Is it better to have a mix of different credit cards?

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TheKidRico
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Is it better to have a mix of different credit cards?

Postby TheKidRico » Fri Jul 27, 2012 3:31 am

Hi new to the forum and have looked at a few threads. My question is would having a mix of credit cards help my score? I guess what I'm trying to say is that all I currently are a wells fargo visa card from when I was employed there and a u.s. bank visa card. Would having an amex or discover help at all?


MemberSince99
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Postby MemberSince99 » Fri Jul 27, 2012 4:30 pm

Welcome.

Your score doesn't really care if you have a mix (just visa or mastercard and visa for example). It's not factored into your score which type the cards are. So adding an amex or discover might help your score, but not more than say adding another visa or two would. So just get the kind you want that fits your needs and you will use, and you will be good.

Money card
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Postby Money card » Sat Jul 28, 2012 12:39 am

it does look better to have a bank card, a Discover and an American express, the reason we say this is because
when you look at your credit report if for example let's say you have a capital1 mastercard, chase freedom Visa and your wells fargo cards
when you or a creditor looks at your report all it will say is what banks you have, but if you have a wells fargo, Discover and an American express, the creditor will see a major bank , Discover and an American express this looks impresive if you ask me.
if your approved I think it's a good idea.

MemberSince99
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Postby MemberSince99 » Sat Jul 28, 2012 7:36 am

He asked about score though, as far as score it makes no difference whatsoever. Maybe an analyst will be impressed that he has an amex plat (though if they know amex they will pity him more for it) but the score doesn't care at all.

TheKidRico
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Postby TheKidRico » Sat Jul 28, 2012 6:19 pm

I did mean credit score. But never thought to consider what an analyst would think about major banks on my report.

MagneticStripes
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Postby MagneticStripes » Sat Jul 28, 2012 7:51 pm

I believe if you have a charge card (such as Amex Gold, Chase Ink Bold etc.), it will help since these are reported as an open line of credit rather than revolving, which most credit cards are reported as (since you don't have to pay off every month and there is a defined limit). Having a mix of different types of credit (open line with charge card, revolving with credit card, home loans, car loans) would increase score moreso than just credit card from different issuers.

hematino
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Postby hematino » Mon Jul 30, 2012 12:07 am

MagneticStripes wrote:I believe if you have a charge card (such as Amex Gold, Chase Ink Bold etc.), it will help since these are reported as an open line of credit rather than revolving, which most credit cards are reported as (since you don't have to pay off every month and there is a defined limit). Having a mix of different types of credit (open line with charge card, revolving with credit card, home loans, car loans) would increase score moreso than just credit card from different issuers.

+1

Mix of credit is supposed to account for 10% of your FICO score. It's not a huge percentage by any stretch but if some of the heavier components of your score aren't perfect, having a mix of credit types on record is a way to boost your credit score.
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MemberSince99
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Postby MemberSince99 » Mon Jul 30, 2012 6:31 am

I had 3 Amex cards, Discover, Visa and Mastercard and my score did not go up as a result of that, just as a result of having several cards.

hematino
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Postby hematino » Mon Jul 30, 2012 12:30 pm

MemberSince99, sorry I should have been more clear. That's not exactly what I meant-- you could have 3 revolving credit cards or 37, it makes no difference and does not affect the 10% credit mix part of your FICO. Regardless of whether they are all Visas or you have a combination of Visas, Mastercards, Discover, American Express, etc, it doesn't matter to calculate the numerical score. It DOES makes a slight difference though when at least one of your cards is a charge card (as opposed to a revolving card) because they get reported differently to the credit bureaus. Don't get me wrong, it won't make as big of a difference as if you have revolving credit cards and say a mortgage or auto loan, but it does get taken into account and will slightly boost your score in the long run. Hope this makes more sense.
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MemberSince99
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Postby MemberSince99 » Mon Jul 30, 2012 12:40 pm

It depends on the scoring model. As a sole result of my last Amex charge dropping off my report of whatever flavor of TU CreditKarma uses, my score on there went up 8 pts. It's not a FICO, and obviously it's a very flawed model when you see that, but it's really hard to come up with hard and fast rules on this stuff because it seems like it can be different with every version they come out with.

I agree with what you are saying, but this is also what I saw. I know no one really cares what CK says (nor should you) and only your FICO score really matters. I guess I just hope people are aware for every rule there's an exception, somewhere. Part of what makes this so crazy or so fun depending on your perspective!



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