@Anonymous wrote:
A question for a score pro out there. I have recently broken out into the world of score gardening. After several years of building my score through aggressive loan payments and almost no revolving credit, I effectively raised myself up to about a 720, from a 530 several years before. This month, I applied for and received an Amex BC, Discover, and Navy Fed Flagship, increasing my available credit from 5,000 to approx 45,000, overnight. However, this generated 3 hard checks, obviously. My concern is this... I would like to get my Amex plat while my hard check is still open with them. This will not incur another hard check, but I believe it will show In my cred report as a new Installment Loan (correct me if I am wrong). Due to my housing situation, I may have to start mortgage shopping in about 2 months. 3 recent hard checks, and 3 new revolving accounts is bad enough... Will this 4th account (the plat Amex) hurt my creditworthiness for mortgage shopping? Or does an Amex charge account not really matter. I am simply assuming that 4 new accounts, regardless of type, is just too much. Additionally, within the same 2 months I will be closing out a small vehicle/unsecured loan 4 yrs. ahead of schedule... Thoughts and concerns will be appreciated.
I'm a score noob, but I'll take a stab...congrats on the increases, though.
IME, I've applied for 2 Amexs at the same time and that resulted in two hard pulls (both on EX, though I know they'll pull more than one report for some). I know with creditors like NFCU, you can get away with multiple credit products on one inquiry, but I never experienced that with Amex. IMO, don't worry about the inquiries. I used to have 30+ on EX and EQ each at one point in time and it was no big deal with only a few points lost for all of them, at worst.
Amex Plat (including Green, Gold, etc.) will be considered a charge card and partly factor into your revolving credit. It will not be considered an installment or scored that way. Nearly all of the FICO versions used out there by lenders will ignore the balance and "high balance" on the card because there is no credit limit reported. However, the TU FICO version on here, we call TU98, will score both the balance and "high balance" as a basis for util calcs. Under a manual review, some lenders, like my mortgage lender, completely ignored the balance when calculating DTI. The assumption is that you have to PIF monthly.
IMO, stop applying for credit. If you had $5000 in CLs already, I'm assuming you already had CCs reporting. You might take a big score hit when these new accounts hit. IME, I lost 20-25 when adding a new CC. I added 3 at one time once and took a 50 pt hit on FICO, but it also lowered my AAoA by a year. IME, I usually saw a return of all points within 6-12 months with most of the points returned within 6 months.
Paying the car likely won't do anything at all. If anything it could result in a small gain if most of your accounts show a balance, and at the least your DTI drops which makes it more favorable come mortgage-time.
