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10-20-2012 04:05 PM
About three months ago, I opened up my first line of credit in a Citibank student credit card. I've made all my payments on time and am seeking new lines of credit to build on my credit score. I understand that it's not recommended that someone who just opened their first CC go and apply for more within the first six months, but here's my thinking:
The Credit Karma simulator predicted a 60 point decrease in credit score even though I'm opening up a new line of credit and haven't had any hard inquiries. My friend who has had a credit card for about three years saw an increase in credit score. This makes it seem like the reason I would take such a hit is because of my avg/oldest account age. So, some questions I have:
10-20-2012 05:32 PM
I agree that a 2nd CC would help but your FICO score would not increase that much. The scores offered by CreditKarma are not FICO scores. Ignore their scores.
If I had what you had, I'd wait until the other is 6 months old before applying for one more. Your odds will dramatically improve. If you only have this one CC, you don't have a FICO score yet and the odds of being denied are higher before it turns 6 months.
Don't apply for a card to carry balances on it. That can be dangerous. In other words, if you are looking to buy stuff at these stores, stick with cash if you don't have a store card by then. You'll find yourself wanting to apply for more store cards for the sake of ringing up balances on them.
For best results per FICO, pay all cards to $0 except one and get the one under 9% util. 30% util will ding you quite a bit.
10-20-2012 06:10 PM - edited 10-20-2012 06:11 PM
Welcome to the forums! I'd suggest two things in addition to illecs' most excellent advice:
1) You want to establish multiple tradelines as soon as possible. 2-3 revolving tradelines (credit cards for this discussion) is generally considered optimal both from what's been reported here, and also in my own personal experience as well. 3 is possibly marginally better than 2, but it's in no way required. That said a swing of 3 months isn't going to hurt you at all in a few years anyway.
2) Inquiries are pretty minimal as far as penalties go; it is never recommended to continually apply for credit cards (or other loan types as well) but that doesn't sound like the case here. While you won't have a FICO score for another few months, if you plan to shop at a particular store during Christmas and the rewards for the card are meaningful as compared to paying in cash, I'd probably take the shot anyway. Alternatively I'd apply for something like BOFA's student rewards as that has their standard 1-2-3 rewards package on it, which is a pretty good every day card, and is designed for folks in your specific situation.