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Will adding new credit cards hurt my score?

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Anonymous
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Will adding new credit cards hurt my score?

I've been working on rebuilding my credit post-divorce. I started with scores in the low to mid 500s, added a secured card and have worked up to the mid to high 600s. I was excited to see the improvement and applied for two new credit cards...a Chase Freedom and AMEX Delta Gold. I was approved for both. Now I'm frightened to see what will happen to my scores when the new cards report. How much of a hit can I expect? And how long will it take to recover? My average age of accounts is already quite low...about 3 years.

Message 1 of 8
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Anonymous
Not applicable

Re: Will adding new credit cards hurt my score?

You may take a hit, since it sounds like your AAoA may go from 3 to 1 and you'll have two inquriries and your Age of Youngest Account will go from over 24 months to 1 month..  But it is the right move for the medium to long term  -- it's important to have three cards for your score.

 

Just relax and don't worry about it.  You'll know more once the cards appear on your reports.

Message 2 of 8
Cprman
Contributor

Re: Will adding new credit cards hurt my score?

Don't worry one bit that's a great step to building some really decent credit. The key is to get a nice deck of cards and then sit on them and don't miss a single payment (automatic min payments for backup). Maybe in 6 months if your scores are looking good grab one more. Better to take all the hits early and then it will really payoff in the long run. 

5/08 EQ 696.....9/13 EQ 796.....9/17 EX 824, EQ 843
Amex Blue Cash 15K || PenFed Cash Rewards 18K || Chase Freedom 12K || Cap1 Quicksilver 15K || Amazon Prime 3.8K || Citi Double Cash 10.8K
Message 3 of 8
Anonymous
Not applicable

Re: Will adding new credit cards hurt my score?

OP, prior to getting these 2 new cards, how many total accounts (both open and closed) did you have on your credit report that made up your 3 year AAoA?  How long ago before these 2 new accounts was it since you opened an account?  How old is your oldest account on your credit report?  How many inquiries do you have in the last year?

 

These factors above all play a role in how much of a score drop you'll experience from apping for and getting approved for 2 new accounts.  The amount of points lost are all very profile-specific, so answering these questions above can give us a bit more data on your profile to offer a reasonable expectation for you.

Message 4 of 8
Anonymous
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Re: Will adding new credit cards hurt my score?

Thank you!

Message 5 of 8
Anonymous
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Re: Will adding new credit cards hurt my score?

Prior to the new cards (which aren't showing up in reports yet) my oldest credit files have mostly aged off, including past mortgages in good standing, etc.

 

On EQ and TU: AAoA 3 years

The secured card (showing as 5 months)

An auto loan (paid off, no lates, etc., showing as 5 years,7 months).

 

On EX: AAoA 5 years, 5 months

The secured card (5 months)

The auto loan (5 years, 7 months)

An old closed credit card (10 years, 3 months)

 

Inquiries:

EQ: 1

TU and EX: 2

 

 

Current FICO scores are EQ 746, TU 640, EX 661

Message 6 of 8
Anonymous
Not applicable

Re: Will adding new credit cards hurt my score?

As far as your EX report, BBS wants to know how long that credit card was closed for.  It was opened a little over 10 years ago.  The close date is important because it will stay on the report for ten years after that, at which point it will drop off.

 

Just to make it simple, let's assume that you closed it a long time ago and it will drop off soon.  In that case, all three reports will soon have two older accounts on them (not counting the two new cards).

 

Thus your new AAoA when the new cards appear will be

 

3 + 3 + 0 + 0

-------------

      4

 

or 1.5 years.  That's a drop in your AAoA but not by much.  And 5-6 months after that your AAoA will cross over 2.0, which will repair that AAoA effect.

 

The AAoA drop will not be the only affect on your score.  Helpful was discovering that your youngest account was only five months old.  Going from 5 months to 0 months should have no immediate impact (as far as Age of Youngest Account).  The two new inquries will have some effect as I mentioned.  The good news is that a few months after you have the new cards, you will be able to generate extra scoring points by having all cards at zero except one (AZEO) with the remaining card showing a small balance. 

 

The biggest idea that's applicable here is the Serenity Prayer.  You already applied for the cards so you cannot change what may happen to your score.  Over things we cannot change, we wish to cultivate an attitude of serenity and acceptance.

 

Similarly, though, your post would make a ton of sense before you apply.  In other words, while you can still control events, gather information about how action X or Y or Z will affect your score.  Then use that information to make the most rational choices.  Once choices have been made, however, do your best to relax.  Go bowling with friends, watch a movie, go for a run or a walk in the park, whatever you need to do to defuse anxiety, because the anxiety cannot at this point benefit you.

Message 7 of 8
jamie123
Valued Contributor

Re: Will adding new credit cards hurt my score?


@Anonymous wrote:

I've been working on rebuilding my credit post-divorce. I started with scores in the low to mid 500s, added a secured card and have worked up to the mid to high 600s. I was excited to see the improvement and applied for two new credit cards...a Chase Freedom and AMEX Delta Gold. I was approved for both. Now I'm frightened to see what will happen to my scores when the new cards report. How much of a hit can I expect? And how long will it take to recover? My average age of accounts is already quite low...about 3 years.


You've done a great job in improving your scores! Don't worry about getting the 2 new credit cards. That was a very smart credit decision and you needed more cards to build your scores at this point. Those are really nice cards by the way! Excellent choices!

 

If you can, I would suggest waiting for a year now (Go into the garden.) and then apply for 2 more high quality cards and then you can retire from building at that point if you want.

 

Great job so far! Congrats!


Starting Score: EQ 653 6/21/12
Current Score: EQ 817 3/10/20 - EX 820 3/13/20 - TU 825 3/03/20
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