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Question for those who started out by opening a large number of accounts

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red259
Super Contributor

Question for those who started out by opening a large number of accounts

We often see people post when they open a massive amount of accounts when first starting up. Although it doesn't seem like we hear much about the after effects a year or two later and how it all worked out in the end. This is a question for people who go from having little credit to opening like 20-30+ accounts within a year. I'm an advocate of the slowly building up a credit profile, but for those who have done this and it has been two or more years what was the end result? Do you regret it? Did you end up dumping many of the cards? What was the impact on your scores? Did you hit any AA?  Have you had issues getting new approvals or CLIs? Were you stuck with mostly toy limits? Would you do it again? What would you do different?

;
Starting Score: EQ: 714, TU 684
Current Score: EQ: 725 7/30/13, TU 684 6/2013, Exp 828 5/2018, Last App 8/5/17
Goal Score: 800 (Achieved!) In garden until Sepetember 2019
Message 1 of 17
16 REPLIES 16
Anonymous
Not applicable

Re: Question for those who started out by opening a large number of accounts

I didn't open 20 or 30, but I opened seven accounts within the first eight months of my credit history, one of which doesn't seem to report to the bureaus (a PLOC) .

I intentionally owned that many in order to "ballast" my AAoA. My AAoA, short as it is, is only four months short of the age of my oldest account, and being made up of the six accounts that report, any new account I open will only reduce it by 1/7th.

The effect was to lower my score, I estimate I lost around 30 points between new account penalty and the HP's, but the effect should be temporary.

The first HP's roll off my report this coming October, all but two will be gone by mid November, and the last two will be gone in April.

My theory is that once they roll off I will be in better shape than had I stuck to the standard advice to get two or three only. I have higher overall limit, a thicker file, and a well protected AAoA.

Message 2 of 17
Open123
Super Contributor

Re: Question for those who started out by opening a large number of accounts


@Anonymous wrote:
My theory is that once they roll off I will be in better shape than had I stuck to the standard advice to get two or three only. I have higher overall limit, a thicker file, and a well protected AAoA.

This is exactly how I had started, and how I would start again today, whether new or rebuilding.  After 2 years, you'd be way better off than had you started slowly.  In 5 years, stable AAOA (the ballast effect) that can withstand new TLs when necessary.

Message 3 of 17
Anonymous
Not applicable

Re: Question for those who started out by opening a large number of accounts

Its only been 6 months since I went on my first app spree before I found the Fico Forums but I'm going to put my two cents in anyways!! I opened 20 accounts 6 months ago (including car loan, and student loans). I do not for one minute regret opening up a large number of revolving accounts. They are no long toy limits as most are in the thousands now. They grew with me quickly. My discover and BOA are secured but in 6 months they won't be😊 The only thing I would have done differently would have been to apply to Citi bank or Chase first before some of the store cards, however I do have an IN with Citi. Whats really cool about applying for a large amount of cards is that they grow at the same time. I've hit 6 months on most of my cards now and I've gotten some rather huge CLI's mostly thru Synchrony. I have received several score increases in just the last few days due to the increases and my New accounts will be rounded to 1 year for AAOA.
Message 4 of 17
Anonymous
Not applicable

Re: Question for those who started out by opening a large number of accounts

I have 16 accounts between February and August of this year. 

 

I did not follow my age of accounts before this spring but it was about 4 years.  Now,  its under 3. I took a 30 point hit too.  I had three settled accounts with citibank,  all old.  Now my two oldest are jcpenny from 1996 and target 2010. Since I had few denials for really good Card I thought I was still rebuilding looking back I really wasn't I just needed use what I had,  but too late now.  Every month that goes by those 15 accounts all get stronger together that's the way i have to look at it

Message 5 of 17
toi34
Established Contributor

Re: Question for those who started out by opening a large number of accounts

This was me in 2013, I went from 0 accounts with collections/charge-offs on my credit reports to clean reports, no late pays, a new car and 30+ accounts. I don't regret it and I have never been AA'd. Some cards have toy limits (Comenity) and some do not (GE/Synchrony), plus I have 8 major CC's a few with $5000 limits. However, there are cards that I applied for because they were all the buzz on this site, but now find myself never using them. Oh well.....but all-in all, no regrets! Luv this site and glad I found it!  Smiley Happy

Message 6 of 17
DeeBee78
Valued Contributor

Re: Question for those who started out by opening a large number of accounts

Well, I'll admit that I do regret opening some of my accounts, because I barely use them. I opened 12 credit accounts, a personal loan, and a car lease in the past year. Overstock, American Eagle, J. Crew and iComfort are all on the chopping block as soon as I'm approved for a card that will come close to their combined limits. My Capital One cards will be combined into one card, leaving me with 7 accounts - 3 major, 4 store. 

 

When I opened them, I was depressed about my credit situation, and the approvals (however small they were) helped lift my spirits. However, these cards have grown with me, and I've gone from less than $3,000 in credit to over $53k.

 

 

 

Message 7 of 17
Anonymous
Not applicable

Re: Question for those who started out by opening a large number of accounts

Well, I started rebuilding my credit in December of 2013 with Capital One. I got the 2nd CapOne card in March 2014. Then, I added 3 VERY subprime cards in 2014 along with Fingerhut. My scores remained deflated for most of 2014.

 

I learned about the individual credit limit thresholds: <1000; 1000 to 5000; 5000 to 10,000; 10,000 to 20,000; and >20,000 and beyond to the super-primes! I also learned about the total credit thresholds: <2500; 2500 to 15,000; 15001 to 50,000; >50,000.

 

I ran across an article about secured credit cards, and I chose to do it through the Library of Congress Federal Credit Union, which was my local bank at the time. So, I put the max of $5 thousand on the secured card and let it run for a year. I used it regularly and paid it off regularly throughout 2014. My scores only moved a few points throughout the year. When the year was up, I called the loan officer in July 2015 and called his attention to my payment history and asked that the card be converted. He immediately converted it to unsecured and released my funds. THAT was the first card that posted as unsecured for 5000. 

 

Well, my scores jumped 150 points from the mids-600s to high-700s, after my Library of Congress FCU went unsecured- aided by the spotless records with the 2 CapOne cards, the 3 subprimes, and Fingerhut. Also, I had just opened 2 more secured cards in July of this year with USAA and the State Department FCU for $5000 each- not knowing whether Library of Congress would convert and the resulting impact on scores.

 

When I saw that my scores soared, I immediately closed my 2 recent secured cards, Fingerhut, and my 3 subprimes- each just shy of a year of history. I knew that any new cards would see the sub-par credit levels and I didn't want that. I opened Penfed @ 7000; USAA @ 12,000; United Nations FCU @ 10,500; CapOne Venture One @ 7500; CapOne Quicksilver Visa @ 3000. All of these were opened in the August 2015. My other 2 builder CapOne Mastercards were upgraded, with modest increases to Quicksilver (1750) and Quicksilver One (2500). 

 

As has been said, I didn't know about Chase's, Citi's and Discover's policies regarding "too many new cards in 2 years". Had I known, I would have applied for those first. I was summarily denied by Chase, Citi, and Discover- even with my 772 on all three scores. 

 

I can state definitively that companies do look at your average limits and I was glad to get rid of the low-levels right away. I spoke to CapOne's executive office the other day because as you can see- my 3 lowest cards are from CapOne. My options were to wait until the next billing cycle to ask for an increase of my QS MC 1750 and then immediately combine the 2 QS/QS1 mastercards, or, combine all 3 quicksilvers now (or later) into another Venture One, or Venture with a waived annual fee for just one year. 

 

I have also been doing the pre-qualified thingys you come across- you know, the ones without a hard pull? Just to see what else I could get and the result have been about half of them denied for the same reasons that Citi, Chase, and Discover denied me. 

 

So, guess what I did? I opened accounts with Andrews FCU, Senate FCU, Congressional FCU and NASA FCU. Spoke to their loan officers about credit cards. All of them did softies- and all said to maintain my accounts with each of them in good standing for at least 90 days and they would likely match or do better than the card that has the best history/limit. It was like the same person worked at all 4 of the banks (lol) because they said virtually the same thing. 

 

Bottomline: I have decided that I'm not even going to apply for Citi, Chase, Amex, or Discover after gardening. The credit unions and CapOne have done really well with accommodating me with good limits and APRs as my scores have improved! My credit unions all have cards with rewards and cash back, etc. I'm with some excellent credit unions and do not miss Chase, Citi, BOA, AMEX, Discover, and others of that ilk. So, I'll likely get cards with the 4 credit unions I just mentioned and then, who knows?

 

As it stands, I started with $800 with the 2 CapOne builders a year ago... and now... I got $49000 and change. Most of my cards are at prime levels and I'm within striking distance of reaching the >50,000 total credit category. 

 

So, to others who are opening large numbers of accounts... THINK about what your end goal is for your portfolio BEFORE you spree yourself into an unnecessary 2 year wait for some cards that you could qualify for now. 

Message 8 of 17
LadyJEsq
Established Contributor

Re: Question for those who started out by opening a large number of accounts

I'm one of the ones who started out slow as it was suggested to me back in 2012 (my first post on myFICO). I started with two secured cards and managed them as suggested. I PIF and used them regularly. I generally had a low Util % posting, but occassionaly that wasn't possible. I saw little to no improvement in my credit scores. Once I had a couple baddies fall off my CRs then I saw improvements, but I saw very little with just the two secured cards I opened. 

 

One day while on CK, I saw that my EQ score was over 700 and my TU was in the high 600s and I wondered if I could be approved for CCs. From experience, I knew my CK scores were at least 50points higher than FICO 8, so I decided to go for some fair/good CCs. I decided to apply to them in a short period of time because I thought this would give me a better chance at approval.  To my surprise, I was instantly approved for my first two cards. I thought doing two a day was best, so I waited a bit, like 2wks, and then applied for 2 more. To my surprise, I wasn't instantly approved! I didn't know what to think but while I was waiting to hear back on the two (NASA and BofA), I applied for Discover it Miles and again, wasn't instantly approved. I received a call first thing the following morning and the CSR told me that they reviewed the documents that I attached to my application for verification and informed me that I was approved. It was at this point that I remembered the forum here and came to ask what I should do given that I wanted to use my rewards cards frequently. It's at this point that my Barclay's card had been supplying my FICO 8 score and I saw it go from an intial 666--->674---->687. To say I was shocked is putting it mildly, but I wanted to keep my scores decent and I knew that meant keeping my Util% low which meant i needed more CCs otherwise I'd have over 50% if I wanted to take advantage of my rewards. In short, I went on another mini spree (2/3 approvals) and now my FICO 8 score is 676. I suspect it'll rise again once all my cards are reporting given my low Util %.

 

I really wish I had taken a more aggressive approach to my rebuilding back in 2012. Fortunately for me, I don't plan on buying a home for about 2yrs, so that gives me plenty of time to get my scores and AAoA (now at 5+ yrs for both TU and EQ, and around 3+yrs for EX) back up. While I can't say that getting 20-30 new accounts in a short period of time is what's best for most rebuilding, I do think being more aggressive than opening 2-3 is what is best, in my experience. As with most things in life, it's all about moderation.

**FICO 8 Scores EQ EX TU **


Message 9 of 17
Anonymous
Not applicable

Re: Question for those who started out by opening a large number of accounts

I opened 5 CCs and a secured loan all quickly to get started ( Iwanted to buy a house and had no credit). After a year, I purchased my house, and made a significant spree. During the time I was building and preparing for the house purchase, I figured out exactly what i needed and went forward with adding 8 (now 9 after Citi DC approval) cards. I have also closed 2 (will soon be 3) of the original starter cards. Scores sit in the 720s despite 15ish inquiries on each and 10 new accounts (mortgage and 9 cards.) I use all of my current cards regularly. I think the bigger thing is to have a plan and add as much of it as you can quickly. Just understand your spend and make a plan, rather than just throwing darts and see what sticks.

Message 10 of 17
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