How Much Credit

[CATCHMEIFYOUCAN]

How much credit does one really need? 1-2-3-4-5 Cards? I hear so many pros/cons of how many credit cards one should have to boost their scores. I also heard that if one were to buy a house its good that you owe on some debt. Something about debt to income ratio??? All this Credit Scoring/Fico Scoring is sooo crazy! If one were a millionair I guess scores wouldn't matter!

CMIYC

[FilingOnMyOwn]

Scores do matter, even if you are a millionaire. Even if you never have to borrow a penny for the rest of your life, insurance rates will still based on credit scores among other things. Having good credit will always be important until the day you die. Some of us like myself have way too many cards already, but in the long run the more credit history you have the better.

From the research I've done, you always want to have at least one account reporting payments on your credit reports, and 3 seems to be number most commonly suggested as a good number of accounts to have. Beyond that the benefit is little if any and perhaps a decline in scores once you have too much credit. Someday down the line when the rebuilding fever wears off for me, I'll have to cancel a few of my petty cards at once to see how it affects the scores.

[BassBoy]

The number of CC's is hard to say

How much credit does one really need? 1-2-3-4-5 Cards? I hear so many pros/cons of how many credit cards one should have to boost their scores. I also heard that if one were to buy a house its good that you owe on some debt. Something about debt to income ratio??? All this Credit Scoring/Fico Scoring is sooo crazy! If one were a millionair I guess scores wouldn't matter!

CMIYC

IMO, I don't believe that there is a "set" number of CC's one needs for rebuilding. But as FOMO says, your credit is used for more than just CC's and loans. On the other hand, I wouldn't get more credit than one can handle. If all you can manage is one CC, then one CC it is. If you can manage two CC's, then two CC's it is. And so on and so forth. Just remember to stay within your means.

[jal1129]

For mortgage purposes I have been told in the past its best to have at least 2 cards, charged to not more then 1/3 of the credit line.

[bige1030]

In terms of credit, credit cards aren't the only game in town. It's good to also have a positive history with installment loans, as well. There are several good ways to get started here, as well:

Student loans are a good way to start if you're in your last semester of school - so that repayment actually will have an impact on your credit report. Also, for all federal student loans but the PLUS loans, no credit check or income is required. When you go into repayment, you have several repayment plans.

If you need a car, buying it on an installment plan is good to re-establish your credit. If you do this right after discharge, though, you really have to consider whether the cost is worth it, though. Waiting a few months while you re-establish with credit cards may help you qualify for lower interest rates.

If you can keep some money in the bank for a while, another good installment loan to rebuild with is a secured personal loan. Just deposit as much as you want to borrow into a CD (or sometimes savings account) and pay in installments. You're more likely to get this at a credit union than at a bank, though. One more thing: make sure that they don't report as secured.