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# Your FICO score can save you thousands of dollars in 5 minutes

This is a guest post by Michael Squier.

In the next 5 minutes, I will save you tens of thousands of dollars.

This should be a no brainier, but I’m sure many of you will be disappointed when you find that I’m not talking about a stock pick, or a magic money mutual fund. It’s something that actually exists; it’s your FICO score. If you don’t know what I’m referring to, think it has something to do with sports, or are just plain scared to discuss this topic; read on. Your FICO score is your credit rating and it can make and save you money. There are a few simple tips you need know to take control of your credit score, show it whose boss, and ultimately save you tens of thousands of dollars.

The Stats
The average American’s FICO score is 686. Scores range from 350-850 (citations; more on this later). The average credit card debt is \$8,400, with an average interest rate of 13.15%. It takes between 22-24 years to pay this debt off.

If you are reading this article it is my guess that you are striving to be anything but average. I want you to think of your FICO score as a lifelong grade, and even though “C’s get degrees” they will not make you rich. Since you are able to read, I can also surmise that you have gone to school and are able to remember grading scales. I want you to consider your FICO score as a grading scale that will stay with you for the rest of your life. This is your lifelong grading scale.

FICO scores range from 350-850.
780 above = A+
720 – 779 = A-
680 – 719 = B
620 – 679= C
550 – 619 = D
549 below = F

The good news is, there is no homework needed to improve your score. There are many different ways to improve your score, but we are going to focus on the major 3. I promise this will not require a finance degree.

1. Make your payments on time. Baring a major catastrophe, you should not spend more than you can afford. If you cannot pay off your credit cards each month, then you are spending too much money. That’s the bottom line. If right now you can’t afford to pay off the full amount, make sure you make your minimum payments each month on time. Lenders report to the three credit bureaus (Transunion, Experian, Equifax) each month. What they are reporting is your ability to pay back your loan, and to pay it on time. If you pay on time, your scores go up. If you pay late, your scores go down. Simple.

2. If you do carry a balance, try to keep your balance less than 40% of your high credit limit. For example, if your credit card limit is \$1000, you want to keep your monthly balance under \$400. The higher the monthly balance carried on your loans, the more it appears as though you are unable to pay off your debts. Would you lend money to a friend who owed a large amount of money to two other friends? Many lenders won’t either. The higher the carried balance, the more risky you become. The more risky you become, the more expensive your cost of money in the form of higher interest rates. Simple.

3. Don’t close old credit cards; pay them down. This may be different from what you have heard in the past. There are two reasons why you should keep your cards open. The first is that the credit bureaus want to see a long history of on time payments. If you close down that card, then the payment history is erased. Second, if you close your cards then you will affect your overall credit ratio negatively. We discussed this in the last paragraph. If you carry two credit cards with \$1000 balance, your total available credit is \$2000. Let’s assume one card has a \$300 monthly balance and the other has a \$500 monthly balance. Your carried balance would look like this: \$300 + \$500 = \$800 monthly balance. \$800/\$2000 high balance = 40%. If you close down the \$300 credit card your equation changes: \$500/\$1000 = 50%. Your risk has just gone up, which negatively affects your credit score. Pay those cards down. Keep your history for future lenders to view. This will improve your score. Simple.

Let’s assume you have followed through on the last three tips, and your credit scores have gone through the roof. You are earning an ‘A+’ on the FICO grade scale. One of the first things you will notice is a change in your mail. Instead of receiving collection company mail, you will start to receive love letters from an unlikely source, lenders. Credit cards will offer you 0% to transfer your balances or to open a card. Car dealers will give you 0% for a new car purchase. If you own a home, banks will offer you interest rates below prime on home equity loans. Money will be thrown at you.

Interest rates are directly related to risk. Having a high grade let’s potential lenders know that you are a low risk. Your low risk is rewarded with low rates. You become valuable. Your ability to leverage money has increased, and your ability to finish rich has taken a turn for the better.

If you are still not convinced that the past 5 minutes have been worth your time, let me give you one last dramatic example. Let’s look at what will most likely be the largest purchase you will ever make, your house. Let’s compare ‘Jack A.’ vs. ‘Jack F.’, and control every other variable that goes into qualifying for a loan, other than FICO score.

Jack F:

 Loan amount FICO score Interest rate Payment Total interest \$300K 549 8.25% \$2,253.80 \$511,367.93

Jack A:

 Loan amount FICO score Interest rate Payment Total interest \$300K 785 5.75% \$1750.72 \$330,258.68

Over the life of the loan, Jack A. will save \$181,109.25. Tens of thousands of dollars! Simple.

• Michael Squier, the author, is a professional in the world of Real Estate Finance, but he’s much happier drinking wine with his fiancée Rebecca. You can reach him by email with any questions or comments at mpsquier@aol.com.
• Some sites for further information:http://www.bankrate.comhttp://www.annualcreditreport.com

http://www.experian.com

http://www.transunion.com

http://www.equifax.com

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1. ##### Joe W.

How do you get your actual FICO score?

2. ##### Michael Squier

Go to www.annualcreditreport.com and request your free report. You are able to do this once a year. This will give you a break down of your credit history. To view your FICO score it costs \$5-10 extra. You can also go directly to the 3 credit bureaus (the links are below the article) and order your credit report. The costs differ, so refer to the sites. It’s wise to check your credit report twice a year to make sure there are no mistakes.

3. ##### dp

My friend has a 780 and was talking about things she does to maintain it. One piece of advice that she offered was something that I had never heard before. She said that after she makes a large purchase on her credit card (I’m guessing this is anything over \$100) she pays it online the next day. Is this something that will raise your score, or just a precaution so that your balance doesn’t get too big? t

• ##### Derek Rupert

Question? I currently have two credit cards and I pay them off every month and I always stay below 40% of my limit. The benefits on one card are not very good. I want to get a new card with better perks, possibly miles or better cash back incentive. I will be getting another card but should I close out the old one? I might not ever use it again. Will it hurt my FICO score if I close it?

4. ##### Gregory

Interesting post. I wonder, if you follow the advice how much can it impact your FICO score? I have just transferred some balances to a larger card and I was planning to close the accounts. If I keep them open, based on the advice here, I could expect to see an increase in my score. Just wondering what kind of impact might I be looking at?

5. ##### Michael Squier

Unfortunately, credit reporting is not a perfect science. But leaving credit cards with long clean histories, which sounds like Greg’s situation, will definetly imporve your score. I have a credit card that I have not used in 3 years, but I leave it open because the history on the card is clean.
The friend with the 780, has that great score because she is able to pay off the debt she has aquired. It’s not so much that she pays off the debt the next day, it’s that she pays it off on time, and keeps her debt level low compared to her high credit limit. I would recommend that anyone with little or no credit history, follow her advice. Open a credit card and use it for common purchases, gas, groceries, etc. Pay the card of in full each month and create a credit history. No credit is worse than bad credit.

6. ##### Mike W.

No credit worse than bad credit??!! I don’t think so buddy.

7. ##### Michael Squier

For example: With no FICO score, you will not recieve a loan to purchase a home, you have no tradelines, no history…no loan. With a 550 FICO (a bad credit score) you will still qualify for a home loan. This will not be a loan with great terms, but you will be offered a loan. No credit, is worse than bad credit. No loan, is worse than a bad loan.

8. ##### Doug A.

Dave Ramsey has an interesting take on this. His view is, why bother with a FICO score at all? So that you can borrow more money? Of course most of us need to borrow for a house, but he suggests going to a manual underwriter for that (i.e., someone who actually takes time to look at your financial situation, imagine that!). Dave said he tried to check his FICO score and they couldn’t even give one for him.

9. ##### LC

Oops. I’ve already closed down one account. Besides not having a higher credit limit, does having a closed account on record look bad? Does it lower my score?

10. ##### Michael Squier

One closed account will not hurt you in the long run. Make sure to keep your balances low and payments on time and you will be fine.

11. ##### Joy

Very well done blog! Worth my time. I have noticed my FICO score go up(due to opening a cc acount and paying off balance each month?) and I am glad you explained the debt ratio formula.

12. ##### aaron

A good illustration on how seemingly small change in interest rate on a loan makes a huge difference in total interest one eventually pays! It still amazes me to see it. Here is a good loan calculator that can illustrate these points even further: http://iloancalculator.com/calculators/loan_comparison_calculator1.html

13. ##### Kenneth

I work in the apartment business, and I deal with people’s credit reports every single day. If you’ve ever rented an apartment (comparable to buying a house), then we’ve seen your FICO score. I’m here to tell you that bad credit is worse than no credit by far. If you have no credit, you can always have someone be a guarantor for you, meaning you’re probably fresh out of college and not so much a risk. However, having BAD credit is a higher risk for us (and I assume real estate agents). Someone with bad credit will automatically be denied. Michael is exactly right in his article. Pay off the cards every month, and keep them open!

14. ##### Chris

Is there a way to cancel credit cards while keeping the history in your credit report? I’ve heard that if you have too much available credit, it can negatively impact your FICO score. Also, after a while wouldn’t some people start to rack up a lot (10?) of cards with no montly balance just sitting around preserving their history? It would also make it easier for you not to notice if you were the victim of credit card fraud if you didn’t check those cards as often.

15. ##### joseph volpato

Do not praise you Fico, pay off your bills and stay out of debt. has anyone ever heard of manual underwriting? it is possible to get a loan without creating a bunch a debt/ debt history. Granted sometimes the rate may be a little higher but think about it this is much better than having a ton of credit cards with INSANE rates that end up owning you in the long run. Believe me guys I have no debt other than my mortgage and my life is great and much less stressful because of this. for big purchases just save some CASH and put a down payment down that is at least 10% of the total purchase. Take my advice people debt sucks and fico revolves around debt. This is all very simple, don’t make purchases that you are not ready for or can’t afford!

16. ##### CM

I wish I had known about FICO scores and the U.S. credit system in general when I immigrated in 1997 — forget about cash. Credit is king! Esp. in the USA: Home of the Feds…

17. ##### Camille

How can I get a home loan with a credit score of 550? Husband was sick with M.S. and was the only one working at the time.

18. ##### Liv

My situation is this: My credit score is 554. I have a few bad marks on my credit but the main thing is a judgment against me for over \$9,000. I am bound and determined not to pay this hospital bill. What are my options?? And how much does that hurt me?

19. ##### debt-free

Liv and Camille-

you won’t get the help you need here. Ramit has no experience on these topics. He declaired himself a guru and started this blog. Oh and he somehow threw together a 1-hour class, and gives speaches – about what, I have no idea. If you want real help with real financial problems, then you need to look elsewhere.

sorry to be so harsh, but its the truth, and Rammy probably won’t post this anyways.

www.daveramsey.com

20. ##### Ramit Sethi

Of course I will. I’ll also point out that I do know what I’m talking about, I’ve never called myself a guru, and you’ve never heard me speak. One more thing: I’ve never forced people to read this site. If they think I know what I’m talking about, they can continue reading (and many do). If not, they’re free to go elsewhere–as you are.

Sadly you’ve brought your Dave Ramsey agenda here, but it’s confusing to me why you continue posting so frequently on a blog that you seem to completely disagree with. If I were you, I’d have better things to do.

21. ##### debt-free

Rammy – Debunking these stupid myths, and helping people who really need it is *totally* worth my time. Liv and Camille are in the soup right now and need real help. Dave answers questions like theirs weekly and sometimes daily on his radio show with the wisdom that comes from having been there, coming out the other side, and then later counciling people for the last 15+ years. Besides that, you’re entertaining, Rammy. ‘Listening’ to you justify buying a new car (you remember the “here’s why I’m smarter than consumer advocates, and everyone else who have been there and done that” post) made me laugh out loud at least 3 times.

I also love how everything is so black and white with you. To say I “completely disagree” with you is an overstatement. Clearly you have quite the disdain for Dave and his methods, tho you seem quite unfamiliar with what he actually teaches.
>>Budgeting is a huge part of succeeding financially that very few actually do. >>Failing to… ya know, actually save and invest. Yeah, that could be a problem, too.
>>Taking your investing advice from the evening news, not good. That Jim Cramer is going to keel over from a heart-attack one of these days, and theres a reason for that.
>>Having an entrepreneurial mindset is great and definately can be a way to get ahead.

Now where we differ is that you’re so intent on spreading these myths and half-truths when it comes to credit cards, debt, and worshiping your FICO score. Especially, having people in debt starting to invest. They have effectively borrowed money to invest with. If you’re slow on the uptake, then let me put it this way: Would you borrow against your car / cash advance on a CC with which to invest for retirement? Well, no, you wouldn’t. But starting to invest while still in consumer debt is effectively the same and just as bad of a move. You bring some fresh thinking to the table, but then a certain amount is just the crap that CC companies want you to believe, and what your broke finance prof said.

While many find inspiration in the energy and brashness of your youth (and btw, I don’t think we differ too much in age), thats great. Something has to snap people out of it. The flat out problem is the lack of experience and knowledge. Not that you’ve ever claimed it, but its not a proven plan. People are free to continue reading it, but they need to know the truth.

22. ##### Ramit Sethi

debt-free: I’m not going to call you names and put words in your mouth.

For everybody else: If you think debt-free is right and I’m spreading half-truths that the CC companies want me to say, then you can stop reading this blog right now. But if you do think that my philosophies and practical advice on personal finance are valuable, keep reading. My table of contents points to the hundreds of articles I’ve written: IWillTeachYouToBeRich Table of Contents.

That’s it!

23. ##### Michael Squier

While I agree with much of Dave Ramsey’s premise, it’s not god-sent as Debt-free would have you believe. There is no one way to financial freedom, there are many. It takes budgeting, investing, maintaining a strong Fico score, and so on. There are thousands of componets to becoming “rich”. Liv and Camile, you can absolutely be helped. Don’t give up hope. There are programs built for folks in your specific situation. Send me an email and we can talk furhter. It’s not a problem that can be solved over a post, or in a 30 second phone call that Debt-free will have you make. By the way Debt-free, follow the money. Ramit is not selling a thing on this blog. Can you say the same for Dave Ramsey’s website? Who has their readers best interest in mind?

24. ##### thrillhouse

oh, mister squier. Thats an interesting phrase: God-sent. Did you know that there are hundreds of verses in the bible about money, personal finance, and stewardship. Well, it just so happens that a lot of what Dave Ramsey teaches is based on those verses. So yeah, it kinda is ‘God-sent’.

As for calling Dave’s show, well the calls last a lot longer than 30 sec, but thats besides the point. No, he won’t instantly cure all ills, but what Dave will do durring that brief phone call is walk with them and help clear thru the clutter and myths and point them in the right direction. He does so with things like, facts, experience, and a little bit of spirituality. He’ll help them connect with local professionals who will help with all the fine details. You’ve never listened to his show, have you?

Follow the money, huh? Well, Ramit *is* infact using the site to sell his 1-hour class as well as speaking engagements. So your statement isn’t exactly true, now is it. No, Ramit isn’t selling a book (yet) or a comprehensive personal finance program. Because he doesn’t have one. If and when he does, I assure you he will be selling it here. And there’s really nothing wrong with that. Its called free-enterprise. Yeah, Dave is selling products. Because he has products to sell. Ones that are in demand, because they work. And while it seems that Ramit has the best of intentions with what he’s trying to do here, how can you use that to say that he has the readers best interest in mind more so than Dave? Besides being a consumer advocate, besides researching and backing up everything with facts, he gives his products and his advice away for free every single day. You have no idea, but it is fun to shoot from the hip, isn’t it?

25. ##### debt-free

Liv-
If you’re still here, I’ll offer this:
You said its a judgement for \$9k from a hospital bill. Did you actually get sued and go to court, and lose (which is pretty automatic if you owe the bill and did not pay)? Or has it not gone that far? If it has gone thru the courts then I’m not sure if you have any options – a lawyer would know. If it has not gone that far, then you need to go down to the hospital’s business office and speak with the manager, in-person, hat in hand. Calmly sit down and discuss the matter. If its a matter of overbilling or incorrect billing, then show them why and discuss options. If you owe that amount and cannot pay, then dicuss settling for a lower amount that you can pay (lump sum or payments). usually they will work with you as some money is better than none.

If you legitemately owe the money and have it then just pay it. But if you cannot for whatever reason, then be prepared to discuss and show that. Depending upon where this whole mess stands, you may need to speak with an attorney – I’m not one. But they’ll know how to handle it, plus they are familiar with your local laws.

How much will it hurt you? Well if they have not already, then I’m pretty sure that they will come after you for the money. Even if it has gone thru the courts, its not a bad idea to try to work out a lower settlement. All of this is assuming that you don’t have the money. I hope that helps.

26. ##### Jonathan

God-sent financial advice? Haha. I distrust those people who know so well what God wants them to do because I notice it always coincides with their own desires.

I just stumbled upon this. It seems to me that both Dave and Ramit give good advice. What’s sad is people coming to another blog and insulting it. Find something better to do.

27. ##### Albert Dziennik, Jr.

It’s been my experience that the fico (fair isaac corp) model is flawed and unreliable to a degree which doesn’t really allow some to improve their scores at all. What’s more fico is in the process of changing their formula because of the same flaws. Only problem is, who’s to say whether the new improved version will be any better. The real issue is the fico doesn’t allow for real human conditions that occur in one’s life such as illness, etc. The fico formula for calculating scores is based on the assumption that people are or can be perfect. Not so as we all know. I rail against creditors using fico to determine credit worthiness at all. It’s a flawed system which carries too much weight and should be outlawed by constitutional congress. There should be a constitutional ammendment to ban and prohibit fico from even existing. It’s discriminatory in a way that is inhumane.

28. ##### Jeremy

Is it true to checking your credit history will lower your score? I’ve heard this from a few people, but I can’t find any information on it.

29. ##### E Johnson

Hello Mr. Squire,

I am very conscious about my credit score because I don’t make a lot of money and I need my credit to maintain things around the house, the cars etc. I do pay my bills on time, but I do have balnaces on my credit cards. That is excellent advice, don’t spend more than you can pay back within that month. I always wait until the bill comes in to pay. Anymore advice on how much your score increases when you pay your credit cards?

30. ##### Cynthia

Hi! I just got a copy of my credit report and there are a few closed accounts with no balances that are over 7-10 years old. Can those items be disputed and removed and thereby raise my fico score? Thanks!

31. ##### Bilal Khan

I have also closed a few accounts in the past 2-3 years and only have one account open as of present. I am at a 60% balance on that card and should have it paid off within the next 4-5 months. After the debt is paid off completely i know i will notice a jump in my credit score, but how negatively will the closed accounts hurt me. And for how long? my current score is a 676

32. ##### John W

Lots of discussion.

Couple things on the main post. “Pay on time”, actually it has been shown that if you pay early (like when you receive the statement) this will improve your rating.
Maintaining 40% is good too. The rule of thumb I’ve been given is to keep it below 75%. By below, I mean NEVER go above 75%.

The longer you keep your credit card the better, but this is only a small portion of the total. 20 year old card is much better than 6 mo, but only slightly as far as the overall score is concerned.

Being a mortgage broker, I can attest, that no credit (like a married woman who has always used her husbands cards and applies for a personal loan) is much more difficult than someone who is 2 years out of bankruptcy. From the lending point of view it’s “ok you have made a big mistake, we’ll lend you at higher rates” vs “who are you? You don’t exist, therefore we can’t lend to you.”

33. ##### Nicole Smith

I was wondering, I am in the process of trying to purchase a home. And my credit is not good at all. I feel bad, because my husband has good credit, but he doesnt make enough money to have the loan in his name only, they have to use my income, I was wondering if I pay off some of the debt that I have in collections, will that help my credit score, and can the collection agency send something to the credit bureaus asking that the item be removed, or paid off. I am willing to settle at least 7 accounts, but no need to do this if it is not going to help me credit score. please give me some advice here.
thanks

34. ##### Terry

My scores went in the tank several years ago (extended illness with neurological complications, in hosp two mo, unable to work for 18 mo, no income and unable to pay rent, had to relocate to live with family until I could work again.

Got a minimum wage job, can pay the rent on time, keep food on the table, and make a partial but negatively-amortizing payment on student loans.

I cannot get my credit out of the tank on that income.

Some outfit has bought up (at a steep discount no doubt) several of my charged off accounts and is not suing me to collect the largest debt. Undoubtedly they will follow up with each other debt in descenting order.

Any suggestions?

35. ##### Terry

Er, they are NOW suing me!

Sloppy sloppy sloppy!

36. ##### Terry

Actually, they are now dunning me for two small debt, so the “descending amount of debt” theory appears to be blown.

It’s cost me \$200 just to respond to their lawsuit and get my day in court (not yet scheduled). Perhaps they will bankrupt me.

37. ##### Forrest Gump

My FICO is 579 as of yesterday. If I pay off my 1,100.00 credit card balance, will that positively affect my FICO score? Yes, I realise there are other factors (ie: do you have collection accounts, etc).

38. ##### Forrest Gump

What do landlords usually use as an average FICO score to grant leases? I can’t find any information on this — I know each has their own criteria, but there must be some standards out there.

39. ##### Scott

I just got my credit report back, and its low. How can I bring up my score, if I am wanting to buy a house in 6 months?

40. ##### JasOn B.

That’s kind of childish how Dave comes over here and tries to bully you you in front of everybody to pull in more customers…utterly doltish.
I am only 21 but my credit score is a 729 right now. I’d like to think I have it because of healthy credit decisions but I just figure out how much I can spend and stick to it. I use my credit card for all my bills because I know almost exactly what they are each month and then 10 days later I pay it off with my checking. This way I earn rewards point s all the time and I have emergency money outside of my savings. I impulse buy occasionally but I save more than enough to cover it without negating my savings for that year. I do need to start investing though maybe after my savings breaks 15K.

41. ##### John Duncan

I have been reading this BLOG and am very familiar with Dave Ramsey.

I am a fan of Ramsey. His advice to spend within your limits and avoid debt is fundamentaly sound. I am not religious, so that does not impact my decisions.

Having said that I also understand some folks just flat out do not agree with being debt-free for whatever reason. This Blog does give some good advice to managing within the debt system and understanding how it works. The beauty of the internet is we can hear from all sides.

42. ##### Bob

Since this seems to be a true confessions board, I am debt free except for my mortgage, which is fixed at 5.5%. My FICO score is 811. I have an MBA in Finance.

Dave Ramsey’s advice is generally good, although I feel his obsession with debt has more to do with his past bankruptcy than it does with debt as a weapon. Dave admits that he was over leveraged in investment real estate, which is speculative. That’s not the best use of debt.

On the other hand, debt can be valuable if it is used to buy appreciating assets where the cost of capital is fixed and the return is reasonably assured. It is not risk free, but some risks make sense.

As others have said, it pays to have more than one teacher. It also pays to apply a little common sense. Don’t spend more than you have, recognize that debt has a cost attached to it, live within your means, save a percentage of what you make, understand the relationship between risk and return, etc. If so, you’ll be fine.

43. ##### Smart one

Hello, I have a 623 credit score. I also have a judgement from December 2000 on my report that was satisfied- paid in full. Can ou please tell me how much will m credit score increase once the judgement is removed in December 2007? Thank you.

45. ##### Jack

The most important key is to not have any negative items on your report. Late payments are a big no-no. It so much easier for your score to drop in a matter of days, but it takes months to bring it back up. Making the minimum monthly payment is all it takes to count for as an on-time payment. It’s not so hard guys. What’s interesting on the Equifax Report is that even if I carry a balance of \$1 out of a total limit of \$5000, it shows up as a balance hurting my score. Only when the balance for a month shows up as 0, it doesn’t show as something tha’ts hurting your score. I find this really weird. I’m a foreign student, I’ve had credit for only 14 months now, my FICO score is stuck on EQ 734, EX 723, TU 703. It says that when i have 3 years or more, that my score will steadily increase, as I have a short history. I have all the major credit cards. Just dont spend what you dont have, that’s the key.

46. ##### Jack

For those people who think that if you make a big purchase on one day and paying that whole amount the next day, has no impact on your credit score whatsoever. It only shows as a high credit on your report. The balance on your closing date of your credit card is what shows up on the credit bureaus, that’s all that matters. For example if your closing date for a particular CC is on the 19th of the month, make sure that your balance is less than 7% by the 17th of the month, and don’t use that card till after the 19th. Whatever your balance is on 19th is what’s going to show on your credit report and thats calculated against your credit limit for the card as available credit or debt to credit ratio. This balance also adds to your other balances on your other open accounts and is weighed against the credit limits of all your cards. for your score to go up you need to have this balance less than 7% of your total limit. for the highest score possible, just keep your balance as 0 on your closing dates.
NO, you do not have to show balances on your report, to prove to the credit bureaus that you are using your card. To work around this, keep your balances high for 5 to 6 months, (DO THIS ONLY IF YOU HAVE THE MONEY TO PAY IT OFF). and then after 6 months just keep your balances at 7% or less, if possible.
Don’t open more than 6 credit cards in your life time. No, having 20 credit cards on your report wont hurt you score, but damn if you can manage 20 cards without putting yourself in debt, go ahead. 6 cards are maximum, I would recommend.
AMEX, Discover, Visa, Mastercard are the 4 which are a must, and then maybe a Travel card from one of those companies and a gas card. NEVER close your CC accounts. if you have 40 years of history on a card, if you close it, its all GONE in seconds. this is very very important. for those purchasing a home, make sure your credit is rid of negative reports, for best interest deals, and try and clear your balances 6 months to 12 months before you decide to get that mortgage. That’s what lenders like to see a long established history of on time payments, a score about 730(not required)..and a nice clean clean report, rid of judgments, liens, bankruptcies ( very bad) and foreclosures.
Hope this helps!

47. ##### Jonathan

i am fairly sure my FICO scores must be realy high, even though i haven’t checked them in a long time (I resent having to pay a company to know basic information about me). Anyway, since I have no debt and never carry balances on my credit cards, and actually pay them off several times a month, and have thousands of dollars in available credit, and they keep upping my limits, well I must be in good shape.

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