Your credit score takes into account the “mix” of credit items you have on your report. This part of the credit score is affected by what kinds of accounts you have and how many of each. The bureaus will score you higher if you have an open mortgage, 3 credit cards, 1 auto loan, and a small amount of other open accounts.
If you have a ton of credit cards, your scores will be lowered. If you have several mortgages, your scores will be lower. Any “unhealthy” account mixes lower your scores. The preferred number of credit cards is three. This means you will actually have a higher credit score if you have three open credit cards than if you have more or less than three open.
This does not mean that you need to run out and cancel your cards just yet. Remember, 30% of your score is comprised of your balances in relation to your high credit limit. So insure you keep your cards open, but focus on having three large balance cards for maximum impact. Also insure you know to maintain a healthy mix of accounts and this aspect of your credit score will be golden.
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