John Ulzheimer Answers Your Credit Questions
Tuesday, 5th Aug, 2008I want to know if you have several credit cards in good standing with the same credit card company, will it hurt your credit rating if you combine them? How will it show up on your credit report? --Lynda
I have a short and a long answer for you.
Short answer... no, no, no, no, no. Don’t do it.
Longer answer: As they say in the south, "if it ain’t broke don’t fix it." If you ask your credit card lender to combine all of those cards it’s less likely that you’ll have the same amount of available credit as you did beforehand. That can hurt your score.
They can choose to show all of those other accounts as being “closed”, which isn’t really a big deal for your score. But, other lenders might consider that against you the next time you apply for credit.
I am very interested in raising and increasing my credit score to upper 800’s percentile. I recently checked my credit score with Experian and I scored at 747 as of June 2008. My ultimate goal is scoring upper 790 or 800 percentile. I don’t have any car payment or student loans. I have one debit and credit card through Wells Fargo bank and I only carry a small balance (less than 500 dollars each month) of credit card every month which I pay it in full at the end of the month. My credit limit is approximately around 10k and always keep my spending limit to less than 10%. The last time I checked my credit score was back in Nov. 2007 and the score remained the same until now.
How do I go about, what steps should I take or what should I do to help raise my credit score from 747 to upper 800 percentile. Should I open another credit card, e.g. like an American Express credit card or spend more by using my current credit card. I’m thinking about opening up another credit card to maximize my credit history and portfolio. Could you tell me what I should do and shouldn’t do? --Landon
Here’s the deal Landon; credit scores act like water. They are going to take the path of least resistance. What that means is you are more likely to damage your 747 instead of increasing it to 800 by trying ill-advised strategies to increase it.
You asked about spending more on your current card. Bad idea. That will send your score in the wrong direction.
I like that you’re keeping your usage to no more than 10% of the limit. Somebody has been reading a little Ulzheimer on the net, very nice. You know that nothing magical happens at 30% or 50% as some credit folks advise. 10% should continue to be your goal.
Now, I will tell you that opening another card might lower your score in the short term but if you can get one with a pretty sizable limit then it will eventually turn in your favor. I’d suggest a Visa or MasterCard…less likely you’ll get hit with an annual fee and you can use them everywhere. Get one that reports to all three credit bureaus or your solid management of the card will be less noticed.
And lastly, I want you to repeat after me…”I love my 747.”
Source: http://www.cnbc.com
