Core Insights - Canceling credit cards can negatively impact credit scores due to factors such as credit history length, credit mix, and credit utilization ratio, which is the second-most important factor in credit scoring [1][4][8] - The average American carries approximately 3.7 credit cards, with nearly 75% using credit cards for shopping, indicating a widespread reliance on this payment method [3][4] Impact of Canceling Credit Cards - Canceling a credit card shortens credit history and alters credit mix, both of which are significant factors in credit scoring [1][4] - The credit utilization ratio increases when a card is canceled, as the available credit decreases while the amount used remains the same, leading to a higher utilization ratio [1][4] - Payment history, which accounts for 35% of the credit score, is also affected by canceling a card, as it may result in the loss of positive payment history [1][4] Considerations for Canceling Cards - It may be justified to cancel credit cards if managing multiple cards leads to late payments or if cards have annual fees that are not worth the cost [6][7] - Keeping cards without annual fees or those that are the oldest can be beneficial for maintaining a good credit score [7][8] - A strategic approach to canceling cards, such as focusing on those with annual fees or lower credit limits, can help mitigate the impact on credit scores [10][11] Recommendations for Managing Credit Cards - Gradually canceling unnecessary cards rather than all at once can limit the negative impact on credit scores [11][12] - Maintaining a manageable number of credit cards, ideally around three to four, allows for the benefits of rewards programs without overwhelming management [12][13] - Regularly redeeming rewards and using card perks can justify keeping multiple cards, but excessive cards can lead to difficulties in tracking payments [13]

Joining us this morning in an exclusive interview is FHFA director Bill Py. Director, welcome back. Good to see you. Thank you.Good to see you always, Carl. We had Will on yesterday. We thought he might sort of fudge the motivation for this move, but he did attribute it directly to your posts.Well, either that or he doesn't want to look like the bad guy. He wants somebody else to look like the bad guy. But look, I appreciate it.No matter what, I think it's a big win for the American people. And this is just ...

Shares of FICO score provider Fair Isaac are surging while credit bureaus are seeing some pressure pretty much across the board. Diana Ollex here with more on what's driving the move. Morning Diana. >> Good morning, Carl.Yeah, FICO, which is the credit score that decides if you and I qualify for mortgages and at what interest rate, is now licensing its scores directly to lenders instead of going through the credit bureaus like TransUnion, Equifax, and Experian. And those bureaus are the middlemen. They char ...

Insurance Industry Focus - Credit score is more important than climate disaster risk for home insurers [1]

Market Access & Competition - The Federal Housing Finance Agency (FHFA) will allow the use of Vantage Score for mortgages sold to Fannie Mae and Freddie Mac, aiming to increase competition in the credit score market [1] - Vantage Score includes 33 million more consumers compared to its competitor [3] - Over 3,700 banks, FinTech companies, credit unions, and government agencies currently use Vantage Score [14] - Vantage Score was previously excluded from the mortgage market due to an unintended monopoly [14] Vantage Score Advantages - Vantage Score incorporates alternative data, such as rental payment history, which is not considered by its competitor [5][6] - Vantage Score utilizes innovative and new analytics techniques [7] - Major banks like Bank of America and Chase have found Vantage Score to be better, leading to increased access to credit and lower risk for lenders [15] Impact on Home Buyers - Approximately 490 万 (4.9 million) consumers with a Vantage Score of 620 or above, who previously lacked a credit score with the competitor, may now be mortgage eligible [9][10] - This change could potentially unlock $1 trillion in incremental mortgages in the United States [10] - Owning a home is considered a key pathway to economic prosperity [12]

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Your credit card limit is the maximum amount you can borrow at a time. Increasing your limit could potentially increase your spending power and also help improve your credit score by lowering your credit utilization rate — the percentage of your available credit that you're using at a given time. After your account has been open for at least a few months, you can technically request a credit limit increase at any time. But if you want to maximize your odds of getting approved, there are certain factors to ...