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Recent Lines of Opened Credit..Questions

New Member

Recent Lines of Opened Credit..Questions

I have a general question. I am in the rebuilding phase with my credit and in the past 6 months or so I have obtained 2 capital one cards and most recently a discoverit card. Over the holiday this year I had intentions on using some line of credit with Walmart and Sams Club. I was approved for both but unfornuately never used them so now I have a credit card with Walmart and Sams Club. I am on the fence and thinking about closing these accounts. Is this a smart decision? my overall credit score is just a little under 700 right now. My concern is I dont want to have 50 lines of credit opened up and it hurt me from making my score higher plus I would eventually like to get approved for an American Express card. If you were me what would you suggest and should I close some of these accounts out? Accounts 1-4, 10 have 0 balance and never been used.

 

Below is what I currently have opened with lines of credit.

 

1. Walmart Store Credit

2. Sams Club Store Credit

3. Toys R Us

4. Dell Preferred Account

5. Capital One Quick Silver

6. Capital One Journey

7. Discover It

8. Amazon Store Credit

9. GameStop Power Up Reward Credit Card

10. Barclay Rewards MasterCard

 

Thank you.

Message 1 of 14
13 REPLIES
Frequent Contributor

Re: Recent Lines of Opened Credit..Questions

Welcome to myfico. I would stand tight. Unless, you plan on never using the cards. If that is the case, then close them.

Message 2 of 14
Regular Contributor

Re: Recent Lines of Opened Credit..Questions


jeremymh wrote:

 My concern is I dont want to have 50 lines of credit opened up and it hurt me from making my score higher plus I would eventually like to get approved for an American Express card. 


Sorry, but the damage has already been done. Your AAoA is very low now.

Message 3 of 14
Senior Contributor

Re: Recent Lines of Opened Credit..Questions

Welcome to the forum.  Keep the cards for now and head to the garden. My recommendation is to think twice before submitting an app and not after the damage has been done already. Smiley Happy

Move the mouse over the cards for detailed view!
....Last HP 01 NOV 2016...............
Message 4 of 14
New Member

Re: Recent Lines of Opened Credit..Questions

What exactly does that mean?

 

I hate to sound stupid but I am new to all of this and have been getting my credit repaired professionally by a law firm since April 2014. I have came a long way and I dont want to go backwards. If it makes sense for me to close 4 accounts that were just opened within 3 weeks or less ago and never been used then this is what I want to do if it helps me in the long run.

 

Please advise.

Message 5 of 14
Established Contributor

Re: Recent Lines of Opened Credit..Questions


jeremymh wrote:

I have a general question. I am in the rebuilding phase with my credit and in the past 6 months or so I have obtained 2 capital one cards and most recently a discoverit card. Over the holiday this year I had intentions on using some line of credit with Walmart and Sams Club. I was approved for both but unfornuately never used them so now I have a credit card with Walmart and Sams Club. I am on the fence and thinking about closing these accounts. Is this a smart decision? my overall credit score is just a little under 700 right now. My concern is I dont want to have 50 lines of credit opened up and it hurt me from making my score higher plus I would eventually like to get approved for an American Express card. If you were me what would you suggest and should I close some of these accounts out? Accounts 1-4, 10 have 0 balance and never been used.

 

Below is what I currently have opened with lines of credit.

 

1. Walmart Store Credit keep this one open for free FICO score and try to product change to MC or Discover down the road

2. Sams Club Store Credit SD

3. Toys R Us SD

4. Dell Preferred Account SD

5. Capital One Quick Silver use this as your main card for 1.5% cash back on purchases

6. Capital One Journey keep this one open and PC later if you don't like it

7. Discover It use for 5% rotating categories

8. Amazon Store Credit use this for Amazon if it has decent rewards, if not SD

9. GameStop Power Up Reward Credit Card SD

10. Barclay Rewards MasterCard keep this open and PC later if you don't like it 

 

Thank you.


Two terms you are going to want to get familiar with:  SD (sock drawer) and gardening.  Gardening is basically the idea that you have planted these seeds (the new accounts) and now you need to stay in the garden and help these accounts grow by not adding any new accounts for 6-12 months.  My advice would be 12 months minimum since you have quite a few new accounts and a lot of these are store cards that you probably will not keep long term.  You help them grow over time by keeping them active and increasing the credit limits and lowering the APRs.  The longer they stay open on your credit report the more they are helping your credit score.  You also help your credit score recover from all of these new accounts and inquiries.  After 12 months you will have recovered any points you lost. 

 

In red I typed what I would do with each of the cards.  The ones marked SD I would throw in the sock drawer and not use them at all.  They will stay open until the issuer closes them due to inactivity (around 2 years I would say is normal).  After they are closed they will stay on your credit report as a posiitive tradeline for at least 10 years so there is no impact on your credit score until way down the line when it won't really matter.  By then you will have all kinds of auto loans, credit cards and mortgages on there and these old store cards will be long forgotten. 

 

You can also just close the ones you don't want right away if it makes you feel better but there is really no need to do so.  Make your payments on time for 12 months and you will have no problem getting American Express at that time.  You may be able to get approved sooner but the best thing is really to wait it out.  If you were approved now it would be a much lower limit and probably a higher APR due to all of the new accounts.  Be patient and you will be rewarded. 

Message 6 of 14
Established Contributor

Re: Recent Lines of Opened Credit..Questions

Also I just saw the part about getting the credit repaired by the law firm.  You don't need to do that anymore.  You are in good shape and you have found the best credit resource out there and its totally free.  Thank them for the help and tell them you can take it from here.

Message 7 of 14
Established Member

Re: Recent Lines of Opened Credit..Questions

This^+1 With some browsing on these forums you can take care of yourself, most of these credit repair service$ just aren't worth it. My advice, do not apply for anything else in the next 12 months. Keep balances under 30% on each card, the lower the balances, the better your score will be.

 

In 6 months try to contact your current lenders and ask for CLIs only if they are Soft Credit inquiries, if they ask for a hard inq, decline since it will hurt your score / gardening progress.

 

Also if possible make a little more than the minimum payment, this will improve your relationship with the lender when it comes to requesting a CLI / Lower APR / Other product from them.

Discover IT $500(joint) l Cap1 Journey $600 l Cap1 QS1 $300 l NFCU Plat $500
NFCU LOC $2000
20 year old college student, Gardening until 1/1/2016
Message 8 of 14
Established Contributor

Re: Recent Lines of Opened Credit..Questions

If any of your card has an annual fee, you would have already paid it the first billing statement after account opening. If so, SD them and keep for a year. Cancel the cards before the next annual fee gets charged. The cards with no annual fee, just SD if you're not using or will not use. Keeping these cards open helps your overall utilization. Low overall util helps you in the long run. Of course, this is only a small fraction of what could help or hurt your credit score. You already took the hit (inquiries and average age of account) on your credit...might as well garden what you have right now.

Message 9 of 14
Senior Contributor

Re: Recent Lines of Opened Credit..Questions


jeremymh wrote:

I am on the fence and thinking about closing these accounts. Is this a smart decision? 


The smart decision would have been to decide on whether or not you needed the accounts before applying, not after.  You've already taken hits from the HP's and reduction to your AAoA.  At this point you just have to make the most of the situation you're currently in.

 

Don't overlook the stickies.  This thread is linked in the Helpful Threads sticky in this subforum:

http://ficoforums.myfico.com/t5/Credit-Cards/Closing-Credit-Cards/m-p/347190?jump=true

 

Use it and your needs/wants/preferences/priorities to make your decision.  Run the numbers to determine how your utilization would be impacted to help you in your decision making.

 


jeremymh wrote:

My concern is I dont want to have 50 lines of credit opened up and it hurt me from making my score higher


Number of cards is not a factor.  These are:

http://www.myfico.com/crediteducation/whatsinyourscore.aspx

 

Now, a creditor may decide that you already have enough credit for your profile but that's an entirely different matter.

 


jeremymh wrote:

If you were me what would you suggest and should I close some of these accounts out?


It's not what others would do that matters.  If I were you I wouldn't have that lineup to begin with.  If I were you I wouldn't apply for cards and then consider closing them right away.  Use the info above along with your needs/wants/preferences/priorities to make your own decision.  You can't poll others to determine what's best for you.  We can certainly provide recommendations but you need to focus your request and we can't simply make meaningful recommendations using only a list of your cards.  Is scoring your only consideration (aside from getting an AmEx but we can't tell you that doing X will get you approved for one)?  If so, the Closing Credit Cards thread covers scoring impact.

 

And be more careful with your due dligence prior to applying for cards.  We're happy to help out there as well.

 


jeremymh wrote:

What exactly does that mean?


Not sure exactly what you're asking about but the prior post ended with the text "the damage has already been done".  That means that closing won't remove the hard pulls that you incurred when you applied for the cards.  It also means that closing will not increase your AAoA (again, covered in the Closing Credit Cards thread) whih was reduced when the accounts were opened and reported.

 

You may want to close the accounts if they're of no use to you.  You might, on the other hand, want to hang on to them and use them to build your credit.  It's up to you to read up and determine how you want to handle your situation.  Keeping the accounts open may help with utilization (also addressed in the Closing Credit Cards thread) but you'd need to run the numbers to see how your utilization would be impacted specifically.

Message 10 of 14