When to Ask For Increase vs Apply for New Card - Lowering Balance/Available Ratio

[Jazee]

I'm trying to get my credit up from low 700's. I've got a USAA credit card I've had for over 10 years never a late payment.  I just got approved a month and a half ago for an Amazon Store Card (I like the ability to choose between 5% cashback or 0% financing.)  My self-employed income is highly variable so some months by credit utilization is high, right now it's below 20% on both cards and I can easily pay the full balance this next month.

I want to decrease my average dept utilization ratio in the future by increasing my total credit to a reasonable amount.  My total available credit is about 18% my pre-tax income, 25% my post-tax income.  I've got an auto lease that on my report shows a balance about 20% my post-tax annual income.  (Probably more info that people need to answer my question LOL.)

What I'm wondering is should I ask for a credit increase on my USAA card prior to applying for a another credit card or after?  Does asking for a credit increase produce a soft or hard hit?  

[firefox100]

I would call USA and just ask them if is soft pull or a hard pull. If the answer is a soft pull then go forit Second I think the amzon store card is by Synchrony if so just 3 month then ask for cli. Synchrony does soft pull, just put some spend on the card. If you give us your total credit limit and income we could be more help. It sound like that you have some military affilation if so then it may be good Idea to open a account and start relationship with NFcu.

[FinStar]

@Jazee - any customer-initiaded CLI requests w/USAA will result in a Hard Pull.   As far as the Amazon store CC by SYNCB, those are SP.  The only thing with the latter is it appears your account might be too 'young' to get approved for a CLI, but never hurts to ask since it's SP.

What are the limits on each card?  Aside from USAA and Amazon, do you have any other CCs?

[Apple507]

We have had USAA for 15 years and our limit grew fairly quickly from $5,000 to where we are now at $20,000. We haven't asked or been given a CLI in probably 10 years. I think it couldn't hurt to ask since you have been with them the longest. Have you ever asked USAA before?

[Jazee]

Sorry for all the initial typos. If USAA is a hard pull, seems to me I should wait for my FICO score increase to hit from my decreased credit utilization from paying off current balances. I get alerts and it's actually quite surprising how much a difference the credit utilization percentage makes.  I've seen 50 point or greater swings in months I've paid my one USAA card off/down to almost $0.  Last month I let the balance get close to the limit but just paid it down to $0 a week ago. I can see on my TU report USAA reported balance the last time on Oct 16.  I would guess they report it at regular intervals right after the payment due date typically.  So should update today or soon.

If I recall, the hard pulls are all lumped together if they all occur within a short time period, 30 days?  I also read that the small negative hit to opening new accounts typically goes away after you've had the new account open for 3 months?  So seems to me, the best plan would be to wait until the Synchrony account is over 3 months old before doing anything.  But then I'm not sure what the best order would be to do thing?  I think the best thing is to try to get the new credit card first before I've asked for CLI from Synchrony and USAA while my available credit to income ratio is lowest as getting CLIs before that will increase that ratio. Or would it be best to approach Synchrony first since it's a SP and the increase is probably going to be fairly minimal?

[Anonymous]

@Jazee Just want to clear up your question regarding inquiries within 30 days, they will impact your score separately if they are inquires for anything other than mortgage, auto or student loans.

The "grouping together" effect is in reference to mortgage or auto inquiries made within a certain time frame (2 weeks for older models and 30 days for newer versions of fico). If they are codes properly they will only count as a single inquiry if you obtain an auto loan/mortgage within the 30 day period after the inquiries.

The thought process is that a consumer is usually looking for the best rate, so they shouldn't be penalized multiple times for checking with multiple lenders.

Please reference the write up below:

https://www.myfico.com/credit-education/credit-reports/credit-checks-and-inquiries

I will allow those more experienced to assist with your other questions.

[firefox100]

It sound like you only have 2 creditcard accounts, if so I would apply for any new account or request credit increase from USA because some one said it was a hard pull, do not do any thing which would cause a hard pull at this time. Because what is happening at this time you may be denied for a new account not credit experience. This is just my opinion, what I would is put good amount on your Amzon Synchrony account after you have the account for at least 3 months then go head and ask for credit line increase by callingin talking to credit solutions at synchrony bank. after six to eight months then I would apply for Paypal mastercard from synchrony bank, if Suynchrony bank approves you for paypal card then about year then go for another card at one other big banks it going take some to get ball going. Again what are the credit limits are on the 2 cards you have now.

Below are my fico score and accounts.

 Fico scores are around 804, Discover card 29K, Bank america mc 25K, Wells fargo Propel 20K, Us bank cash visa 19.5K, Us bank altitude go visa 10K, Cap one Wallmart 19K, Cap One quick silver mc 4.7K Cap one bus sparks 2K, JCP store synchrony 20K, Citi double cash 15.6K, TD bank cash visa 14K, Barclays Uber visa 12K, Barclays ring mastercard 8K, Apple gs 10K, Merric bank mc 3150, Blispay visa 2K.

[RSX]

i would wait until the Sync Amazon card is 6 months old before getting another card

keep your overall util low so that you get the highest CL possible from the next application - and have the best chance at getting it

[Jazee]

$4,000 on my USAA and $2,600 credit limit on Synchrony.  I've got about a about half the balance on my 3-year auto lease remaining ($5K).  My business is growing fast and I'm now averaging around $8K/month gross income or close to $100K a year.  No mortgage or any other loans or lines of credit.  The Experian site tells me because I have 3 credit accounts, my file may look "thin" to some lenders and other sites like WalletHub are recommending I get a personal loan or another card. My goal is both increase my total credit available and add another card to start building payment history on.  

That's excellent info about the credit inquiry hits. In regards to that, so then what's the best approach, to only apply for credit cards that will do a prequalify with a soft hit and start with the one you think you have the best shot at getting the highest line of credit with?

My scores now are Experian:685, Equifax: 689, TU: 665.  TU there was an old account that was "payment after charge off" that shouldn't be there that I just got taken off today! So TU score should come up more in line with the others.  When I had my balances paid down to below 6% Experian and Equifax where in the 720's prior to opening the Amazon Store Card.  So with some aging on that and paying down the balances to 6% or lower, I would expect to be back into the 720's in a month or two.  I just need to figure out the order to do things in between CLI requests and which new card to apply for. It seems more important that I get approved for another card than to increase my USAA CL so I am guessing I should go for the new card first before getting a hard pull from USAA for the CLI.  Since Synchrony is a soft pull doesn't it really matter if I do that before or after applying for the new CC?

[Jazee]

@RSX That was actually my initial gut feel of what I should do based on limited knowledge.  I read something about at least 3 months, but 6 months I guess would be better.  I'm guesstimating though I may apply for a mortgage in about 20 months (non-Jumbo) so contemplating whether the extra 3 months of payment history on the new card is more beneficial over waiting longer.   It sounds like asking for CLI for Synchrony Amazon Store Card isn't a big deal, so I could do that after 3 months since it's a SP to try to increase my total available credit making it easier to keep my utilization percentage down without putting an HP on my account.  So if I wait 6 months, do you think I should try for a CLI though on the USAA account immediately after my scores go back into 710's-720's?  I've had that card for over 10 years with no CLI request, no late payments, but kept the balance pretty high until now.

I just remembered I have an account with some negative info on it that will roll past the 7 year mark after March 2021, so I guess that simplifies the decision to wait until the Synchrony card is over 6 months old.