Do I need to start new credit accounts? | TigerDroppings.com

Posted byMessage
bpfergu
Arkansas Fan
Member since Jun 2011
3429 posts

Do I need to start new credit accounts?



OK, so I've been using Creditkarma for quite some time now. I'm constantly looking for more ways to bump up my credit score, and I was looking at their "credit report card" to see where I could improve.

For "total accounts" I only had a grade of "C". Apparently it looks better if I have 21+ accounts open. I currently only have 13.

How do I approach this, and is it worth the effort? Do I just go and sign up for more credit cards or what? Seems kind of weird to me.







Back to top
Share:
Catman88
LSU Fan
Baton Rouge, LA
Member since Dec 2004
40286 posts

re: Do I need to start new credit accounts?


I have 14 accounts of various types.. CC, Student Loan,Mortgage and Auto. No store cards and it gives me a C as well. I dont pay much attention to that section.


This post was edited on 2/19 at 3:46 pm


Back to top
  Replies (0)
Siderophore
LSU Fan
Member since Nov 2010
3335 posts

re: Do I need to start new credit accounts?


Take everything on credit karma with a grain of salt.

It's useful as a tool, but also flaw ridden.

In your case, keep in mind that number of accounts makes for a really small factor of your score.






Back to top
JonTheTigerFan
LSU Fan
Central, LA
Member since Nov 2003
4830 posts

re: Do I need to start new credit accounts?


quote:

Take everything on credit karma with a grain of salt. It's useful as a tool, but also flaw ridden.


+1

Use CreditKarma to track changes on your credit report but that's about it. If you want to maximize your credit score, research what is involved in having the highest FICO score you can. You don't need over 20 accounts to have a good credit score. Opening more trade lines can actually hurt you as it lowers your Average Age of Accounts, which is a component of the FICO scoring model. Pay your bills on time, keep utilization on your credit cards at less than 10% and your score will rise. You would be surprised how much weight is given to your utilization of revolving credit. (Your balance/credit limit)






Back to top
Siderophore
LSU Fan
Member since Nov 2010
3335 posts

re: Do I need to start new credit accounts?


quote:

You would be surprised how much weight is given to your utilization of revolving credit. (Your balance/credit limit)


You can make your score jump 40-50 points just by having little or no debt on your CCs versus being maxed out on them.






Back to top
JonTheTigerFan
LSU Fan
Central, LA
Member since Nov 2003
4830 posts

re: Do I need to start new credit accounts?


quote:

You can make your score jump 40-50 points just by having little or no debt on your CCs versus being maxed out on them.


Yep. This is a terrible way to judge someone's creditworthiness IMO. I wish I had known this 4 years ago when I financed my truck. I got a crappy interest rate because my score wasn't high enough. I didn't realize having my only credit card with a $500 limit almost maxed out was what was making my score so low.






Back to top
Will Cover
Washington Fan
Whiskey Dick Mountain, WA
Member since Mar 2007
25321 posts

re: Do I need to start new credit accounts?


quote:

Yep. This is a terrible way to judge someone's creditworthiness IMO


Drug abusers, recent criminal record, age, salary, occupation, job stability or lack thereof, employment history, child/family support obligations, high interest rates being charged on a particular credit card or other account, military service, paying taxes in a timely manner, civil and/or public servants are not taken into consideration in today’s current credit model as to whether or not one can be trusted.

And to make matters worse, your income has nothing to do with your credit score. It is not reported to the credit bureaus or listed on your credit report.






Back to top
Vols&Shaft83
Georgia Tech Fan
Member since Dec 2012
18445 posts

re: Do I need to start new credit accounts?


quote:

And to make matters worse, your income has nothing to do with your credit score. It is not reported to the credit bureaus or listed on your credit report.



Exactly, to quote Dave Ramsey, "It's not an indicator of wealth, it's an I LOVE DEBT score".






Back to top
Siderophore
LSU Fan
Member since Nov 2010
3335 posts

re: Do I need to start new credit accounts?


I never understood why doesn't the debt to income ratio play a major role in a credit score.

Especially that it is one of the main checks they do when applying to major credit like a house loan.






Back to top
Catman88
LSU Fan
Baton Rouge, LA
Member since Dec 2004
40286 posts

re: Do I need to start new credit accounts?


quote:

I never understood why doesn't the debt to income ratio play a major role in a credit score.


It actually plays ZERO role in your credit score.

A person making 20k with 100k in debt paying their bills can have a much higher score than someone making 2 million a year with no debt but had a bankruptcy along the line to get there.

Its stupid.. But they rely on the banks to look at more than just a FICO. Sadly many only care about the score nowadays though.






Back to top
Vols&Shaft83
Georgia Tech Fan
Member since Dec 2012
18445 posts

re: Do I need to start new credit accounts?


quote:

I never understood why doesn't the debt to income ratio play a major role in a credit score.



It actually plays ZERO role in your credit score.

A person making 20k with 100k in debt paying their bills can have a much higher score than someone making 2 million a year with no debt but had a bankruptcy along the line to get there.

Its stupid.. But they rely on the banks to look at more than just a FICO. Sadly many only care about the score nowadays though.




Which is why I posted this thread earlier An alternative/supplement to the FICO score






Back to top
  Replies (0)
Will Cover
Washington Fan
Whiskey Dick Mountain, WA
Member since Mar 2007
25321 posts

re: Do I need to start new credit accounts?


quote:

I never understood why doesn't the debt to income ratio play a major role in a credit score.


Like income, your checking, savings, investment account activity and net worth – anything other than debt is not reported to the credit bureaus and does not affect your credit score.






Back to top
  Replies (0)


Back to top