topic Re: Taking strategic hits(hardpull) on your credit score to improve overall credit. in General Credit Topics

Taking strategic hits(hardpull) on your credit score to improve overall credit.

RED_Knives — Sun, 16 Feb 2014 07:32:20 GMT

let me know if theres any holes in this kind of thinking.

So with such a small credit limit as is, 2750 total. would it be worth it to take a number of hard pulls on new CC applications to improve my overall CC limit? I will take soft pulls when possible but is there any reason I shouldnt try to improve my overall credit limit if my credit score at this point doesn't matter(since im not making any major purchasing decisions). I wont be applying for a house in the next year, I figured if I apply for a new cc now I could bounce back later?

The way I see it is if I take a number of hard hits now I wont have to do them later for instance like when I might actually need my credit score to be high(future). As of now my credit score is a low 669, would it be worth it to just see what my max potential for improveing my overal Credit limits now are or should I wait for my score to improve?

I'm trying to see what will matter more in the future and what I should do now. Stay silent and let the Credit score rise over time with on time payments, maybe one installment loan, ect. or apply now and actively every other month try to get a new CC to increase over CL and Utilz.

I'm aware my score gets lowered with each hard pull inquirey but to what extent does this effect my future. maybe this is too broad of a question.

Re: Taking strategic hits(hardpull) on your credit score to improve overall credit.

Revelate — Sun, 16 Feb 2014 08:21:53 GMT

I think you've created a black and white scenario when the reality is the credit market is shades of grey. I'm one of the vocal proponents here that if you don't use your credit report it's worthless; however, it very much depends what your current tradelines look like to make the determination as to whether to take the shot now or later.

Waiting siliently as you suggest doesn't lead to results: take an active role in building your credit, but on the other hand taking a swing every month is frankly a bad receipe for building a credit profile and will do more harm than good over the short term and perhaps mid-term as well (opportunity cost). Get your inquiries over and done with in a clustered spree and then sit on your hands for a year is a much better strategy FICO-wise when it comes to the initial 2 or maybe 3 stages of building a credit report.

I think everyone *should* plan their credit building and hence their inquiry distribution with some care, as applying for random cards is simply not recommended: reducing utilization can be handled in other ways by anyone who doesn't have a negative savings rate which most folks currently don't according to the economic data over the last year or so.

Figure out what your end-game in terms of credit cards (bearing in mind the market does change) and lenders, and then develop a plan to reach those: there's plenty of people in the CC forum here in particular which can assist in that. For myself, I absolutely targetted a few lenders specifically for building higher limits in the future, namely Amex, a single GECRB store card, and a couple of CU memberships when I didn't have anything else going on with my credit report... in addition to some silly secured card games which I did as well when I was first establishing my credit.

Re: Taking strategic hits(hardpull) on your credit score to improve overall credit.

RED_Knives — Sun, 16 Feb 2014 09:59:33 GMT

So I will acquire maybe one more card and sit tight for a bit. I just can't help but think there's more info out there. And if only I had this info in my hands. I'll start by reading everything threads have to offer so I don't need to make inferior threads that keep asking the same questions. I see AMEX as a common trend among card holders they must have something special? I'll take a look now about them. Never herd of GECRB? and yes haven't checked out credit unions yet but I herd they have some decent deals as they are dieing for customers.

I have been considering secured cards but I wasn't sure if they where a good idea as it seemed they where for the absolute introductory credit building tactic and that maybe i was above that? Guess not. I have been trying to find reasons to get a secured loan, I think I found one.

It turns out I need to get some new tires for my car as there about to pop, the 500-600 dollar amount should be a small starting point for my installment loan but may be a good starting point. I wonder what else I should get installment loan wise.

On a side note I was very surprised when I went to my bank to get a CC about a year ago, they asked for a 200 dollar deposit on a secured card and it surprised me I needed one from my own bank!!! I wonder if they would treat me differently and if they don't if I should just do the secured loan, might as well right? If i start small I should be able to work my way up.

Re: Taking strategic hits(hardpull) on your credit score to improve overall credit.

Anonymous — Sun, 16 Feb 2014 12:46:04 GMT

There's a distinction to be made between (1) getting more CCs, and (2) increasing overall CLs.

In my experience it's more valuable to have fewer CCs with higher CLs, rather than more CCs with lower CLs.

Also, if you want to improve CLs quickly, I'd take a hard look at the CU angle, since they are known to be generous with CLs, and also tend to have low APRs and fees.

Re: Taking strategic hits(hardpull) on your credit score to improve overall credit.

RED_Knives — Sun, 16 Feb 2014 12:49:10 GMT

I'll take a look at my local CU this morning. any specific preferences or things to know about before going to cu?

Re: Taking strategic hits(hardpull) on your credit score to improve overall credit.

Revelate — Sun, 16 Feb 2014 17:59:18 GMT

@RED_Knives wrote:
I'll take a look at my local CU this morning. any specific preferences or things to know about before going to cu?

See what Google has to say about them for user reviews and what not; beyond that nothing really. If you can find a size of assets list that can be helpful but I look for that more in remote CU's than local ones. Personally I'd recommend getting at least one local CU, rest remote no problem but occasionally face-to-face interaction when you're asking for a favor can get you over a hump you might not be able to vault over otherwise.

Re: Taking strategic hits(hardpull) on your credit score to improve overall credit.

Revelate — Sun, 16 Feb 2014 18:11:26 GMT

GECRB is (was, think they spun it out to some possibly new name) GE Capital Retail Bank: they underwrite a tremendous number of store cards.

The reason why Amex and GE are useful for building high limits is they both have astonishingly good SP CLI policies (check the CC forum for more details, especially the Amex 3X CLI thread): for me trying to obtain a mortgage, getting a few lenders which I can increase my lines on vis a vis putting lipstick on my pig while keeping a clean sheet in the long run-up to a mortgage for me is a huge benefit. Also Walmart which I used out of GE's list of store cards offered a freebie FICO score, there are now other lenders which do that too though none of them are in my portfolio.

Amex also gets a lot of love for their backdating policies; additionally the forum preaches PIF to everyone who comes through, and Amex anecdotally likes people who PIF so it's a good match. Plus they have competitive rewards cards which arguably is the most important thing long term.

Re: Taking strategic hits(hardpull) on your credit score to improve overall credit.

bearze34 — Sun, 16 Feb 2014 18:35:14 GMT

What I have learned is that it is ok to get a few cards and maybe a car loan or a credit line if there is a point to it. I have a Discover It with 6k limit that I pay my bills on. I also have a Wally Discover, Paypal Mastercard and Barclaycard. I pay them all off each month save for a few hundred on Discover but since our two cars are paid off and I am in gardening/save mode using my cards is an exercise that is more of a hobby as far as credit score goes. I rarely don my Centurion or Palladium card....lol. But, Firestone did just send me free roadside assistance for a year. Their little card is all right.....5% off bill, 6 mos. same as cash, constand coupons now free roadside for 12 mos.

Re: Taking strategic hits(hardpull) on your credit score to improve overall credit.

takeshi74 — Mon, 17 Feb 2014 15:32:51 GMT

@RED_Knives wrote:
So with such a small credit limit as is, 2750 total. would it be worth it to take a number of hard pulls on new CC applications to improve my overall CC limit?

I'd say it's not just a matter of credit limit. As always, it's about one's credit versus the creditor's criteria. If you're not averse to HP's and/or suspect that your credit supports higher limits then it may be worth it. If you're HP averse or know that your credit is weak then it may not be worth it. Keep in mind that worth is always highly subjective regardless of topic.

@RED_Knives wrote:
The way I see it is if I take a number of hard hits now I wont have to do them later for instance like when I might actually need my credit score to be high(future).

Generally speaking, weaker credit profiles are impacted more by hard pulls than stronger credit profiles. The danger with your take is that you're just randomly applying and hoping for the best. You have to monitor trends in your credit and approvals instead of fixating on a single variable.

@RED_Knives wrote:
I see AMEX as a common trend among card holders they must have something special?

It's a mix of perception/prestige, customer service, backdating, 3x CLI, etc. Don't just assume that they're special and, same as any other creditor/product, determine their specific usefulness to you. To me, backdating alone is beneficial. I think I mentioned this in one of your other threads but I added two new AmEx cards last year and both report as 16 year old tradelines.

@RED_Knives wrote:
I just can't help but think there's more info out there.

There's a lot of information out there. Some of it reliable. Some of it dubious. You're just starting out and there's a learning curve. Expect to put some time into sorting it out. Plenty of us who have put in much more time are still sorting it all out.

Re: Taking strategic hits(hardpull) on your credit score to improve overall credit.

RED_Knives — Tue, 18 Feb 2014 12:32:27 GMT

Thanks for everyone who replied so far! Much appreciated. I will monitor what my score does over time. I will check every month to see how it changes than try to calculate what was the cause.

I have applied for 3 credit cards, bill me later because I use paypal a lot and because they sent me a pre approved email and I applied in the past and actually got denied but not today! just my luck.

A best buy rewards card that should still be coming and a target credit card because i shop there a lot. The pattern I'm seeing here is get cards you will actually use that will be beneficial. out of the 3 cards I got the best buy one is probably the least beneficial one.

Interesting thing about that, I didn't even know it was a credit card tell the cashier asked for my income and since we where already half way through sign up I figured why not if I get denied at least I will know not to try again for a while.

if your pre approved, and you accept there offer is that still considered a hard pull because you accepted the offer and now they have to triple check by getting more information? I know you meet some kind of minimal standards and that they probably did a soft inquiry before hand but still...

so last month my score was 669, I invite you to guess what my score will be based on the knowledge that I applied to three different cards. Things to consider, I did a PIF a bill that was hovering in my account for 2 months now thats gone, and my overall util is down. What do you guys think my current score will be? I will check next month and let you know. This should give me a good understanding of how badly I messed up by applying for potentially too many cards.

My guess is I will go down 3-6points, while I did do lots of inquires(new credit). a few good things happened the pif(amount owed decreased), higher utilization plus an added month to my already small 7 month history.