Next best type of CC?

[Cdnewmanpac]

Higher credit limits have no impact on scoring. The only way it can boost your score is by increasing the denominator in your utilization calculation. If you anticipate posting higher balances, than an additional card may help offset that. Honestly, opening an account to boost a 750 score that's only negative is age of accounts seems counterproductive, but to each his own. That being said, I would consider citi (giving you a relationship with three of the big 4) or a local cu (giving you a relationship that can help with future car, home and home equity loans).

[haulingthescoreup]

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@LS2982 wrote:

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@Anonymous wrote:

I'm looking to improve my credit scores. Currently I'm at 750 average on the three. I have one AMEX card and one Chase card. Doing research it seems 3-4 is the magical number of CCs.

So which is best for my next application? I was thinking a CU or Discover. I don't care about the benefits/APR/etc. Only interested in opening to improve my score. Which do you think will provide me with a higher credit limit? I'm only 21 YO with not much history. My current CL is only 7k so I think I should go for something that will net the highest CL

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Opening a new credit card is not going to increase your scores immediately. In fact you'll take a FICO ding for the new INQ and possible AAoA shortening.

With not much history, your AAoA could be affected enough to cause a drop in score. Can you list more details about your credit file? (# of accounts, INQ's, history of accounts, baddies)

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In fact, it's possible that OP won't see a drop by adding a card, since he only has two cards now. That third card can go either way in terms of immediate effect on scores.

Since the scoring formula "likes" to see 3 open revolving accounts, the increase from reaching three can cancel out the decrease from the INQ and AAoA change.

I've definitely read reports of immediate score increases when adding cards #1 and 2.

[LS2982]

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@haulingthescoreup wrote:

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@LS2982 wrote:

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@Anonymous wrote:

I'm looking to improve my credit scores. Currently I'm at 750 average on the three. I have one AMEX card and one Chase card. Doing research it seems 3-4 is the magical number of CCs.

So which is best for my next application? I was thinking a CU or Discover. I don't care about the benefits/APR/etc. Only interested in opening to improve my score. Which do you think will provide me with a higher credit limit? I'm only 21 YO with not much history. My current CL is only 7k so I think I should go for something that will net the highest CL

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Opening a new credit card is not going to increase your scores immediately. In fact you'll take a FICO ding for the new INQ and possible AAoA shortening.

With not much history, your AAoA could be affected enough to cause a drop in score. Can you list more details about your credit file? (# of accounts, INQ's, history of accounts, baddies)

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In fact, it's possible that OP won't see a drop by adding a card, since he only has two cards now. That third card can go either way in terms of immediate effect on scores.

Since the scoring formula "likes" to see 3 open revolving accounts, the increase from reaching three can cancel out the decrease from the INQ and AAoA change.

I've definitely read reports of immediate score increases when adding cards #1 and 2.

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This is true too. As always YMMV but with this being a 3rd card in the mix the negative effect may be minimal to none at all.

[aamex]

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@LS2982 wrote:

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@Anonymous wrote:

Hmm well I have those two CCs as well as one car loan. Have one inquiry on record, no negatives. Average age of accounts is 1.8 years

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If oyur looking at Discover they will more than likely pull EQ. How is your EQ file? (Based on the above info. I think you'll be fine getting it but the 1.8yr. AAoA is a little on the low side and might hurt you with a new account). You may want to garden for 6 months before trying it.

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Discover pulled TU for me. I'd check credit pulls database to see what it pulls for your state. But I agree with LS, you should garden. Plus, you have a car loan so thats good for your score as well. If you want higher limits try with the two you have first rather than taking a gamble at offsetting this, that and the other. Sound cliche but only apply for credit that you need. just MHO

[LS2982]

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@aamex wrote:

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@LS2982 wrote:

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@Anonymous wrote:

Hmm well I have those two CCs as well as one car loan. Have one inquiry on record, no negatives. Average age of accounts is 1.8 years

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If oyur looking at Discover they will more than likely pull EQ. How is your EQ file? (Based on the above info. I think you'll be fine getting it but the 1.8yr. AAoA is a little on the low side and might hurt you with a new account). You may want to garden for 6 months before trying it.

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Discover pulled TU for me. I'd check credit pulls database to see what it pulls for your state. But I agree with LS, you should garden. Plus, you have a car loan so thats good for your score as well. If you want higher limits try with the two you have first rather than taking a gamble at offsetting this, that and the other. Sound cliche but only apply for credit that you need. just MHO

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It is but it's the best advice to give to hammer it home to folks!!

[Anonymous]

What about people who PIF and always plan to PIF, and just use cards for the rewards, though?  Saying I should only apply for the credit I need is kind of silly, since I have never needed any credit.

I'm in a similar situation, with just a Chase, AMEX revolver (both opened in the past 6 months), and 7 years of history on a CU card I never use with a 1,000 CL.  EQ from myFICO was 760-something (one 30-day late).  To me, it almost makes sense to open more cards now, so that in a few years, AAoA will be fairly impenetrable, and I won't have to worry if a new rewards card comes out that I want (or one of my current rewards cards gets its rewards program gutted).  Since I have no plans for applying for any loans soon, I couldn't care less about my short term (next 2-3 years) credit score.

[Anonymous]

I would say apply with City bank. Get the Cash back rewards one.

[aamex]

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@Anonymous wrote:

What about people who PIF and always plan to PIF, and just use cards for the rewards, though?  Saying I should only apply for the credit I need is kind of silly, since I have never needed any credit.

I'm in a similar situation, with just a Chase, AMEX revolver (both opened in the past 6 months), and 7 years of history on a CU card I never use with a 1,000 CL.  EQ from myFICO was 760-something (one 30-day late).  To me, it almost makes sense to open more cards now, so that in a few years, AAoA will be fairly impenetrable, and I won't have to worry if a new rewards card comes out that I want (or one of my current rewards cards gets its rewards program gutted).  Since I have no plans for applying for any loans soon, I couldn't care less about my short term (next 2-3 years) credit score.

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I always PIF as well lesscryptic.  But how i've learned to interpret that is to get credit as you need it not all at once, because your lifestyle changes. For example: my chase sapphire is brand new I got it because theres a good promotion and it actually fits. But, my BCE I got in 2011 are when it first came out and I didnt need it I just got it to have it, even worse I got it have it and the rewards aren't even attractive to me. So in hindshight, i wouldnt have to sockdrawer the car or take the hit in my AAoA. 

I think you should care about your credit score both short and long term, because life is what happens when your busy planning.  Also if you do the math its a slower process to build AAoA with many accounts especially many new accounts.

[Open123]

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@Anonymous wrote:

What about people who PIF and always plan to PIF, and just use cards for the rewards, though?  Saying I should only apply for the credit I need is kind of silly, since I have never needed any credit.

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I agree with you.

To me, an inquiry and credit score should be used to derive benefits.  I wouldn't want to use inquiry or lower my score just for a line of credit with no benefit.  In my view, a credit score is ideal to reap the benefits of certain rewards cards.

Other types of financing (such as for a home or business expansion) aren't going to be decided by inquiries and Fico scores alone.  Matter of fact, other factors are much more important than the amount of inquiries or what your score happens to be.

What's the point of having a high credit score if one isn't going to use to reap the rewards?

[aamex]

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@Open123 wrote:

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@Anonymous wrote:

What about people who PIF and always plan to PIF, and just use cards for the rewards, though?  Saying I should only apply for the credit I need is kind of silly, since I have never needed any credit.

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I agree with you.

To me, an inquiry and credit score should be used to derive benefits.  I wouldn't want to use inquiry or lower my score just for a line of credit with no benefit.  In my view, a credit score is ideal to reap the benefits of certain rewards cards.

Other types of financing (such as for a home or business expansion) aren't going to be decided by inquiries and Fico scores alone.  Matter of fact, other factors are much more important than the amount of inquiries or what your score happens to be.

What's the point of having a high credit score if one isn't going to use to reap the rewards?

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just my opinion, but I believe a credit score is more important than just reaping the rewards. In my opinion, since a credit score is an indicator of risk and creditworthiness it even more crucial to financing cars and homes. Because these are large purchases that if financed the interest rate could change your costs substantially. So, when you look at the bigger picture having the interest rate on your mortgage a few basis points lower or in many cases 2-5% difference if you're looking 650-750 FICO is thousands of dollars in difference which is far more important than cashback back or air miles to me. Additionally, your age of accounts is important to this too (see mortgage threads). This isn't to say that FICO is the end all be all of major purchases, but it can help save a lot of money and gives the bank an indication of how much it should loan you based on your debt to credit ratio which is embedded in your FICO score with the inquiries that you have.