How many credit cards should I have and what should my limits be for the best possible credit score? I currently have three credit cards. I use one or two of them for routine purchases throughout the month, but I pay them off when the bill arrives and do not carry a balance. The issuers periodically send me letters saying they’ve raised my credit limit. I now have way more credit than I really want or need, but I am also confident that I won’t abuse it either.
I’ve heard that the FICO score is partially based on your number of credit cards, the ratio of the balance to credit limit and maybe the ratio of total balance to income. In my case, I may charge up to 25% of my net monthly income, but always pay it off at the end of the month. The total credit limit across all three cards is about 35% of my net annual income.
Given the above, how can I determine how my credit limits should be set for the optimal FICO score?
Original text: Determining the right credit limit for optimal FICO score?