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How to Add More Credit Accounts Wisely

Your FICO® Scores can impact your loan interest rates, terms, approvals and more.
Valued Member

How to Add More Credit Accounts Wisely

My FICO scores are in the low 700's, which is nothing to complain about, but like everyone here I want to achieve the highest scores possible.

 

A significant factor influencing my scores is the fact that I have few active credit accounts. I recently applied and was approved for a Citi Double Cash Card with a $4,900 credit limit. That added substantially to my available credit. I would like to apply for one more credit card but not sure when to do this. How long should I wait before I apply for my next credit card?

23 REPLIES 23
Valued Contributor

Re: How to Add More Credit Accounts Wisely

There is no one formula, keep in mind people can achieve over 800s with 3 credit cards and one loan. If you are not going to do spree, and not tempted by signup bonuses here there everywhere not a bad idea thinking long term to just get one now and let it grow. If you still want to shop for one if you take a long time to do it you are still building months of history with what you already have. Can't go wrong either way.
Open one, close three. Open one, close three.
Message 2 of 24
Established Contributor

Re: How to Add More Credit Accounts Wisely


@BulldogX wrote:

My FICO scores are in the low 700's, which is nothing to complain about, but like everyone here I want to achieve the highest scores possible.

 

A significant factor influencing my scores is the fact that I have few active credit accounts. I recently applied and was approved for a Citi Double Cash Card with a $4,900 credit limit. That added substantially to my available credit. I would like to apply for one more credit card but not sure when to do this. How long should I wait before I apply for my next credit card?


 I predict two schools of thought in the responses you may get...

 

1)  It depends on what the other card you want is.  Some banks are more sensitive to multiple inquiries/new accounts in a short period of time.  If you don't have many recent inquiries besides that Citi card you just got, you should *probably* be fine with just about anything.  Unless you bump into the 5/24 rule with Chase.  Assuming you don't carry (much of) a balance, the bump in available credit should help your score.

 

2)  Do it now and get it over with, so all your new accounts and inquiries can start aging at the same time.

 

I'll add one from my personal opinion...

 

3)  Are you going to be looking to buy a house or  a car in the near future?  If not, then your score doesn't really matter (within reason) right now.  Let the Citi age for 12 months, then apply for another card.

 

 What's your current card lineup?  Any other loans?  Giving us that info will help the gurus here tailor a better reply to your particular profile.

Venture: $21K | Amex ED: $18K | Amex BCE: $15K | NFCU CR: $18K | IT #1: $15K | Wells Fargo: $11K | Savor: 12K | Cap1 QS: $8.5K | Barclays Rewards: $7.75K | IT #2: $6.8K | MLife: $6.5K | Sportsman's Guide: $8.7K | NRA: $5.5K | Elan Plat: $2.3K | Cap1 PS: 2K | TRV: $2.8K | Cabela's: $1K


 


Current FICO 8 Scores: EQ: 735 | TU: 741 | EX: 733


Message 3 of 24
Frequent Contributor

Re: How to Add More Credit Accounts Wisely


@fordguy89 wrote:
There is no one formula, keep in mind people can achieve over 800s with 3 credit cards and one loan. If you are not going to do spree, and not tempted by signup bonuses here there everywhere not a bad idea thinking long term to just get one now and let it grow. If you still want to shop for one if you take a long time to do it you are still building months of history with what you already have. Can't go wrong either way.

I always thought, and often hear from people who help with credit that the highest credit scores are given to people with 1 current home loan 1 current auto loan 3 current credit cards and 1 installment loan history or current. That along with 20 years of credit history is how you get 840+ FICO's. It seems like it could be true because what creditors want is good little payers who are in a plausible and affordable amount of debt, not people who own all the things they have and reap the rewards without paying interest on their credit cards.

 

My question is there anyone who only has one loan with no requirement to which type (installment, auto, home) and 3 credit cards who has a FICO over 825?

 

Just my curiosity. That is my current situation, well I have 10 cc's but only 1 loan type, what hurts me is my AAoA (1y2m)

Starting Scores 8/24/14 FICO TU:507 EQ:500
Scores as of 1/1/2016 FICO TU:633 EQ: 622
Scores as of 1/1/2017 FICO TU:759 EX:693 EQ:694
Scores as of 1/1/2018 FICO TU: 751 EX: 739 EQ: 735
Scores as of 1/1/2019 FICO TU: 786 EX: 801 EQ: 796
Message 4 of 24
Super Contributor

Re: How to Add More Credit Accounts Wisely


@BulldogX wrote:

My FICO scores are in the low 700's, which is nothing to complain about, but like everyone here I want to achieve the highest scores possible.

 

A significant factor influencing my scores is the fact that I have few active credit accounts. I recently applied and was approved for a Citi Double Cash Card with a $4,900 credit limit. That added substantially to my available credit. I would like to apply for one more credit card but not sure when to do this. How long should I wait before I apply for my next credit card?


I personally do not believe that that is a factor limiting your FICO scores.

 

I used to think that, based on misinformation I was getting from sites showing Vantage scores, but I now believe that you can achieve perfect 850 FICO scores with just a handful of revolving accounts.

 

If you have 3 or more bank or credit union credit cards, I do not believe you will gain any points at all from having more revolving accounts.

 

If you have no installment accounts, you probably would gain points by taking out a small 48 or 60 month share secured loan with a credit union and paying it down to 9% right off the bat.


FICO 8: Total revolving limits 713500 (592500 reporting)
Message 5 of 24
Valued Contributor

Re: How to Add More Credit Accounts Wisely

I had an 802 in 2009 with no property.  6 credit cards and one chase auto loan.  Then 2009 happened and all it entailed .  Balance chasing,  landlord default,  so on. 

Open one, close three. Open one, close three.
Message 6 of 24
Established Contributor

Re: How to Add More Credit Accounts Wisely


@fordguy89 wrote:

I had an 802 in 2009 with no property.  6 credit cards and one chase auto loan.  Then 2009 happened and all it entailed .  Balance chasing,  landlord default,  so on. 


 My Fiance had an 810 (FICO 9) two months ago according to our credit union.  She has 3 credit cards and a car loan, nothing else.

Venture: $21K | Amex ED: $18K | Amex BCE: $15K | NFCU CR: $18K | IT #1: $15K | Wells Fargo: $11K | Savor: 12K | Cap1 QS: $8.5K | Barclays Rewards: $7.75K | IT #2: $6.8K | MLife: $6.5K | Sportsman's Guide: $8.7K | NRA: $5.5K | Elan Plat: $2.3K | Cap1 PS: 2K | TRV: $2.8K | Cabela's: $1K


 


Current FICO 8 Scores: EQ: 735 | TU: 741 | EX: 733


Message 7 of 24
Valued Member

Re: How to Add More Credit Accounts Wisely

[My original reply seems to be lost.]

 

My FICO scores were in the low 800's (802, 805, 810) with 2 credit cards, a gas card and an installment loan (auto lease.) Then I stupidly made a late payment on my Verizon Wireless bill and that killed my scores. I have read in many places that the impact on my FICO scores would have been reduced if I had more credit accounts. In fact, having few credit accounts is reported as a "negative score factor" on my FICO reports.

 

Two years after my late payment my FICO scores are in 700-teens, e.g., TransUnion is 714. I want to get to 740 so I'll be 'excellent' to most lenders. I've been approved for a third credit card and I'm wondering about applying for a fourth. I wonder if the lender will be put off by seeing two credit applications in a short time. I might get denied or get approved but with a low credit limit. On the other hand, the sooner I get the fourth card, the sooner it starts to age. What do people think is the better course of action - should I apply for a fourth card now or wait?

Message 8 of 24
Established Contributor

Re: How to Add More Credit Accounts Wisely


@fordguy89 wrote:
There is no one formula, keep in mind people can achieve over 800s with 3 credit cards and one loan. If you are not going to do spree, and not tempted by signup bonuses here there everywhere not a bad idea thinking long term to just get one now and let it grow. If you still want to shop for one if you take a long time to do it you are still building months of history with what you already have. Can't go wrong either way.

I did it with 3 cards and no loan.

I'd keep in mind AAofA, I wait 2 years between apps OR I apply fo 2 cards on the same day/week, that way my accounts age at the same rate and I know exactly when the inquiries fall off


Last App 10/14. FICO's: AMEX Ex 846, BarclayTU08 815.FAKOs:CreditKarma 775,CS score 771.BofA 5400,Target $5000,Barnes $8500,Amex $22k
Message 9 of 24
Super Contributor

Re: How to Add More Credit Accounts Wisely


@BulldogX wrote:

[My original reply seems to be lost.]

 

My FICO scores were in the low 800's (802, 805, 810) with 2 credit cards, a gas card and an installment loan (auto lease.) Then I stupidly made a late payment on my Verizon Wireless bill and that killed my scores. I have read in many places that the impact on my FICO scores would have been reduced if I had more credit accounts. In fact, having few credit accounts is reported as a "negative score factor" on my FICO reports.

 

Two years after my late payment my FICO scores are in 700-teens, e.g., TransUnion is 714. I want to get to 740 so I'll be 'excellent' to most lenders. I've been approved for a third credit card and I'm wondering about applying for a fourth. I wonder if the lender will be put off by seeing two credit applications in a short time. I might get denied or get approved but with a low credit limit. On the other hand, the sooner I get the fourth card, the sooner it starts to age. What do people think is the better course of action - should I apply for a fourth card now or wait?


OP this additional information makes the earlier advice more pertinent: You should not expect a noticeable increase in your scores from another account.

 

Unfortunately the baddie is what is holding your score down. Others can suggest because I don't know if it is possible, but if you can somehow get that removed, it would be the best single action for your file. Aging it off is the next option.

 

You are free to app another card if the rewards or benefits align with your goals, just don't expect a score bump from that alone.

 

Good luck!

High Bal Jan 2009 $116k on $146k limits 80% Util.
Oct 2014 $46k on $127k 36% util EQ 722 TU 727 EX 727
April 2018 $18k on $344k 5% util EQ 806 TU 810 EX 812
Jan 2019 $7.6k on $360k EQ 832 TU 839 EX 831
Message 10 of 24