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Responsible leveraging of credit

Walt_K
Senior Contributor

Responsible leveraging of credit

First, let me say that this board has been wonderful.  I've learned a lot here and it has helped me improve my credit tremendously. 

 

However, I sometimes get the sense that people that have stumbled onto this board are people that came here because their credit was a disaster.  And the good practices they learned to clean their credit up have become ingrained as absolute rules, when they are anything but. 

 

As one example, people seem to be overly inquiry sensitive here.  Many people are looking to maximize their credit score, wanting to see 800+ scores.  Gardening is touted as an absolute virtue.  That is fine if you are trying to rebound.  You don't need to be applying for tons of new credit constantly, especially if you are already credit damaged and every point counts.  And that is fine if, like me, you have a large purchase on the horizon such as a mortgage or an auto loan. 

 

But if you have clean credit and aren't planning on a big purchase anytime soon, there is very little reason not to leverage that to take advantage of the lucrative credit card offers that are all over the place.  The same fiscal sense that says to PIF to avoid interest payments should say that if cards are giving away sign up bonuses valued literally as high as $1000 and up, you should be all over that.  I have to pull myself away from some of these offers by reminding myself how much more important our new house will be to our family.  But after that mortgage is locked up, I will apply for as many of these things as I can.  Just hope the bonuses are as lucrative next year.


Starting Score: ~500 (12/01/2008)
Current Score: EQ 681 (04/05/13); TU 98 728 (01/06/12), TU 08? 760 (provided by Barclay 1/2/14), TU 04 728 (lender pull 01/12/12); EX 742 (lender pull 01/12/12)
Goal Score: 720


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Message 1 of 13
12 REPLIES 12
bunnyrabbit
Valued Contributor

Re: Responsible leveraging of credit


@Walt_K wrote:

First, let me say that this board has been wonderful.  I've learned a lot here and it has helped me improve my credit tremendously. 

 

However, I sometimes get the sense that people that have stumbled onto this board are people that came here because their credit was a disaster.  And the good practices they learned to clean their credit up have become ingrained as absolute rules, when they are anything but. 

 

As one example, people seem to be overly inquiry sensitive here.  Many people are looking to maximize their credit score, wanting to see 800+ scores.  Gardening is touted as an absolute virtue.  That is fine if you are trying to rebound.  You don't need to be applying for tons of new credit constantly, especially if you are already credit damaged and every point counts.  And that is fine if, like me, you have a large purchase on the horizon such as a mortgage or an auto loan. 

 

But if you have clean credit and aren't planning on a big purchase anytime soon, there is very little reason not to leverage that to take advantage of the lucrative credit card offers that are all over the place.  The same fiscal sense that says to PIF to avoid interest payments should say that if cards are giving away sign up bonuses valued literally as high as $1000 and up, you should be all over that.  I have to pull myself away from some of these offers by reminding myself how much more important our new house will be to our family.  But after that mortgage is locked up, I will apply for as many of these things as I can.  Just hope the bonuses are as lucrative next year.


Would you wait until your EQ and TU score meet your current goal score before you do so?

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
It's very tough with small income ~ The Rewards are big little helper to me.
Message 2 of 13
LTomBerry
Frequent Contributor

Re: Responsible leveraging of credit

Yeah I'm thinking wait until that mortgage has been reporting on your CR for a few months, that should push your score into the range where you can really qualify for some of the prime cards with the best offers.


Starting Score: 690
Current Score: EQ 780 EX 814 TU 783
Goal Score: 800

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Message 3 of 13
Walt_K
Senior Contributor

Re: Responsible leveraging of credit


@bunnyrabbit wrote:

Would you wait until your EQ and TU score meet your current goal score before you do so?

I think my TU is already there.  When it was last pulled by Quarterly Monitoring, I had let a large balance post.  I'm pretty sure it is 720-730.  I'll know when I get my next update in October.

 

I think the EQ in my signature is fairly accurae.

 

I won't wait until EQ gets higher.  After I have the mortgage, the only thing I would continue to wait on is if we decide we are going to buy a car.  After the car, I'd apply if I thought I would get approved.  If I didn't get approved, it wouldn't matter to me.  I wouldn't keep apping for things blindly if I was getting approved, or even if I were getting approved.  But I'd probably apply for 2-3 cards every 3 months or so. 


Starting Score: ~500 (12/01/2008)
Current Score: EQ 681 (04/05/13); TU 98 728 (01/06/12), TU 08? 760 (provided by Barclay 1/2/14), TU 04 728 (lender pull 01/12/12); EX 742 (lender pull 01/12/12)
Goal Score: 720


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Message 4 of 13
bunnyrabbit
Valued Contributor

Re: Responsible leveraging of credit

Good Luck Walt!  Smiley Wink

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
It's very tough with small income ~ The Rewards are big little helper to me.
Message 5 of 13
tinuviel
Moderator Emeritus

Re: Responsible leveraging of credit

Good points. We have to remember that the credit management "rules" that we discuss here are really more like guidelines. Everyone's credit situation is unique, and an individual needs to decide what is best for her- or himself.

 

Good luck with the mortgage!


Current Scores: EQ 775 (03/04/2014), EX 756 (03/01/2014), TU 760 (03/01/2014)
Ruby Spade Garden Club Member - Last App: 03/04/2013 - No apps until 2014
Cards: Cap1 Venture 6.4k, Cap1 Quicksilver MC 1.75k, BankAmericard 1-2-3 Visa Signature - UCF Alumni Association 5k, Discover 7k, Citi Diamond Preferred MC 10.35k, Wells Fargo Rewards Visa 7k, Chase Freedom 5k, Chase Ink 7.5k, Amex Green NPSL, Dillard's Amex 7.5k, JC Penney 7.5k, Kay Jeweler's 5.1k
Message 6 of 13
Walt_K
Senior Contributor

Re: Responsible leveraging of credit


@LTomBerry wrote:

Yeah I'm thinking wait until that mortgage has been reporting on your CR for a few months, that should push your score into the range where you can really qualify for some of the prime cards with the best offers.


I don't anticipate an increase from adding a mortgage.  I have a mortgage now.  What is holding my score down is that I was unemployed in 2008 and had 7 accounts go late.  A couple got to 150 days.  Several 120 days.  No luck with GW deletions, so I am just waiting it out.  I think my scores are good enough now to get approved for most cards.  Might have to recon and explain the period of unemployment. 


Starting Score: ~500 (12/01/2008)
Current Score: EQ 681 (04/05/13); TU 98 728 (01/06/12), TU 08? 760 (provided by Barclay 1/2/14), TU 04 728 (lender pull 01/12/12); EX 742 (lender pull 01/12/12)
Goal Score: 720


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Message 7 of 13
haulingthescoreup
Moderator Emerita

Re: Responsible leveraging of credit

I hear what you're saying, but the whole point of gardening is to get to where you can app for anything you want, knowing that you'll probably get it.

 

I started using the "gardening" metaphor to make people realize that they had been in a hunter mindset, continually stalking any CC who would accept them, lol, and that once they'd reached a certain point, they needed to reprogram their brains and turn to taking care of what they'd already gotten.

 

And I agree that people get a bit more wound up about inqs than they should. (The real score damage comes from the ton of new accounts that result.) But if you're going for a mortgage, "too many inqs" is a very real concern. Ask your lender.  Smiley Wink

* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
Message 8 of 13
SevenNEW
Established Contributor

Re: Responsible leveraging of credit


@Walt_K wrote:

I won't wait until EQ gets higher.  After I have the mortgage, the only thing I would continue to wait on is if we decide we are going to buy a car.  After the car, I'd apply if I thought I would get approved.  If I didn't get approved, it wouldn't matter to me.  I wouldn't keep apping for things blindly if I was getting approved, or even if I were getting approved.  But I'd probably apply for 2-3 cards every 3 months or so. 


That's a lot of cards if you keep doing it... Smiley Wink

SevenNEW, Garden Nerd - In the Garden until 2015!
4.2K 10K 24.6K
Message 9 of 13
Walt_K
Senior Contributor

Re: Responsible leveraging of credit


@haulingthescoreup wrote:

I hear what you're saying, but the whole point of gardening is to get to where you can app for anything you want, knowing that you'll probably get it.

 

I started using the "gardening" metaphor to make people realize that they had been in a hunter mindset, continually stalking any CC who would accept them, lol, and that once they'd reached a certain point, they needed to reprogram their brains and turn to taking care of what they'd already gotten.

 

And I agree that people get a bit more wound up about inqs than they should. (The real score damage comes from the ton of new accounts that result.) But if you're going for a mortgage, "too many inqs" is a very real concern. Ask your lender.  Smiley Wink


But what's the point if you never app for anything?

 

And I hear you about the mortgage.  That's why I'm not apping right now.  I have 0 inquiries on TU.  I have 1 on EQ from November 2010.  And I have 3 on EX, October 2010, April 2011, and June 2011.  I would like to apply for Amex Plat because of the amount of work travel I have been doing lately, but I'm holding off on apps until next year after the mortgage, and potentially after an auto loan as well. 

 

I just wish I had known earlier how to take advantage of all the CC bonuses for airline miles, hotel points, and even cash.  I heard a long time ago that you shouldn't apply for too many credit cards because it will hurt your score.  And it's true within reason, but if you have otherwise clean reports, a few inquiries and a lowish AAoA isn't that big of a deal. 


Starting Score: ~500 (12/01/2008)
Current Score: EQ 681 (04/05/13); TU 98 728 (01/06/12), TU 08? 760 (provided by Barclay 1/2/14), TU 04 728 (lender pull 01/12/12); EX 742 (lender pull 01/12/12)
Goal Score: 720


Take the FICO Fitness Challenge
Message 10 of 13
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