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Doesn't getting dinged quell the app itch?

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Open123
Super Contributor

Re: Doesn't getting dinged quell the app itch?


@clocktick wrote:

I "deal" with it knowing it's temporary.  I know the CLIs will have positive effects immediately and in the longrun.  New cards will too, for utilization.  I've seen my scores fluctuate before so 5 points doesn't really bother me.


In my estimation, when building or rebuilding (especially since inquiries aren't that meaningful), the sooner one "plants" positive tradelines, the sooner and thicker the credit profile associated will become.  

 

Having positive tradelines is just a fundamental building block of having a "good" credit profile.  A 750 with 10 positive and timely paid tradelines is infinitely more meaningful than the same score with 1 or 2 boasting a pair $1K toy limit.  The reason being is that unless one is using the credit score for automated approvals, a manual review which is required for any kind of substantial loan (mortgage, auto, business financing) will require a mandatory review of what's inside the 750 surface score.  So, the sooner one is able to have positive tradelines, the better off and more substance one's credit profile becomes with a given score.

 

For instance, you could have an 850 Fico made up of a pair of 30 year old TLs with $1K limit each with an income of $15/year and will be denied for any kind of substantial loan.  Heck, this profile would even be denied any Visa Sig card since one of the requirements is a minimum open CL of $5K for "x" amount of years.

 

In my view, one is far better off being bold and starting some good TLs asap.  The inquiries no longer affect scores in 12 months, and will be gone from your report in 24; but, the TLs will last a lifetime.

 

 

Message 21 of 30
daveg38
Established Contributor

Re: Doesn't getting dinged quell the app itch?

If you have a BarclayCard and get the 'app itch' too soon, they will whack your card quick, fast and in a hurry.  That would be enough, I guess, to make me quit apping..

Ch7 Discharge: 5/14/2016 | Target RedCard $900 | Merrick DYL $500
Message 22 of 30
tinuviel
Moderator Emeritus

Re: Doesn't getting dinged quell the app itch?

If you're building or rebuilding, it's a catch-22. You have to app to get new credit, and getting new credit will ding your scores.

 

I opened several new accounts during the period encompassing the fall of 2010 and spring of 2011. I knew that some old, closed accounts with less than stellar history would age off during that time. I wanted to have some new accounts with fresh history to take their place. But, I've been sitting back and gardening these accounts. The inqs from these accounts are now at least a year old and are not being factored into my scores, and many of them will fall of altogether by the end of the year.  So, as clocktick pointed out, it's a matter of being willing to take a temporary hit for long term gain.

 

But the ding definitely helps to keep me in the garden. Everytime I get an offer for something that I don't really need -- especially store cards -- I'm mindful that the attempt will cost me points. And an approval will compound the ding by lowering my AAoA. So, my approach has been to identify cards that I do want to app for when my credit profile reaches a certain point, and hold off on any apps until then. There's a huge difference between strategic apping for long term gain and apping based upon impulse.


Current Scores: EQ 775 (03/04/2014), EX 756 (03/01/2014), TU 760 (03/01/2014)
Ruby Spade Garden Club Member - Last App: 03/04/2013 - No apps until 2014
Cards: Cap1 Venture 6.4k, Cap1 Quicksilver MC 1.75k, BankAmericard 1-2-3 Visa Signature - UCF Alumni Association 5k, Discover 7k, Citi Diamond Preferred MC 10.35k, Wells Fargo Rewards Visa 7k, Chase Freedom 5k, Chase Ink 7.5k, Amex Green NPSL, Dillard's Amex 7.5k, JC Penney 7.5k, Kay Jeweler's 5.1k
Message 23 of 30
tinuviel
Moderator Emeritus

Re: Doesn't getting dinged quell the app itch?


@Open123 wrote:

@clocktick wrote:

I "deal" with it knowing it's temporary.  I know the CLIs will have positive effects immediately and in the longrun.  New cards will too, for utilization.  I've seen my scores fluctuate before so 5 points doesn't really bother me.


In my estimation, when building or rebuilding (especially since inquiries aren't that meaningful), the sooner one "plants" positive tradelines, the sooner and thicker the credit profile associated will become.  

 

Having positive tradelines is just a fundamental building block of having a "good" credit profile.  A 750 with 10 positive and timely paid tradelines is infinitely more meaningful than the same score with 1 or 2 boasting a pair $1K toy limit.  The reason being is that unless one is using the credit score for automated approvals, a manual review which is required for any kind of substantial loan (mortgage, auto, business financing) will require a mandatory review of what's inside the 750 surface score.  So, the sooner one is able to have positive tradelines, the better off and more substance one's credit profile becomes with a given score.

 

For instance, you could have an 850 Fico made up of a pair of 30 year old TLs with $1K limit each with an income of $15/year and will be denied for any kind of substantial loan.  Heck, this profile would even be denied any Visa Sig card since one of the requirements is a minimum open CL of $5K for "x" amount of years.

 

In my view, one is far better off being bold and starting some good TLs asap.  The inquiries no longer affect scores in 12 months, and will be gone from your report in 24; but, the TLs will last a lifetime.

 

 


 

I agree with what you've said here. Very well stated.

 

I'd only like to point out that opening a bunch of new accounts to establish or reestablish credit is quite different from constantly opening and closing accounts year after year. It's one thing to plant a garden and then sit back and watch it grow, perhaps sowing a new addition from time to time; it's another thing altogether to constantly plant, rip out, and then replant. Of course, it's perfectly ok to prune away those starter cards once they have served their purpose. But, getting the "hot card du jour," falling out of love with it after the initial thrill has passed, and then replacing it with the new card that everyone's talking about -- over and over again -- does not build a solid, stable credit profile.

 

Just wanted to throw that thought out there.


Current Scores: EQ 775 (03/04/2014), EX 756 (03/01/2014), TU 760 (03/01/2014)
Ruby Spade Garden Club Member - Last App: 03/04/2013 - No apps until 2014
Cards: Cap1 Venture 6.4k, Cap1 Quicksilver MC 1.75k, BankAmericard 1-2-3 Visa Signature - UCF Alumni Association 5k, Discover 7k, Citi Diamond Preferred MC 10.35k, Wells Fargo Rewards Visa 7k, Chase Freedom 5k, Chase Ink 7.5k, Amex Green NPSL, Dillard's Amex 7.5k, JC Penney 7.5k, Kay Jeweler's 5.1k
Message 24 of 30
Open123
Super Contributor

Re: Doesn't getting dinged quell the app itch?


@tinuviel wrote:
But, getting the "hot card du jour," falling out of love with it after the initial thrill has passed, and then replacing it with the new card that everyone's talking about -- over and over again -- does not build a solid, stable credit profile.

Couldn't agree with you more.

 

Credit card churning and arbitrage for sign-up bonuses are best for those with a mature credit profile who aren't seeking any loans in the next couple of years. Aside from deriving benefits, there is no reason for anyone with a mature credit file (with ample LOCs and CLs) to ever open up a new TL or seek a loan.

 

However, if one were building credit "today," the only difference would be to avoid those cards with an annual fee that you know will be closed before it becomes due. If I were rebuilding or building today, I would try to have "no fee" cards with BofA, Chase, Citi, and Discover.  My fee card would be an AmEx.  I'd spend the next couple of years building (by using and paying the cards) my relationship with each lender.

 

Then, every 6 months, I'd see if there's anything compelling for perks.  In several years, I'd have my 10, and can then purge whenever necessary.  In my view, this is much better than being too conservative gardening 2 years for the toy limit starter card leaving a bunch of $1K TLs.  The builder or rebuilder needs to be mindful to avoid the trap of "toy" limit cards, often referred to as "toy limit hell," where no issuer will ever offer beyond your avg CLs.

 

It's only my opinion, but I really do think most will be better served by being bolder and more aggressive in their building/rebuilding.  I certainly don't mean foolhardy, but prudent risk will always gain you more than waiting and hoping it'll come.

 

PS - When I was rebuilding, I wanted to bunch my inquiries so they'd all fall off at the same time.  The risk was well worth it because a year later, the inquiries no longer affected my score, and I had 5 TLs.  After a year of using and paying, I'd ask each lender to raise my CL.  If refused, I'd close it.  Most of them were then privy to my having other options, and each would raise my CL accordingly competing for my business.  This was some time ago, but I'd imagine the same principles would work today. I hope some building and rebuilding would follow this blueprint, since I know first hand how much more effective this approach is when compared to the "wait, see, and pray" timid approach.  You're the customer--be in a position to FR and fire them.  

 

PS 2 - The reason to start with "no fee" cards is because one doesn't want to close the oldest TLs, unless it's an Amex since the fee doesn't matter, since you can close it apping for a no fee card with the backdating feature.  Always apply for annual fee cards later, since you then have the option of closing them without adversely affecting your AAOA.  In 10 years when it falls off, the old TLs are all in place where closing the cards would have a minimal effect on aaoa.  Your score increased even more by adding a new amex revolver every January.  With AmEx backdating, new account's effects on aaoa can always be neutralized very effectively.

Message 25 of 30
bichonmom
Senior Contributor

Re: Doesn't getting dinged quell the app itch?

Lots of good replies. ITA Open and Tinuviel. In the last year, I have opened many new accts because I am rebuilding and did not want to be stuck w/toy-limit CCs (e.g. Cap One) and cards w/AF (except for Amex). I only had one AF card w/Cap One, which I just closed this week and have made sure that the cards I've gotten don't have AFs.

 

Fortunately, I found this forum, or else I never would have known that my Cap Ones wouldn't go anywhere and would have spent a year or two nursing them, only to have wasted my time. Because of what I learned here, I added more cards periodically over the last year. I know if the long run, it will be better. But in the short run, the FICO sting definitely stops me from apping for more! Smiley Happy

 

EQ FICO 750 | TU FICO 761 (Walmart) | EX FAKO 767 | Goal: 800+

Edits, funky spacing and spelling due to my iPad not getting along with the forum editor!

Message 26 of 30
NikJ4
Established Contributor

Re: Doesn't getting dinged quell the app itch?


@LS2982 wrote:

@bichonmom wrote:

As glad as I am to have a Chase card in the mail, I'm really feeling the sting of losing 5 points on EQ (not including a potential drop when it reports). It seems like a lot of people here app for a lot of cards, so I'm curious about how you deal with the sting of your FICO dropping. Smiley Sad


Try getting about 30-40 pts for "seeking credit", you'll quit apping for awhile!!


I second that motion....

Message 27 of 30
NikJ4
Established Contributor

Re: Doesn't getting dinged quell the app itch?


@adavis425 wrote:

It's even worse when you get dinged for a denial.Smiley Frustrated


Ouch! That hurts. Its like putting alcohol on a burn! No Bueno!!!

Message 28 of 30
frogfan12
Established Contributor

Re: Doesn't getting dinged quell the app itch?


@daveg38 wrote:

If you have a BarclayCard and get the 'app itch' too soon, they will whack your card quick, fast and in a hurry.  That would be enough, I guess, to make me quit apping..


I think the Barclays CLD hype is overplayed on the forum. Since opening my Barclaycard, I have opened another 2-3 CC accounts. Not only have they not CLD'ed me nor closed my account, they offered me a BT good through next year on top of my current 0% interest rate on my existing balance. 


Starting Score: 760
Current Score: 716 Equifax 754 TU 736 Experian
Goal Score: 760
Message 29 of 30
mgs2010
Regular Contributor

Re: Doesn't getting dinged quell the app itch?

It's pretty much always been a negative contributor to my fico score ever since day 1. So, I really don't notice any difference. I'm always apping for stuff. Once you have so many, it doesn't seem like it matters if you throw on one more. One time i had so many on Equifax that they all purged.

Message 30 of 30
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