Credit cards

[Batfish]

Does having extra credit cards with no balance affect credit score?

[Joey_P]

Yes.

Whether it affects it positively or negatively depends on what else is going on with your credit report though.
All else being equal, if you have three credit cards that are close to their limits, having another one with no balance should help your score.
OTOH, if you have 10 other unused credit cards all with no balance, having an 11th one with no balance, can hurt your score.

[md2000]

IIRC one of the things that counts on your score is your total liability - how much you could run up in debt if you maxed everything. Having a lot more credit cards that you need could hurt your score, especially if you have high limits. If you don’t need it, if you haven’t used it for a year, cancel it.

The bank has to consider - what if you got an offer too good to pass up from a Nigerian banker? Or the soon-to-be-ex decided to get even? How much would you owe, and so how much would that impact the ability to pay down thier loan?

[Joey_P]

@md2000

IIRC one of the things that counts on your score is your total liability - how much you could run up in debt if you maxed everything. Having a lot more credit cards that you need could hurt your score, especially if you have high limits. If you don’t need it, if you haven’t used it for a year, cancel it.

But you have to be careful doing that as well. If you cancel your oldest card, you shorten your credit history…might not be a big deal if you’re 50, have had credit card for 30 years and your second oldest card you’ve had for 27 years. But if you’re 25 and you cancel your oldest card you’ve had for 4 less years, you might ding your score.

[Philster]

Helps to have them! Don’t close credit cards with 0 balances. Your available debt and ratio will go down, and so will your score.

[Batfish]

@Joey_P

Yes.

Whether it affects it positively or negatively depends on what else is going on with your credit report though.

@md2000

Having a lot more credit cards that you need could hurt your score, especially if you have high limits. If you don’t need it, if you haven’t used it for a year, cancel it.

@Philster

Helps to have them! Don’t close credit cards with 0 balances. Your available debt and ratio will go down, and so will your score.

I’m glad we cleared that up.

[Da_ICON]

@Batfish

I’m glad we cleared that up.

Pfft…absolutely.

I just this evening quailified for a $10,000 line of credit with my bank. I have 3 credit cards totaling about $8000. I intend to use the line of credit to pay them off.

The loans officer asked about one (the one with the highest interest rate - but also the oldest - 4 yrs compared to the one her bank issued - 2yrs). She said I should get rid of it as we talked a 1st mortgage and she indicated all this available credit would hurt my chances.

So if I cancel the oldest one does that really hurt me??

[rat_avatar]

Here are some tips if you are looking to maximize your credit score.

http://ficoforums.myfico.com/fico/board/message?board.id=ficoscoring&thread.id=12673

Number of credit cards: FICO High Achievers have an average of 4 to 5 credit cards (including open and closed cards, bank cards and department store cards). (found on a search)

Recent CC use: Your FICO score evaluates your mix of credit cards, installment loans and mortgages. People who demonstrate responsible use of different types of credit are generally less risky to lenders. You helped your FICO score by showing recent use of a credit card. (comment only, no percentage given)

Balance reported on CC’s: Your FICO score evaluates how much you owe on your revolving accounts (such as your credit cards). The amount you owe on these accounts is too high. Most FICO High Achievers owe less than $600 on revolving accounts such as credit cards and department store cards. (on Phoenix-rising’s report)