Rebuilding Your Credit

[codesingh]

Hello All,

Happy New Year 2013(almost)...

I am rebuilding my credit. All three of of my scores are above 730 right now(12/31/2012). I have 4 Hard Pulls in my credit report and 3 cards. Two of the cards do not have any annual fee and the limites are above $1000 in each.

I have been getting the itch to apply for another card. I keep thinking, regardless of how many HPs I have, they will fall in two years so why not use HP and take chances and then stop applying after I have certain HPs on my reports, lets say I stop applying after i have 8 HPs. Am I am thinking right? First off, I don't even know how many HPs is bad to have on your credit report. Please suggest.

Thanks,

Singh

[RobertEG]

With three revolving lines of credit, you currently have sufficient revolving to satisfy the FICO credit mix. 

Any new account, in addition to the inquiries, will, if added to your credit report, necessarily decrease your average age of accounts, and will be a new acct for approx one year.  All of those have negative FICO implications.  An advantage might be obtained in util if the added credit limit is high, but that can alternately be addressed by simply keeping your balances low.

I dont see a clear advantage to pursuing an additional CC for FICO scoring improvement.

[codesingh]

I am mostly thinking about AAoA...for future.

I have only 4 inquiries and each those inquiries resulted into approvals for a CC.

All of these 4 will fall in maximum of two years(sometimes earlier).

If I apply for a couple more cards my inquiries will increment to 6 but they will fall around the same time period as the previous 4 compare to them falling 6 months later(if i were to wait for 6 months to apply for a new card, but then that will hurt my AAoA).

Am I thinking right?

[llecs]

It all depends on your goals. If your goal is to get more CCs, then that's the step to take. If the goal is to have higher FICOs, then that's not the goal to have, over the next year or two anyway. If your goal is higher FICOs years out, then you can easily recover. If an 800 FICO is the goal within a year then new credit is bad. Different strokes for different folks.

IMO, ignore inquiries. FICO stops scoring them at a year  (ignore two years because it won't matter after one). Inquiry damage is overrated anyway (ETA///I used to have 30 each on EX and EQ and were each under a year). The damage comes from the new credit, impact to AAoA if any, etc.