John Ulzheimer Answers Your Credit Questions

John Ulzheimer is a nationally recognized credit expert and contributor to On the Money. Learn more at or

Q. I 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

A. 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.

Q. 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

A. 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.”

Q. Hi John -

First and foremost, I wanted to say thank you for responding to my question. Thank you for the advice and suggestion.

I do have a concern though, I have already applied and got approved for an American Express Gold Rewards Card (which is a charge card with no pre-set spending limit). You have recommended that I apply for a Visa or a Mastercard and feel somewhat bad that I already applied for the AMEX already.

What should I do next? Do you recommend that I apply for another card later down the road in 6 months or so (like a Visa or Mastercard). Will this activity hurt or help my credit score?

Thank you very much for your time in advance John. Looking forward to hearing from you. --Landon, CA

Posted on: 07 Aug 2008 3:11 P.M.

A. My pleasure Landon. I'm happy to help.

Don't panic, you didn't break anything by opening an Amex. I love Amex, but they charge an annual fee for that card ($125 after the first year) and it won't be accepted 100% of the time by 100% of the merchants.

That's the only reason I suggested Visa or MasterCard. The challenge with an Amex that doesn't have a true spending limit (which is a myth, by the way) is that the account will tend to confuse credit scores. The value of having an account with a real live credit limit is that when it's reported to the credit bureaus it's very easy for the credit scoring models to see it, and measure your usage percentage.

Here's my suggestion...

Go ahead and open it, and use it sparingly. Remember, good accounts are always good for your scores!!

Here's my next suggestion...

In 6 months open a new Visa or MasterCard, and hope for the highest credit limit possible. Use it sparingly, pay it in full each month, and try to keep the usage to about 10% of the credit limit like you're doing now. And, 6 months the same thing.

Here's MY credit card strategy...

I have 6 credit cards; all open, all in good standing, and all paid off at the end of the month. The combined credit limits on all of my cards is $94,000. My usage percentage is always less than 10% because I never charge more than $9,400 in any given month. I also never have a balance on more than 2 of them at any time, but I use them ALL at least once per quarter.

Here's the proof in the pudding...

My lowest credit score is 807, my wife's best score is 830, which ties her for the highest score in Georgia...and no, that's not why I married her! --John U.

Posted on: 07 Aug 2008 3:54 P.M.

Hi John -

Thank you again for the suggestion. I will definitely take your advice into suggestion. As we speak, I just received my AMEX Gold Rewards card yesterday and learned that the first year they waived my annual fee.

I will open another account (possibly a Visa) 6 months down the road and repeat process for a few more times until I build a solid line of credit and credit history.

Thanks again for the wonderful help, and I am a big fan of On the Money. --Landon

Posted on: 11 Aug 2008 2:57 P.M.