topic Re: Should I apply for third credit card with no credit history for building credits? in Credit Card Applications

Should I apply for third credit card with no credit history for building credits?

BK903S — Wed, 30 Nov 2022 00:51:13 GMT

I had already applied, got approved for both Amex and Discover this month, and activated both cards. Credit Karma alerted me that Amex did a hard pull, and I cannot find pull information on Discover. Should I apply for a third card as a beginner this early to build credits? I had no loans, and my credit reports looked empty from all three credit bureaus.

Re: Should I apply for third credit card with no credit history for building credits?

Anonymous — Wed, 30 Nov 2022 01:03:40 GMT

Nope, let me be a cautionary tale: wait for a year then apply for Chase.

Re: Should I apply for third credit card with no credit history for building credits?

citymunky — Wed, 30 Nov 2022 01:04:22 GMT

Discover would have pulled your report from Experian which Credit Karma doesn't monitor only TransUnion and Equifax, but they display your VantageScore 3, not your FICO 8.

If you want to monitor one of your FICO 8 scores for free, download the Experian phone app.

To answer your question better, more info about the starting credit limit and the name of bank would be helpful to help you out.

The main factor we would be looking from is your total available credit to get the bigger picture.

Re: Should I apply for third credit card with no credit history for building credits?

BK903S — Wed, 30 Nov 2022 01:10:46 GMT

@Anonymous wrote:
Nope, let me be a cautionary tale: wait for a year then apply for Chase.

That's what I was thinking as well. However, I found so much conflicting information on how many cards a beginner with no credit history should get. Some say you need at least three and apply every six months; some say the same but get them as soon as possible because they will not stack on top of each other once they become less critical and fall off the credit report. What is the truth?

Re: Should I apply for third credit card with no credit history for building credits?

BK903S — Wed, 30 Nov 2022 01:15:20 GMT

@citymunky wrote:
Discover would have pulled your report from Experian which Credit Karma doesn't monitor only TransUnion and Equifax, but they display your VantageScore 3, not your FICO 8.

If you want to monitor one of your FICO 8 scores for free, download the Experian phone app.

To answer your question better, more info about the starting credit limit and the name of bank would be helpful to help you out.

The main factor we would be looking from is your total available credit to get the bigger picture.

My start credit limits are 1000 for Discover and 2000 for Amex. I use Bank of America as my only bank. Hopefully that helps!

Re: Should I apply for third credit card with no credit history for building credits?

Anonymous — Wed, 30 Nov 2022 01:42:27 GMT

You could get BOA CCR I guess, since u bank with them, and all 3, Amex Disco BOA grow fast I heard.

Re: Should I apply for third credit card with no credit history for building credits?

citymunky — Wed, 30 Nov 2022 02:31:37 GMT

The truth is understanding what makes up your credit score and what how they effect your score.

Currently with no history, the banks don't have any info to go off of (ie: 35% of your score is payment history). With literally zero account reporting, besides being 30 days late on your first payment I can't see how you can drop your score further if you apply of other card. With 15% of your score is length of credit history, your average age of account is not going to drop because your current age is 0 months, on the flip if you wait until year to apply for a new card that your average age will drop from 12 months to 8 months (12+12+0= 24// 24÷3=8).

So if you can manage one card, I don't think opening other card would kill you, BUT it is important that you don't over extended your self as amount owed makes up 30% of your score. In order to maximize this you must maintain your credit utilization under 30% of your total credit availability (in your current case, 30% of $3000 is $900). However to really optimize your score, maintain credit utilize under 10%).

If you do get a third card, that STOP applying after that, and your lock your reports. Now it's time to build your file by paying off your debt on time and managing you utilization rates.

Also here is the Credit Pull Database:

https://ficoforums.myfico.com/t5/General-Credit-Topics/Which-Report-Will-They-Pull-Part-2/td-p/6379773

Re: Should I apply for third credit card with no credit history for building credits?

BK903S — Wed, 30 Nov 2022 02:59:27 GMT

@citymunky wrote:
The truth is understanding what makes up your credit score and what how they effect your score.

Currently with no history, the banks don't have any info to go off of (ie: 35% of your score is payment history). With literally zero account reporting, besides being 30 days late on your first payment I can't see how you can drop your score further if you apply of other card. With 15% of your score is length of credit history, your average age of account is not going to drop because your current age is 0 months, on the flip if you wait until year to apply for a new card that your average age will drop from 12 months to 8 months (12+12+0= 24// 24÷3=8).

So if you can manage one card, I don't think opening other card would kill you, BUT it is important that you don't over extended your self as amount owed makes up 30% of your score. In order to maximize this you must maintain your credit utilization under 30% of your total credit availability (in your current case, 30% of $3000 is $900). However to really optimize your score, maintain credit utilize under 10%).

If you do get a third card, that STOP applying after that, and your lock your reports. Now it's time to build your file by paying off your debt on time and managing you utilization rates.

Also here is the Credit Pull Database:
https://ficoforums.myfico.com/t5/General-Credit-Topics/Which-Report-Will-They-Pull-Part-2/td-p/6379773

Got it, but why would I need to lock my reports if I get third card? Is it because that's a bigger drop threshold? If I went that route, when should I unlock it?

Re: Should I apply for third credit card with no credit history for building credits?

FinStar — Wed, 30 Nov 2022 03:03:31 GMT

@BK903S wrote:
@citymunky wrote:
The truth is understanding what makes up your credit score and what how they effect your score.

Currently with no history, the banks don't have any info to go off of (ie: 35% of your score is payment history). With literally zero account reporting, besides being 30 days late on your first payment I can't see how you can drop your score further if you apply of other card. With 15% of your score is length of credit history, your average age of account is not going to drop because your current age is 0 months, on the flip if you wait until year to apply for a new card that your average age will drop from 12 months to 8 months (12+12+0= 24// 24÷3=8).

So if you can manage one card, I don't think opening other card would kill you, BUT it is important that you don't over extended your self as amount owed makes up 30% of your score. In order to maximize this you must maintain your credit utilization under 30% of your total credit availability (in your current case, 30% of $3000 is $900). However to really optimize your score, maintain credit utilize under 10%).

If you do get a third card, that STOP applying after that, and your lock your reports. Now it's time to build your file by paying off your debt on time and managing you utilization rates.

Also here is the Credit Pull Database:
https://ficoforums.myfico.com/t5/General-Credit-Topics/Which-Report-Will-They-Pull-Part-2/td-p/6379773
Got it, but why would I need to lock my reports if I get third card? Is it because that's a bigger drop threshold? If I went that route, when should I unlock it?

There's no requirement to lock or freeze your reports. There's no scoring impact for locking them. Often times some individuals do it as a measure to avoid the quick temptation to freely apply for anything under the sun. More of a discipline or control thing to keep oneself from applying.

Re: Should I apply for third credit card with no credit history for building credits?

BK903S — Wed, 30 Nov 2022 03:23:59 GMT

@FinStar wrote:
@BK903S wrote:
@citymunky wrote:
The truth is understanding what makes up your credit score and what how they effect your score.

Currently with no history, the banks don't have any info to go off of (ie: 35% of your score is payment history). With literally zero account reporting, besides being 30 days late on your first payment I can't see how you can drop your score further if you apply of other card. With 15% of your score is length of credit history, your average age of account is not going to drop because your current age is 0 months, on the flip if you wait until year to apply for a new card that your average age will drop from 12 months to 8 months (12+12+0= 24// 24÷3=8).

So if you can manage one card, I don't think opening other card would kill you, BUT it is important that you don't over extended your self as amount owed makes up 30% of your score. In order to maximize this you must maintain your credit utilization under 30% of your total credit availability (in your current case, 30% of $3000 is $900). However to really optimize your score, maintain credit utilize under 10%).

If you do get a third card, that STOP applying after that, and your lock your reports. Now it's time to build your file by paying off your debt on time and managing you utilization rates.

Also here is the Credit Pull Database:
https://ficoforums.myfico.com/t5/General-Credit-Topics/Which-Report-Will-They-Pull-Part-2/td-p/6379773
Got it, but why would I need to lock my reports if I get third card? Is it because that's a bigger drop threshold? If I went that route, when should I unlock it?

There's no requirement to lock or freeze your reports. There's no scoring impact for locking them. Often times some individuals do it as a measure to avoid the quick temptation to freely apply for anything under the sun. More of a discipline or control thing to keep oneself from applying.

I see, but are there pros and cons of getting third one this early vs 6 months vs 12 months so on and so fourth if I kept 6% utilization? From the looks of the analyses, it looks like one should open as many as they possibly can when they started, but that sounds too risky because of the drops per each hard pull.

Re: Should I apply for third credit card with no credit history for building credits?

FinStar — Wed, 30 Nov 2022 03:41:05 GMT

@BK903S wrote:
@FinStar wrote:
@BK903S wrote:
@citymunky Got it, but why would I need to lock my reports if I get third card? Is it because that's a bigger drop threshold? If I went that route, when should I unlock it?

There's no requirement to lock or freeze your reports. There's no scoring impact for locking them. Often times some individuals do it as a measure to avoid the quick temptation to freely apply for anything under the sun. More of a discipline or control thing to keep oneself from applying.
I see, but are there pros and cons of getting third one this early vs 6 months vs 12 months so on and so fourth if I kept 6% utilization? From the looks of the analyses, it looks like one should open as many as they possibly can when they started, but that sounds too risky because of the drops per each hard pull.

Obtaining a third card at this stage would be a personal decision. There's the camp that would suggest gardening for 6-12 months (or perhaps going for the third one around the 6 month timeframe once scores have generated on such a young/thin profile). Then, there's the other school of thought as far as starting out with the 3 desired CCs and build from there provided you're not applying for anything else for a while.

No right or wrong with either approach, it just depends on your tolerance for risk and which lender would be willing to approve you in the absence of any established credit history (or FICO scores) and how many inquiries you are willing to take to get a third account. Also, deciding which CC would be complimentary or benefit what you already have.

Re: Should I apply for third credit card with no credit history for building credits?

BK903S — Wed, 30 Nov 2022 03:57:29 GMT

@FinStar wrote:
@BK903S wrote:
@FinStar wrote:
@BK903S wrote:
@citymunky Got it, but why would I need to lock my reports if I get third card? Is it because that's a bigger drop threshold? If I went that route, when should I unlock it?

There's no requirement to lock or freeze your reports. There's no scoring impact for locking them. Often times some individuals do it as a measure to avoid the quick temptation to freely apply for anything under the sun. More of a discipline or control thing to keep oneself from applying.
I see, but are there pros and cons of getting third one this early vs 6 months vs 12 months so on and so fourth if I kept 6% utilization? From the looks of the analyses, it looks like one should open as many as they possibly can when they started, but that sounds too risky because of the drops per each hard pull.
Obtaining a third card at this stage would be a personal decision. There's the camp that would suggest gardening for 6-12 months (or perhaps going for the third one around the 6 month timeframe once scores have generated on such a young/thin profile). Then, there's the other school of thought as far as starting out with the 3 desired CCs and build from there provided you're not applying for anything else for a while.

No right or wrong with either approach, it just depends on your tolerance for risk and which lender would be willing to approve you in the absence of any established credit history (or FICO scores) and how many inquiries you are willing to take to get a third account. Also, deciding which CC would be complimentary or benefit what you already have.

That makes sense; thank you!

Re: Should I apply for third credit card with no credit history for building credits?

citymunky — Wed, 30 Nov 2022 07:32:53 GMT

Thnaks @FinStar exampling the other school of thought as it relates to waiting 6 months or longer. @BK903S like @FinStar mentioned there is no real right or wrong answer, but it's personal choice. Either way paying on time and staying under the 30% utilization is the best thing you can do as of now. Locking you credit reports doesn't have anything with building your credit, however it is a layer of protection against ID theft, and can prevent someone else from opening an account in your name.

Re: Should I apply for third credit card with no credit history for building credits?

Anonymalous — Wed, 30 Nov 2022 22:27:05 GMT

@citymunky wrote:
Thnaks @FinStar exampling the other school of thought as it relates to waiting 6 months or longer. @BK903S like @FinStar mentioned there is no real right or wrong answer, but it's personal choice. Either way paying on time and staying under the 30% utilization is the best thing you can do as of now. Locking you credit reports doesn't have anything with building your credit, however it is a layer of protection against ID theft, and can prevent someone else from opening an account in your name.

I see the trade off as between credit limits, and front-loading age and having additional lines of credit reporting

A lot of people talk about 3 cards being a magic number, but I don't think that really matters. It's true that's the minimum needed for AZEO, but even if you space out cards every 6 months, you'll still have 3 cards after a year. It's not that long, and delaying a couple months really isn't that important.

But after comparing stories with the other young files on the board (I'm at 18 months), it does appear that having a certain number of lines credit reporting x time does help with approvals. Those of who went slow seem to be getting rejected more. But that could also be subjective; maybe we're just more selective, and picking cards that are harder to get. But average age of accounts (all or just revolving) is an important factor for scoring, and if you get 3 cards at month 0, at the 2 year mark your AAoA will be 2 years. Conversely, if you spread out the cards and only get 1 every year, then by the 2 year mark your AAoA will be half that (24 month old card, 12 month old card, and a 0 month old card).

The downside is the cards you're likely to get at the start are likely to have low CLs, and may be bucketed and hard to grow. The people who apply for tons of cards, even when they're approved, get smaller and smaller limits. So if you spread out the applications, your limits are likely to be much higher. The importance of this varies, depending on the limits you get and your spend. For instance, my first card had (has) a CL of $300. That makes it really hard to use, so I took it a bit slower, and applied for cards from lenders who were more likely to give me higher SLs and CLIs (which worked -- my 2nd card now has a CL of almost $25K). Conversely, with modest spend and a card with a $2,000 limit, someone might take a different path.

I think the best approach is somewhere in the middle. It's okay to apply for a couple cards at once, if you can spread the inquiries between the bureaus, and the lenders aren't the type to close your account if they see you opened 2-3 cards in rapid succession (they'll check -- once you have a relationship with them, lenders will be periodically do soft pull account reviews). It's also good to get some cards early, and let them age together. But it does help with credit limits and approvals to spread things out a bit. Every 3-12 months seems to be a decent minimum for a new file.

Re: Should I apply for third credit card with no credit history for building credits?

SouthJamaica — Thu, 01 Dec 2022 15:05:48 GMT

@BK903S wrote:
I had already applied, got approved for both Amex and Discover this month, and activated both cards. Credit Karma alerted me that Amex did a hard pull, and I cannot find pull information on Discover. Should I apply for a third card as a beginner this early to build credits? I had no loans, and my credit reports looked empty from all three credit bureaus.

It's great that you got both cards as a beginner. I would take that as a win, and refrain from any new applications for a while. I would wait at least 3 months, and maybe more, depending on how your scores look. When it's time for a new card, go for either a Mastercard or a Visa.

Don't worry about your credit reports looking empty. I wish mine looked empty.

Re: Should I apply for third credit card with no credit history for building credits?

BK903S — Thu, 01 Dec 2022 16:51:10 GMT

@SouthJamaica wrote:
@BK903S wrote:
I had already applied, got approved for both Amex and Discover this month, and activated both cards. Credit Karma alerted me that Amex did a hard pull, and I cannot find pull information on Discover. Should I apply for a third card as a beginner this early to build credits? I had no loans, and my credit reports looked empty from all three credit bureaus.
It's great that you got both cards as a beginner. I would take that as a win, and refrain from any new applications for a while. I would wait at least 3 months, and maybe more, depending on how your scores look. When it's time for a new card, go for either a Mastercard or a Visa.

Don't worry about your credit reports looking empty. I wish mine looked empty.

I got approved for another Visa credit card at BoA yesterday with a 2.5K credit limit, which I have banked with for ten years. Because of that, I have two hard pulls on TransUnion and one hard pull on Experian. I am all set for now and will see what additional card is needed to cover my spending better, Costco vs Amazon, for at least a year or two. However, all three cashback cards are already good enough to cover my current needs since I often shop outside Costco and Amazon. I may sit with three cards for a few years if that still applies.

Re: Should I apply for third credit card with no credit history for building credits?

Duriel — Thu, 01 Dec 2022 19:57:52 GMT

@citymunky wrote:
Discover would have pulled your report from Experian which Credit Karma doesn't monitor only TransUnion and Equifax, but they display your VantageScore 3, not your FICO 8.

If you want to monitor one of your FICO 8 scores for free, download the Experian phone

Amex will provide OP with EX8 and discover will provide TU8.

Re: Should I apply for third credit card with no credit history for building credits?

SouthJamaica — Thu, 01 Dec 2022 21:18:03 GMT

@BK903S wrote:
@SouthJamaica wrote:
@BK903S wrote:
I had already applied, got approved for both Amex and Discover this month, and activated both cards. Credit Karma alerted me that Amex did a hard pull, and I cannot find pull information on Discover. Should I apply for a third card as a beginner this early to build credits? I had no loans, and my credit reports looked empty from all three credit bureaus.
It's great that you got both cards as a beginner. I would take that as a win, and refrain from any new applications for a while. I would wait at least 3 months, and maybe more, depending on how your scores look. When it's time for a new card, go for either a Mastercard or a Visa.

Don't worry about your credit reports looking empty. I wish mine looked empty.
I got approved for another Visa credit card at BoA yesterday with a 2.5K credit limit, which I have banked with for ten years. Because of that, I have two hard pulls on TransUnion and one hard pull on Experian. I am all set for now and will see what additional card is needed to cover my spending better, Costco vs Amazon, for at least a year or two. However, all three cashback cards are already good enough to cover my current needs since I often shop outside Costco and Amazon. I may sit with three cards for a few years if that still applies.

Congratulations. Sounds like a good plan.

Re: Should I apply for third credit card with no credit history for building credits?

FinStar — Fri, 02 Dec 2022 04:45:34 GMT

As the OP has been approved, this thread is now locked and closed to new messages.

Congrats on the BoA approval @BK903S.