Applying for new credit vs. time

[flinjami83]

I'm curious when rebuilding credit and you are watching your score go up, how long should you wait to apply for new lines of credit? 

I got a new unsecured Cap one card in Nov 2012, then just got a Victorias Secret card opened last month (2/13). It is helping my score, so I'm wondering if opening any more would hurt or help my credt right now. I don't need anymore, I am just trying to build my score. I also have a First Premier card I've had since 2011 in good standing, with no lates. 

[Anonymous]

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@flinjami83 wrote:

I'm curious when rebuilding credit and you are watching your score go up, how long should you wait to apply for new lines of credit? 

I got a new unsecured Cap one card in Nov 2012, then just got a Victorias Secret card opened last month (2/13). It is helping my score, so I'm wondering if opening any more would hurt or help my credt right now. I don't need anymore, I am just trying to build my score. I also have a First Premier card I've had since 2011 in good standing, with no lates. 

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You've listed three revolving TLs so you are in good shape as far as quantity during the initial rebuild process.  More is a matter of personal preference.  HPs remain on your CR for two years but are removed from FICO scoring after one year.  Some lenders and CCCs may look down on too many HPs within a short amount of time ex: 6-12 months (Barclay's is a good example).  These TLs will have a positive impact to your FICO just *always* pay on time and keep a low UTIL.  You will take a slight hit for any newly report TL but that effect goes away with time (YMMV).  Additionally, AAoA will also be lowered but again, eventually as the TL ages it will grow.

When app'ing some suggest waiting 6 months between "sprees", others one year.  It is completely up to you.  The important part to all of this is time.  As the TLs age your FICO will reflect positive growth.

[DiabolicallyRandom]

With your score range it is likely that you wouldnt be approved for any prime cards.  I would wait to app for new cards for a while.  At the point you are at I wouldnt want to add more subprime cards when, depending on what else is on your report, you could soon qualify for something prime so that you can cancel your cards with annual fees and bad interest rates. 3 revolving cards is a good number for rebuilding.

[Anonymous]

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@DiabolicallyRandom wrote:

With your score range it is likely that you wouldnt be approved for any prime cards.  I would wait to app for new cards for a while.  At the point you are at I wouldnt want to add more subprime cards when, depending on what else is on your report, you could soon qualify for something prime so that you can cancel your cards with annual fees and bad interest rates. 3 revolving cards is a good number for rebuilding.

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Great point on the subprime cards.  I was recently approved via recon for Barclay's and they stated it was "a very good thing" that I had recently closed the Applied Bank card as it was "a known sub-prime".  So ridding myself of that particular card helped a great deal in my particular circumstance (YMMV).  Mind you, I also think *having* that card for 12 months during my initial rebuild process also helped as it created history as a positive / good standing TL.

[DiabolicallyRandom]

Yeah, I agree. Subprime cards can be excellent tools for rebuilding.  They serve their purpose and then you move on before they pro's can no longer out way their con's. I still have my Orchard Card because it is my oldest card. My annual fee will be in October so Im just waiting to see what happens with this transition into Capital One.  Im hoping that after its complete I will be able to do a product change into something better since my scores and reports have dramatically improved since applying for that card.

[flinjami83]

Well now this brings me to another question....

Since I have a FPB card, is that considered a "sub-prime" card? Doesn't closing a good standing card hurt your score? But closing a subprime card and opening a non subprime card is helpful to your score? Doesn't length of time with your TL's help your credit score?

[DiabolicallyRandom]

Yes First Premier is considered sub-prime, definitively. The only way closing a card in good standing harms your score is through utilization, you have less available credit so you cant let as much report.  It mostly comes down to whether or not their fees justify what you have to gain with it.  

[flinjami83]

So which cards are easy to open once you have established good history with the sub prime cards? Like I said I have a Cap One Unsecured and Victorias Secret Card, which I'm assuming are not sub prime?

[DiabolicallyRandom]

The lines of sub-prime can be vague.  I would say sub-prime cards have large fees and high interest rates. Capital One seems to be the loosest to giving credit to rebuilders.  Your best options would probably be through a credit union or more store cards, I would try to research the credit union first because not all are so kind.

[ostatewonder]

I just opened a credit card throught my credit union. At first i started off with a 300 secured card then year and a half later.......like a month ago i was approved for a 2000 unsecured card. Got it and my score jumped up from 630 to 640 just from opening a new line of credit. Now what I didnt know is that it only reports to eq, so Imma wait 6 months and make sure I only get a card that reports to all 3. Good question though as to what card I should get next.