Credit Cards and where I should go from here -- question

[cmm89]

Hi all,

Brand new to the community here. This forum has been extremely helpful as I pull myself from low 500's scores into mid-to-high 600's and beyond over the last 8 months. I was in default on my student loans, but as of May 1st, they are now back with their original servicer. All 3 bureaus' FICO scores jumped 80 points -- extremely excited about that! I'm 27 years old and make about $60K per year... student loans and a $6K car loan are all that I have other than small revolving balances that I PIF every 2 weeks.

I've been approved for a few cards -- AmEx (CRE $500 CL), Discover IT ($1,200 CL), BankAmericard Travel Rewards ($3,700 -- I bank with them and am a Platinum Honors Plus client, $100K+ with ML) and Chase Freedom Unlimited ($1,500 CL) -- all over the last month or so. I had started with a $200 secured Citi Card in August of last year and I PIF'd every week. After a few months, CapitalOne extended me a $300 Platinum card. I'm still within the 6 month period for them so they won't even process an application. Both of those cards are now PIF and shelved because they don't offer rewards.

Are there any other credit card companies you would suggest app'ing to while I'm on a little spree? I want to have all these inquiries fall off at right about the same time next year, or the following, because the next move is to buy a condo well within my budget.

All advice is appreciated. There's so much knowledge on this forum!  

EDIT: I know this sounds picky, but I'd like to stay away from the incredibly subprime banks (CreditOne, etc). If I have to stay where I'm at, I'd rather do that.

[Anonymous]

With 4 new cards in the last month, I'd go ahead and garden for a while. I wouldn't want to spook your new creditors by getting too many cards in a short amount of time.

You've been approved for cards that will grow with you nicely. I think you'll find yourself with plenty of credit the whole way through until after your home purchase.

[cmm89]

Thanks for the advice, SteelerNYC. I've thought about that as well.

I'm such a bad gardener with this new found credit of mine... too impatient. Guess I'll have to learn! I definitely don't want any of the cards issued to me AA'd or rescinded.

[Anonymous]

One of the most important steps in reducing the risk of AA is long term gardening.  The higher your AAoA is, the less effect possibly derogatory things will have on your likelihood of AA.

People with very high AAoAs (6+ years) can even run high balances for one month without a major FICO ding and AA worries.  If your AAoA is under 6 years, you are at a higher risk of AA because things like new inquiries or single high account utilizations have a much more pronounced effect on FICO than for folks who have a very long credit history.

[cmm89]

Message received loud and clear. Hold on to these bad boys for a while!

No more Apps for me.

[Anonymous]

One thing you may want to do is create an AAoA spreadsheet with a forecast.  In my spreadsheet link in my sig I have one you can use or adapt.

This way, when you are considering applying for a new account, add it first to the spreadsheet and manually adjust the month/year and see how it affects your AAoA.

If you have an AAoA of 2 years 11 months right now, applying for a new card will keep you in the 24-35 month scorecard for sure.  But maybe waiting 3-4 (or more) months might first bump you into the 36-47 month scorecard (FICO boost) and the new account posting may still keep you above 36 months.  This has an  immediate and long term benefit of not screwing up your AAoA scorecard "bucket".

[cmm89]

I did forget to mention that I have a closed Macy's Store Card that was in good standing from 9 years ago. How would I be able to tell if that's considered part of my AAoA or not? Obviously that would be a huge help. Regardless, I need to let these newly extended lines of credit mature for a while.

[Anonymous]

The only way to tell is to use a credit report monitoring company that reports to you what they think your AAoA is, and then use an AAoA spreadsheet to see if you can calculate the identical one and see what accounts show up on it.

Note that all of my credit monitoring sites are a little different because not all of them include every account, unfortunately.  MyFico and CCT are likely the most accurate for this purpose.  On my CRs, all of my 3 are different in AAoA because of how an old 11 year old account reports or doesn't report.

That 9 year old account should be helping but it will drop off sooner rather than later so be aware that once it drops off, your AAoA may plummet, which is why gardening MAY help.  Also note that any accounts received through soft pulls will still lower AAoA so those folks who did SCT across a lot of cards have have plummeted any old AAoA they may have had.

On the flip side, if you have a thin new file overall, applying for new accounts won't hurt much and it will allow many accounts to age together nicely so that future new accounts don't hurt as much.

[cmm89]

I've noticed that. I have about 15 inquiries on my Experian profile from the last 2 years and it isn't really dinging me anymore. All the score simulators are also saying that by getting new lines of credit, my FICO scores should go up. That's why I'm kind of in this mode to get as much credit extended to me as possible. That said, going from an available credit maximum of $500 (Citi secured + Cap1 Plat) to $7,400 (including Citi/Cap1--benched, AmEx, BoA, Chase, Discover), should allow me to very easily keep my utilization below 10%, and WELL under the 30% benchmark.

You've been exceptionally helpful. Thanks!

[Anonymous]

Sure thing!

Just keep in mind that there may also be reasons why AAoA doesn't matter to you at all right now and why app sprees may make more sense to do with an overall young file than any other.  If you want a really crazy thick file in 7 years (say you're 19 years old and won't apply for a loan or mortgage until you're 26), then app spree away and in 6 years your file will be crazy well seasoned.

Otherwise, work hard to track your AAoA long term and then calculate/estimate what a new account might do to it.  It makes sense to do this as it can help you later with CLIs and new CC approvals if you're aware of what a new account will do to the scorecard you're in.