New to this board. Need CC advise

[BluePoodle]

Sorry if this post is long..but here is a little history about myself.

I had low credit scores back in 2005, mostly just do to late pays. So I hadn't really applied to credit since then. I paid for everything with cash.

So back in 2012, my parents helped me out and took out a small loan for me for some personal things. (Paid off this March) Only about $2,500 and I had them put me on their loan as co-signer to have some recent credit history. At that time by credit score (HP from Credit Union) was 640 from Equifax.

Then my credit started improving and I took out a small loan with ungodly interest rates, again just to help my credit score. (Paid off in March)  I subscribed to this site for a few months to do a credit watch and am slowly doing better.

I secured a Cap1 Card over a year ago with a starting CL of $750 and then was given a CLI of $3000 last October.  I got a Discover IT just this Jan for $2000. Both were without Annual fees.  I called Cap1 yesterday and asked them to switch my Cap1 over to the Quicksilver because they had sent me a QS application and I did not see a need to have two cards from them. They switched me, no problem!

So here is my question, I see so many people with many cards here on this board. And I am not sure why? I realize have more credit helps your utilization %, so I get that. But why not just increase the limits on the card you have?  I am debating getting a 3rd card and really see it as the final card I would request. And even then I am debating on that card for another year before I apply.  I also did a Cap1 request last night to increase my cl again. I got the 7-10 response, so I might not even get the CLI but I thought after reading on here that it is not a HP, that I had nothing to loose.

Any suggestions on if I am going about this correct or if I could do more to not only increase my CL but my Credit score?  Oh, my first discover statement FICO was 690 and this month my Discover FICO was 701! I would really like to get into the 700 on all of my scores but have not done a check yet as to what they are.  

I want to purchase a vehicle later this summer, not sure of if I want new or used but I need one for myself and will help my daughter get her first vehicle too. So having the best rates for auto loans is my current priority. And then perhaps within a year, a house purchase but I am not sure about that.  I would like to get a total of about $10,000 in credit card limit.

Any thoughts or suggestions would be welcome.

Thank you!

[Twas_Sovereign]

I would look at getting a Chase Freedom added to your collection. I think you would have no issues getting accepted and the rewards are pretty good.As far as people having many credit cards, it's to take advantage of signup bonuses, cashback, and 5% rewards on different rotating categories. 

[Gunnar419]

Greetings and congrats on your good work.

Some people here have lots of credit cards because they're just credit card fans (and some are credit app junkies). Others have lots of cards because they're big spenders whose needs are varied. They want individual cards that are best for their business, best for their travel, best for their everyday purchases, etc. They want to collect sign-up bonuses or reward points, too.

For scoring purposes, you don't need to have a lot of cards. Generally people say three is the minimum for strong scoring, but there are people in the high 700s who only have two.

High CLs can help, mostly by helping to keep utilization low as you note and of course to encourage other card issuers to give you high limits. But unless you're a big spender or a rewards collector, you don't need a lot of cards.

[WillTeasle]

The perks are a big reason for multiple cards.  Beyond that, there is a limit to how much you can easily increase your CL on a given card (which depends on countless variables).  To some extent it's easier to increase your CL with new TLs, which would obviously help UTL as you mentioned.

Also add in the impact on AAoA.  If you open multiple cards you plan on keeping for a while, they will help your AAoA over time.  Plus, if you have 4+ accounts with long (and good) history, the impact of opening up a new TL is diminished as one new account will have a lesser impact on the overall AAoA.

Finally, showing creditors you can handle 5+ accounts with no issues gives them more confidence than say only managing 1-2 accounts.  If you have 20 accounts in good standing, it's not as risky to assume that you can handle the 21st.  Much harder to make that call when going from 2 accounts to 3.

Keep in mind, a lot of this depends on your comfort level as well.  If you don't think you can reasonably handle 5+ accounts, don't go that route.  Managing many accounts can be tricky, and the result of a baddie from mismanaging one account will have a far bigger negative impact than the positive boost from adding an account that you keep in good standing.

[BluePoodle]

From a strategic point of improving your credit score, what then is the best game plan?  Three cards? Oviously low utilization % and since I just applied for the Discover It in Jan, how long do you wait for another card.  I have seen people apply to many in a short period of time here on the board and then some who wait 3, 6 or 12 months.  I waited about 12 months before I applied for another CC from my first.  

I am more concerned about getting/keeping my scores low in the short term so as to get a good rate in the next few months when I car shop. So perhaps holding off on any CC apps is best when I will be have HP's for auto rate???

But since I only know my FICO score from my Discover card, I want to do whatever I can to help improve my score for my auto loan.

[Uppingmyscore]

My reason for having multiple cards is to diversify my selection and for cash back rewards. I lived in a cash only world besides for a few store cards for about 10 years then purchased my home last year and everything changed. I went from having only Capital One to having Discover, Amex BCE, Amex Blue Sky to getting the Freedom today. If anything breaks down in my home I want to be covered and having one major CC isn't going to do it.

I say go for the Freedom that would be a go rotation with your Discover It card. Otherwise just having those two cards you have is good too.

[BluePoodle]

Thank you everyone for your replies.

Was wondering if anyone had a response from my post above ^^

[TheClub]

I would work on improving my scores (at least a 720) and then go on an app spree (if necessary) that way you get better APR's and credit limits in the event that you are approved.

This has personally worked for me however. YMMV.

Good luck with whatever is it that you decide to do and welcome to the forums.

[TheClub]

Also, age your credit cards, pay in full and stay away from taking out more loans, especially with high interest rates.

Focus on low utilization and AAOA for now.