topic Re: Specific question about opening credit cards in Credit Cards

Specific question about opening credit cards

Anonymous — Wed, 26 Dec 2007 03:48:59 GMT

First let me say at the outset that I have a great credit rating, credit card payment history, etc.... My question is as follows: There have been many solicitations from credit card companies with attractive sing up bonuses. Now I know that when I apply and get approved from them there is a temporary drop in my credit rating because it was an inquiry. I also know that there can be credit rating reductions for opening closing accounts. Example - lets say I open up 5 accounts, take advantage of the signing bonuses and then leave the accounts dormant..what are the consequences on the FICO score? Example 2 - I open 5 accounts, take advantage of signing bonuses and then close accounts - what is effect I am grateful for your help.....

Re: Specific question about opening credit cards

Anonymous — Wed, 26 Dec 2007 06:24:46 GMT

Opening 5 account in a short amount of time - IMO has the following downsides

Shortens avg age of accounts
Points for INQ's
Short term point loss for new account-get hit again by FICO if too many accounts are opened in a year.

Some of your other CCC's may get upset and change terms-

Upside- Better terms
Increased available credit

I would not completely leave accounts dormant- touch them every 6 months unless you are using them for 0% BT's - touch them every 6 months after the bt offer is over.

Re: Specific question about opening credit cards

heirophant — Wed, 26 Dec 2007 06:39:45 GMT

How many new accounts in a year is too many according to FICO?

Re: Specific question about opening credit cards

Anonymous — Wed, 26 Dec 2007 06:41:44 GMT

I think it started yelling at 7-
But everyone is different.

Re: Specific question about opening credit cards

heirophant — Wed, 26 Dec 2007 06:58:28 GMT

I heard that the higher your credit score is to begin with, the greater the impact of new accounts on your FICO. Is that true?

Re: Specific question about opening credit cards

Red1Blue — Wed, 26 Dec 2007 07:53:17 GMT

I opened 16 accounts this year and got some baddies out. My score went from 559 to 651 on EQ.

Re: Specific question about opening credit cards

ccaddict — Wed, 26 Dec 2007 08:11:21 GMT

@Red1Blue wrote:
I opened 16 accounts this year and got some baddies out. My score went from 559 to 651 on EQ.

Wow! I thought my 5 were too many lol

Re: Specific question about opening credit cards

heirophant — Wed, 26 Dec 2007 10:28:51 GMT

concorduser wrote:

I opened 16 accounts this year and got some baddies out. My score went from 559 to 651 on EQ.

They aren't all revolving credit, though, I am assuming. What kind of mix is this?

Re: Specific question about opening credit cards

haulingthescoreup — Wed, 26 Dec 2007 12:29:44 GMT

@heirophant wrote:

I heard that the higher your credit score is to begin with, the greater the impact of new accounts on your FICO. Is that true?

Yep! The higher it is, the more it can fall.

My scores aren't particularly high, but I am in a bucket with long-term, high scoring consumers. One inq per CRA wasn't that bad, but I had a flag when I had two on EQ.

Re: Specific question about opening credit cards

haulingthescoreup — Wed, 26 Dec 2007 12:31:53 GMT

@Red1Blue wrote:

I opened 16 accounts this year and got some baddies out. My score went from 559 to 651 on EQ.

You're probably in a score bucket where it is expected behavior that you are opening new accounts, so you don't get penalized severely. Also, getting off those baddies helped you out.

Re: Specific question about opening credit cards

Anonymous — Wed, 26 Dec 2007 13:42:03 GMT

I added 12 accounts
Closed 7
From May 07 to Dec 07.