Rebuilding Question

[Anonymous]

Hello All!!

I've been lurking for about 2 mnths, absorping all the good info shared like a sponge. Thanks to everyone for sharing your knowledge.

Just a quick question - I've people advise several times that opening up new accounts in order to get additional credit is a bad idea when trying to improve credit. Besides the HP's, if you get the credit that you apply for, how is this a bad idea? Please help me figure this out. Thanks.

[joeyoey]

It also brings down your AAOA (average age of account).  I think this has a more serious impact than the HPs although this (like everything else) is lessened with time.  This is why it's important to only apply for cards you know you will use because while it's tempting (for most of us) to apply for more & better cards as our score improves, it does ding your score the more cards you have, at least in the short twrm.

[RobertEG]

You obviously have to have credit in order to be scored, and scoring categories such as mix of credit can compel taking a short-term hit in exchange for new accounts.

Whether or not seeking additionaly credit is a good strategy depends upon your current individiual situation.

There is little question, for example, that having no or only only revolving account is a bad scoring mix of credit, and longer-term benefit will most likely come from having at least two revolving lines of credit.

However, the addition of an installment account only to improve credit mix is of more questionable advantage.

What accounts do you currenty have, and what is your current average age of accounts?

[Anonymous]

Thanks for the responses. My AAOA is about 5 years but I was just approved for a Cap 1 QS card last week so that will bring it down some. Before getting this card, I had a QS1 with a limit of $1500, a walmart card with a limit of $2300, a Macys card with a limit of $1300 and 2 other comenity cards with limits of $920 and $1460.

The reason why I asked is that I would like to apply for an AMEX and NFCU card within the next 6 months but wanted to see if that could have a negeative effect. I didn't really consider the affect of AAOA's.

Again, thanks for both responses!

[Anonymous]

I have a similar AAoA as you do and I applied (and was approved) for an AMEX yesterday. I'll post back when the card shows up on myfico report and let you know what kind of ding my AAoA takes.