not opening it to begin with. Especially if credit utilization isn't a factor.

Fairly good article overall (and discussion). I had to laugh when I read this in the article though:He says a good rule of thumb is to keep two to six credit cards. "Make sure the credit cards you have are Visa, MasterCard, American Express or Discover, because merchants will take almost any of them," he says.One dubious claim is that many merchants will take AMEX and Discover. But the reall laugher is the 2 to 6 number. lol, I have opened 2 to 6 TIMES that many cards (12 cards) in ONE DAY! And my credit report at times has gotten so long it's overflowed into a second report. Yet providers keep giving me big new credit lines for some reason

But I guess it's for my own best interests that guys like this perpetuate that myth. If enough people start doing what I & some others here do, the credit companies might decide it's worth the hassle to start trying to profile and exclude us "serial credit acquirers."

puddnhead said: lol, I have opened 2 to 6 TIMES that many cards (12 cards) in ONE DAY! And my credit report at times has gotten so long it's overflowed into a second report. Yet providers keep giving me big new credit lines for some reason



Out of curiousity, care to share how many open credit card lines you have right now? I have "only 15".

I've told myself no more apps in 2005 but there's so much temptation...

Googler said:didYOUsearch said:
Its safe to say me , DaveHanson, and some other FWers have far more actual, real world experience than any "expert" . This is financial myth #2

But dont believe us and our real world experience, Heres an article that addresses the "closing accounts" myth
http://moneycentral.msn.com/content/Banking/Yourcreditrating/P41876.asp

I'm not necessarily disagreeing with you. I'm just pointing out that what you say is far from being universally accepted.

Isnt EVERY financial strategy far from being univerally accepted? If there was a clear cut best strategy for everything, we would all be doing the eaxct same thing and copycatting each other. Thats not a good idea.

didYOUsearch said:I don't follow...opening and closing DOES leave you worse off than not opening to begin with.

You are dinged for the inquiry if the acct is recent.
You are dinged in your average age if the acct is old.

It's actually worse than this.

A new tradeline that's rapidly opened and closed will typically REMAIN on your credit report for 7-10 YEARS after you've closed it, reducing the average showing up on your credit report the entire time (although if you go on an application spree a few years later, thereby reducing your average age, this MIGHT cease to be a negative factor.

Also, it means you have an additional tradeline on your file that isn't working for you by getting you bonuses, raising your available credit percentage, et cetera. No question, all else equal, having a 21st or 51st tradeline that isn't increasing your available credit is worse than not having it not having it at all (though usually the effect is minor.)

This is one reason why I'm against application sprees for picking up small bonuses--the cost lasts for years, in ways that, while generally small, is tough to predict.

Contrast that with an "app-o-rama" designed to increase/convert EXSITING lines. The ONLY negative here is the temporary one of additional inquiries, which fall off after a maximum of two years, and which often don't matter too much anyway--especially when they are bunched together. The other effects--larger lines, more useful lines with the same "creation date"--are all POSITIVE or at least neutral.


[BigBucksNoWhammy: FWIW, as of this morning, I show 55 accounts in my name, around 15 or which are closed for various reasons.]

SoBeyondTheNorm said:puddnhead said: lol, I have opened 2 to 6 TIMES that many cards (12 cards) in ONE DAY! And my credit report at times has gotten so long it's overflowed into a second report. Yet providers keep giving me big new credit lines for some reason
Out of curiousity, care to share how many open credit card lines you have right now? I have "only 15".Sure. My most recent equifax report says I have 38 open credit lines. Counting closed I have 62.

This total does not include business lines, of course

I also thought average age was for OPEN accounts. If this is not true, then why have so many on FW urged to not close old accounts? Sure closing an account affects your total available credit, but I thought shortening the age of open accounts was the prime reason.

Not that I am not interested in the final outcome of this latest debate (I am), and not that I am trying to change the subject (I'm not) but I came across this while searching and think it is good evidence of just how much contradictory and other misinformation is out there.

"Seven ways to start improving your credit score today"

Have as few open credit card accounts as possible. Don't open new accounts that you don't need. The more open accounts you have, the lower your score even if your accounts have a zero balance. Why? If you have an open account, it is assumed you could charge on it at anytime. Therefore, even though you have a zero balance, the account is viewed as debt you could possibly incur at any moment.


Which sounds like the typical comment from a mortgage officer, when they suggest closing unused accounts.

Adding to the earlier debate, don't closed accounts fall off the credit report after a period of several years anyway? So if you close an account, it's age will/will not (depending on who you believe) affect your credit score and if it does, then it will only do so until it is bumped down the road, right? If so, then it's still wise to not close accounts regardless of popular-though misinformed-advice to the contrary such as that quoted above?

Is it just me or far from getting clearer this topic is becoming more complex and confusing?

Another source:

How To Increase Your Credit Score

From which we get the following suggestion:

Cancel some cards if you have too many, but if you are carrying debt try keep the ratio of debt to available credit limit at around 50% with about four cards for the best score. Don't cancel cards if it will put you below this ratio, and if you have to cancel cards cancel ones that are more recent that you have less history with. We would not recommend canceling cards unless you have to since it's not worth the risk short-term, however over longer time periods it will help.

Unfortunately the writing is such that the reader can interpret different meanings. Are they implying four cards is an ideal number? Or are they stating that four cards with balances is the best? Furthermore, I have no idea what they mean by "short-term" risk over closing an account.

If ever the phrase "the more I learn the less I know" was more applicable. . . .