Please advise for the further plan of actions.

[Paranoid]

Hello everybody. Could you please advise me the optimal further plan of actions. I'm new to the US credit system and just started my way.

In January 2016, I opened my first security credit card BoA (Bank Americard) with a CL of $300. I almost every day made purchases through the card and paid the debt. A year later, the bank increased my CL to 1600 and returned the security deposit.

In October 2017 I opened the BoA Cash Reward card with a CL of $3200. (Later in the letter, I received my credit score: 781 Experian).

I decided not to close the old card (Bank Americard) and transferred a portion of the credit limit from it. As a result, I had a CL of $4400 (Cash Rewards) + $400 (Bank Americard).

10 days ago I decided to apply for another credit card -- CITI Double Cash. I did it online and was instantly approved for a CL of $4000. (The letter listed my credit score: 728 Experian. I still wonder why it could fall like that. Perhaps because having received new CL of $4400 I no longer paid the debt every day like I did before and the utilization reached 15-20%, but is it really only because of this?..)

After reading the messages here that it is possible to apply for the CLI immediately after activating the card, I did it, requesting $15000. As a result, I was refused (with HP made to Experian). The letter from them said: "We reviewed your request, and unfortunately, we can’t approve it because your account hasn’t been open long enough. However, we may reconsider your request after your account has been open for at least six months."

 Before applying for CITI DC my FICO 8 by TU was 745 (I see it in my BoA app). FICO 8 by EX probably is about 728. Also Experian report shows that right now I have 3 HP for last 6 month (2 HP for opening two last cards and 1 for CLI).

 Now I'm thinking about what to do next. Just wait? Or I still can try to apply for a new CC? I would like to increase my CL. I consider Discover it, AMEX Blue Cash Everyday or Amazon Chase.

Thank you in advance for any advice!

[mkhan1093]

I think you're in pretty good shape actually to apply for some more. I've been approved with double-digit inquiries. You could add on 2 or 3 more and then hit the garden for a couple of months.

[Paranoid]

Well, thank you, I just repeatedly found the information that it's highly not recommended to open several cards at the same time and everyone needs to wait at least a few months between the applications.

Then such question - as I understand that I have 3 hard pulls only to Experian. Is there any probability that another bank will make a request to another bureau and will see 0 inqueries in the history? Or it works in a different way?

Which cards should I pay attention with addition to mine? I am not intrested in travel or miles. Only interested in cashback from purchases - food, gas, Amazon and so on. Which cards are the best in 2018? There are so many proposals to sort out quickly.

[thornback]

Inquiries are no longer factored into your FICO score after 1 year; but they remain on your reports for 2 years.   Each creditor has their own policy when it comes to which bureau they pull for your reports.  Some only pull one or two, others pull all three.   If they only pull Experian, they will only see the inquiries on Experian; if they pull all 3, they will see the inquiries listed on all three.  You can always call the creditor before applying and ask which bureau they pull for residents in your state, then decide whether or not to app based on the number of inquiries you have showing on that bureau's report.

 Your FICO score dropped due to the number of inquiries (each can drop your score 2-5 points) and the reduction in your Average Age of Accounts (AAoA).  

FYI:  FICO ages your accounts on the 1st of every month.  All account ages start at 0.  So if you got a card on Jan. 31, 2018, the account open date will be considered as Jan. 1 and the age would be 0; on Feb 1st, the age would increase to be 1 month.  The following is based on the info provided in your post.

When you applied for your second card,  your first card was 22 months old (1 year, 10 months).  Once you added the second card, your AAoA was reduced from 22 months to 11 months (22 + 0 = 22 months /2 cards  = 11).   You also incurred a new account penalty as FICO considers an account as no longer "new" after 1 year. 

In January 2018,  your first card was 24 months old and your second was 3 months old;  so your AAoA was 13.5 months  (24 +3 = 27 months / 2 cards = 13.5).  Adding the third card reduced your AAoA to 9 months  (24 + 3 + 0 = 27 / 3 cards = 9).    Your AAoA dipped below 1 year again and this is why your scores dropped. 

Your current AAoA is 10 months (25 + 4 + 1 = 30/ 3 = 10).  Still under 1 year.

As for getting new cards -- you can; but keep in mind that doing so will drop your AAoA further.  If you got a new card today, your AAoA would be 7.5 months (25+4+1+0 = 30 months /4 cards = 7.5).     You could get one or two new cards now, then STOP and let them age. 

OR, If you wait 6 months, your AAoA would be 16 months (31+10+7 = 48 months / 3 cards = 16). 

And after adding the fourth card, the AAoA would be 12 months. (31+10+7+0 = 48 months/4 cards = 12).   Not too much of a FICO hit and your AAoA would still be exacty 1 year. 

Also consider this -> low credit limit approvals should be expected because of your short account history and recency new accounts.   Creditors like to see at least a 6+ mos. history for each card.  Too many new accounts in a short amount of time is a red flag and often seen as risky - so even if your FICO score is good, you could be declined, or approved but started off with a lower limit than you would be granted with a longer credit history.   This is why folks recommend waiting a few months between apps. 

Your 15-20% utilization also didn't help, though it probably only dropped your score a few points.   Keeping utilization under 8.9% on each individual card, and overall, is ideal as it will keep you from losing FICO points.  To do so, simply pay your card balances down before the statement dates (before they report to the burueas), then pay the remaining balance before your due date.   You have a young file - so every little thing counts. 

If I were you, I'd wait 6 months to a year; let the new accounts age so you can get the cards you want, at the limits you want.   But, of course, ultimately, the choice is yours and your score will rebound over time either way. 

[Starting_Over2013]

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wrote:

Well, thank you, I just repeatedly found the information that it's highly not recommended to open several cards at the same time and everyone needs to wait at least a few months between the applications.

Then such question - as I understand that I have 3 hard pulls only to Experian. Is there any probability that another bank will make a request to another bureau and will see 0 inqueries in the history? Or it works in a different way?

Which cards should I pay attention with addition to mine? I am not intrested in travel or miles. Only interested in cashback from purchases - food, gas, Amazon and so on. Which cards are the best in 2018? There are so many proposals to sort out quickly.

I've found the US Bank Cash + card to be awesome for rewards so far! For new accounts, US Bank has pulled Trans Union for me. You can use the pre-qualification tool here: https://www.usbank.com/credit-cards.html

The US Bank pre-qualification tool seems to be pretty accurate in my experience. 

As far as other banks go, here is the data I have personally experienced:

Discover - ALL 3 CREDIT BUREAUS

Capital One - ALL 3 CREDIT BUREAUS

AMEX - EXPERIAN

Chase - TRANS UNION & EXPERIAN

Barclay - TRANS UNION

I agree that you could probably add a couple of cards without too much of an impact. Additional credit will help your utilization (so long as you don't add too much in balances!) and your AAOA will improve in time. 

[Paranoid]

tmr, thank you very much! I did not expect to see such a detailed and exhaustive answer!

I have two questions:

The first one is about the utilization. I also read that a good choice is to pay the balance to zero before the date of the statement on all cards except one. For example, I have three cards with a CL of $1000, $1000, $1000. And I have two options:

Option 1: figures in the statements will be $89, $89, $89;

Option 2: $0, $267, $0.

Are these two options are equal for FICO calculations or there is preferable one?

The second question is that my BankAmericard card is completely uninteresting for me, there is no cash back or any reward. Can I not use it at all, or should I use it at least once in a month?

[HeavenOhio]

Option 2 is likely the better one. With three cards, two reporting zero and one reporting a small balance is best. The general wisdom is that 28.9% on one card is OK as long as your overall utilization is at 8.9% or below. Some profiles see score dings at lower percentages, though. If you're about to apply for important credit, I'd go lower. Or better yet, report a very small balance on one card, then increase that amount the following month to see what you can get away with.

You don't have to use your boring card every month, but I wouldn't go longer than six months without using it.

[Paranoid]

 Starting_Over2013, I am looking for maximum cashback for groceries. Right now I have constant 2 % cash back for it. That's why I thought about AMEX BCE or Discover It or Chase Freedom. But I am still looking, maybe there are better options?

[Paranoid]

 HeavenOhio, thank you so much! Very valuable information for me.

[Paranoid]

I also have another question, please. How far can I go in the credit limit? The question raised when I saw the index 'High balance' in the credit report, which, as I understand, shows the maximum historical debt for each account.

If I approach the credit limit, but I pay the balance to zero (or 8.9 % on the single selected card) before the statement date, does it have negative consequences? Or on the contrary it's good that I show that I actively use the cards. Which algorithm of actions is best here?

Thank you!