How many cards trigger a warning to lenders?

Anonymous · ‎11-22-2017

Not sure if this is best suited for the rebuild forum or credit cards, feel free to move if desired.

I am in the process of purchasing a house and will close on it in January. Once I close, I would really like to get some new/better credit cards with higher limits. I currently have two rebuilder cards (Capital One QS1 and Credit one which I want to close as soon as I have closed on the house) with a measly $1600 limit between the two. I have a few store cards as well. I am pre-qualified for a Discover and Amex and am hoping for better limits on them, or at least something that will grow to a higher limit. I would also like to get a Lowe's or Home Depot card as I will probably be spending quite a bit of money there once I am a homeowner. However, I don't want to get these cards and then one of the issuers gets scared by me opening too many cards and closes the card immediately. Is there a safe number of cards to open in a short amount of time? I'm really just looking to get these three cards and close Credit One. Are they more understanding knowing that I have a new mortgage? Does it look bad to app for them all on the same day or should I spread them out?

To be clear, I am not looking to charge all of my new purchases on the cards, so they won't have super high utilization or anything like that. I will have the money to buy my new furniture with cash, but if I can put it on a card and get some reward $ back, I am certainly not opposed to that either!

Anonymous · ‎11-22-2017

It really depends on the lender to be honest. In your situation, opening three new cards at once (Amex, Discover and Home Depot) should not trigger any problems.

It is usually the people that go on huge app sprees (5-10 new accounts) that suffer issues. At the bank I used to work at, if they did not catch an app spree during the application process (the new accounts had not posted yet and or the HP inquiries were not all showing on one bureau) they would certainly see a decline in the monthly score and would review the account to see if there was any fraud etc going on and would often close an account if someone was seen as agressively acquiring new credit.

Again, in your situation, three new cards is nothing and you should not have any trouble.

Viva-LV · ‎11-22-2017

@Anonymous wrote:
It really depends on the lender to be honest. In your situation, opening three new cards at once (Amex, Discover and Home Depot) should not trigger any problems.

It is usually the people that go on huge app sprees (5-10 new accounts) that suffer issues. At the bank I used to work at, if they did not catch an app spree during the application process (the new accounts had not posted yet and or the HP inquiries were not all showing on one bureau) they would certainly see a decline in the monthly score and would review the account to see if there was any fraud etc going on and would often close an account if someone was seen as agressively acquiring new credit.

Again, in your situation, three new cards is nothing and you should not have any trouble.

+1! Three new cards, after you close on house (congrats!), is nothing. They will grow, unlike Credit One (what a turd!).

Anonymous · ‎11-22-2017

The answer to the question here really depends on the credit profile we're talking about. Everything in the world of credit is very profile-specific and this is no exception.

If you take someone that has a rock solid credit profile that's thick/aged and they have 800+ scores, there's probably almost no limit to how many cards they could open in a short period of time. The weaker a profile gets, the answer to this question then changes. The OP looks to have fair credit scores in the mid 600's. IMO, I'd be cautious with those "on the cusp" type scores. Keep in mind that opening say 3 new credit cards will likely drop your scores 20-30 points, ballpark. You're taking on those new inquiries, dropping your AoYA to 0 months and possibly dropping your AAoA across a threshold. In taking on that score drop, you're putting yourself into a "worse" position and one that could make lenders uneasy. Chances are if they approve you and you're in you're in, so the odds of anything adverse happening at that point are slim... but when your scores are where they are you do have to proceed with more caution than someone that has a rock solid profile.

Anonymous · ‎11-22-2017

Don't even think about a new card til the day after closing. I have said it before and I will say it again some lenders will pull last minute credit upto the all the parties leave the closing room. I have seen lenders cancel the loan at the table because some one bought something new or got a new card on the day of the closing. Which do you want a new card or new house?

Anonymous · ‎11-22-2017

I don't think the OP suggested apping for anything prior to closing on the house. He said he was looking to do a potential spree afterwards.

Anonymous · ‎11-24-2017

Definitely waiting until after I have closed on the house to app for any new cards.

I think I have enough pulls on my profile currently that the scores won't move from that, or at least they didn't with the last pull for my mortgage. It will take my AOYA to 0, but at that point my youngest will only be 7 months, so not a huge change there. My AAOA will drop, but not below a threshold, so I think the damage will be minimal. Honestly, though once I have the house and new cards, I don't see myself apping for anything new anytime soon, so into the garden I will go!

K-in-Boston · ‎11-24-2017

A few cards would be fine after closing. I would highly suggest the Lowe’s card over the Home Depot card. Better promotional financing if you want it, or always 5% if you don’t use the financing. Much easier to grow, and all with soft pulls. And the underwriting with Synchrony will be a lower threshold than with Citi for the Home Depot card.

marty56 · ‎11-25-2017

@Anonymous wrote:

To be clear, I am not looking to charge all of my new purchases on the cards, so they won't have super high utilization or anything like that. I will have the money to buy my new furniture with cash, but if I can put it on a card and get some reward $ back, I am certainly not opposed to that either!

IMHO then don't open any new cards for a year. The offers will come to you or your existing cards may raise your CL.

1/25/2021: FICO 850 EQ 848 TU 847 EX

Gmood1 · ‎11-25-2017

Nah, go ahead and get them out the way so they can grow old together.
Charge EVERY thing to those cards. Leave the cash in the bank.
My situation was similar to yours just 3 short years ago when I bought my home. I had maybe 5 accounts on my CBs reporting and not all of them active. Back then any INQ or new account made my scores plummet.
Now I can add and drop them at will, with in most cases zero affect. Don't worry about AAoA and all that jazz.
Get them, use them and watch them grow. AAoA changes are temporary as is INQs. The affects aren't for life. Look at it as a long term game..not a short one. Scores are only one small factor, certainly not the only determining factor in obtaining credit.