Beginner looking for advice on credit gardening

[Anonymous]

Hey all,

Just found out this forum existed and it's perfect for what I'm looking for! I'm a college student looking to build up my credit as fast as I can and as hard as I can, so I applied for my first card in January 2019, a few months after I turned 18, with my first paycheck from my job at college. Since then, I've built myself up to these scores:

Transunion: 654, 9 hard inquiries

Equifax: 648, 5 hard inquiries

Experian: 707, 14 hard inquiries (credit usage on this one is down to 9%)

FICO 8: 659 / 673 depending where I look, 3 hard inquiries 

0 derogatory marks across the board, 10 months average age of history

(Reason why I'm in the 600s is because I made a large purchase for a club at school ($1800) so my utilization is through the roof. I predict that I'll shoot back up to the low 700s when my credit usage goes down in a week or two - I've paid that purchase off in full two weeks ago.)

Credit Cards:

Discover It: CL of $2000 (up from secured @ $@ 22.99%, was my first secured card @ $200 CL, opened 1/2019

Capital One Journey Student: CL of $600 (up from $500) @ 24.73%, second card, opened 3/2019

Fingerhut: CL of $300 @ 29.99%, first store card I opened, opened 6/2019

PayPal Credit: CL of $1000 (up from $500) @ 25.49%, first credit account I opened, opened 7/2019

AmEx Delta Gold: CL of $1000 @ 24.74%, my first "big boy" card, opened 4/2020

Dick's ScoreRewards MasterCard: CL and % unknown until I get it, I accidentally opened this, opened 4/2020, probably closing soon

Electronic Express Store Card: CL unknown until I get it, I accidentally opened this, opened 4/2020, probably closing soon

TOTAL CL: $4900, maybe $6900 when I get the last two

Open Loans (which I'll likely pay off in full early):

Boro Personal Loan of $1000, $596 remaining, monthly $52 payments for 24 months, opened 3/2019 (this was just to diversify)

Discover Student Loan of $1000, $1000 remaining, monthly $30-50 payments until I pay it off, opened 1/2020 (to diversify as well)

Some questions for you all:

- Should I close the Dick's and Electronic Express cards? I predict a credit limit of up to $1000 on each, which isn't that high, but would be significant. I didn't intend to apply for them and I don't believe I'll ever use them. If I close the, though, that'll be two wasted hard inquiries on my reports.

- Is it worth gardening for a year or two to get my hard inquiries off and my income up, so I can justify applying for credit limit increases and new and better cards?

- What cards, besides AmEx, Chase, and BoA/Capital One cards, should I be looking at? How many cards should I get?

- At what score is it safe for me to apply for 5-7 cards at once in order to get approved for multiple new cards?

- Should I try to immediately pay off the two loans in full, or continue paying them monthly, even with the interest)

- How much can I expect to be able to grow my score within a year or two? My personal goal is to reach 780 or so by 2022.

- When can I try to bump up my credit limits on all my cards again? My goal is to have over $20k in credit by the time I graduate, but my part time student income impedes that, of course. I expect to make 6 figures quickly after graduation, so I might try and blow my CL up then?

- Is it still worth it to try and get added as an AU on my parents' cards? They have good credit and cards like Citi Double Cash Back, Chase Freedom, AmEx, Capital One, and more.

[RSX]

Some questions for you all:

- Should I close the Dick's and Electronic Express cards? I predict a credit limit of up to $1000 on each, which isn't that high, but would be significant. I didn't intend to apply for them and I don't believe I'll ever use them. If I close the, though, that'll be two wasted hard inquiries on my reports. - NO - wait until it is a year old at least - if no AF, then leave it open

- Is it worth gardening for a year or two to get my hard inquiries off and my income up, so I can justify applying for credit limit increases and new and better cards? YES

- What cards, besides AmEx, Chase, and BoA/Capital One cards, should I be looking at? How many cards should I get? 2 at most

- At what score is it safe for me to apply for 5-7 cards at once in order to get approved for multiple new cards? My opinion is, NEVER 5-7 at once - wait for a card you need - then apply for JUST THAT ONE

- Should I try to immediately pay off the two loans in full, or continue paying them monthly, even with the interest) pay off one, not both

- How much can I expect to be able to grow my score within a year or two? My personal goal is to reach 780 or so by 2022. your Age of Accounts and Inquiries will affect this the most

- When can I try to bump up my credit limits on all my cards again? My goal is to have over $20k in credit by the time I graduate, but my part time student income impedes that, of course. I expect to make 6 figures quickly after graduation, so I might try and blow my CL up then? If they offer SP CLI, then try every 6 months - use the cards and pay them off as well

- Is it still worth it to try and get added as an AU on my parents' cards? They have good credit and cards like Citi Double Cash Back, Chase Freedom, AmEx, Capital One, and more. Not in my opinion - you have enough credit to start on your own 

two more notes - you have 2 accounts that you say you didnt intend on applying for - you need to slow down when buying or shopping online

i dont know how even 1 gets accidently applied for, but certainly not 2 in one month

this will impact your scoring going forward due to new accounts, new inq

so be careful about your future steps - you started strong, but lately too many apps in my opinion

second note - that Amex you opened in April, may be affected by the 2 your opened right after in April - i really hope not, but others have had their amex shut down due to accounts being opened right after in the same month

good luck to you!

[M_Smart007]

Hi @Anonymous and Welcome to the forums!

I will give you my thoughts on a few of these, then also carefully weigh out what others will say.

Some questions for you all:

- Should I close the Dick's and Electronic Express cards? I predict a credit limit of up to $1000 on each, which isn't that high, but would be significant. I didn't intend to apply for them and I don't believe I'll ever use them. If I close the, though, that'll be two wasted hard inquiries on my reports.

If they are no annual fee cards, I would keep them open for your weighting of overall age, even though closed they would report for up to 10 years. (and yes it would be kind of a wasted HP) But if you feel the need to close them. Then you could.

- Is it worth gardening for a year or two to get my hard inquiries off and my income up, so I can justify applying for credit limit increases and new and better cards?

Gardening is a great idea, it will let your accounts age, and Inquiries drop off. Would also help to get CLI's and

better limits down the road.

- What cards, besides AmEx, Chase, and BoA/Capital One cards, should I be looking at? How many cards should I get?

Get cards that will fit your spend, do not get cards just to get card. pick and choose wisely.

- At what score is it safe for me to apply for 5-7 cards at once in order to get approved for multiple new cards?

I would not recommend to apply for 5-7 cards at once, unless you have what is called a thick profile and could absorb it.

probably 3 would be about max. they can all age together.

- Should I try to immediately pay off the two loans in full, or continue paying them monthly, even with the interest)

I do not know what interest rate (APR) you are paying?, It really is never a good financial decision to pay interest,

unless A: You have no choice or B: you are making more than the interest you are borrowing at.

Keep in mind certain paid down Installment loans help your FICO score.

- How much can I expect to be able to grow my score within a year or two? My personal goal is to reach 780 or so by 2022.

Goals are always good, keep in mind, applying for credit usually lowers your AAoA and AoYa and you also lose a few points for each HP., you do take scoring hits for crossing certain thresholds.

- When can I try to bump up my credit limits on all my cards again? My goal is to have over $20k in credit by the time I graduate, but my part

time student income impedes that, of course. I expect to make 6 figures quickly after graduation, so I might try and blow my CL up then?

Find out what cards you carry that offer SP (*soft pull) credit limit increases.

- Is it still worth it to try and get added as an AU on my parents' cards? They have good credit and cards like Citi Double Cash Back, Chase Freedom, AmEx, Capital One, and more.

I kind of shy away from this, as most lenders rule out AU scoring when you apply.

ETA: I was very slow in typing this (10 things going on) RSX beat me to it

[Brian_Earl_Spilner]

Good credit and fast don't belong in the same sentence together. 

You're taking score hits for youngest account being less than a year old, each newly opened account, and average age of credit being below 2 years. Plus, for each inquiry until you hit the cap. No, we can't tell you what the cap is as it's profile dependent. I've seen it as low as 5, mine is 9. I didn't look at your utilization, but you're losing at least 3 points for each individual and aggregate threshold you're crossing, probably way more because your file is so new.

[Anonymous]

@Anonymous  you’ve got to slow down. 5 to 6 cards is all you need for maximum scoring benefit on all versions and to put you in a thick profile.

You need to freeze your reports and report to the garden for a year or two. You got way too many inquiries and you’ve got enough accounts that if you’ll just sit and be patient and let them age you will be good.

Be aware that store cards harm your credit based insurance scores therefore causing your insurance premiums to rise. Considering your age I’m sure your insurance premiums are already high enough. I would not recommend store cards unless it’s somewhere you shop a lot and you really get benefits. They don’t seem to hurt your fico scores though.

Stay in the garden and seek SP CLIs if your lender allows it. Leave one installment loan open, preferably the one with the longest term, and pay it down to equal to or less 9% for a score boost.

However I would wait to do that because right now a score boost is not going to benefit you, because you do not need to apply for any more credit at this time. I would pay off all but 1 loan, leave the other one alone while you garden and when you get ready to come out of the garden and apply, pay the loan down to 9% so you get the score boost and then apply.

I’m going to give you a link to a master thread. Read it, however it is in its infancy and we are currently revising and working on it as it is brand new, so there is still much to be done. However go read posts 13 and 14 now for a primer. You want to read it again after we finish revising it.

https://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/FICO-Score-8-Master-thread-what-we-know-what-we-think-what-we/m-p/5998995/highlight/true#M168642

[Anonymous]

Adding on to the other advice, it is possible to hit 800 in your first ~2 yrs of credit. No need for AU.

At least one person following MF did it : https://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Turned-20-and-over-800-credit-score-with... 

Since you have many accounts, you'll be much more resilient to new account impact in the future after gardening, and will have better approval odds. 

Getting 20k in TCL is easy with the right lenders, and even easier after gardening. Getting lemon cards in an attempt to do so will yield regret, though.

You don't need more than 1 loan to get the score effect from credit mix. It's mainly beneficial when it's nearly paid off.

[M_Smart007]

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@Anonymous wrote:

Be aware that store cards harm your credit based insurance scores therefore causing your insurance premiums to rise. Considering your age I’m sure your insurance premiums are already high enough. I would not recommend store cards unless it’s somewhere you shop a lot and you really get benefits. They don’t seem to hurt your fico scores though.

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Not to derail the thread .. IMO

"For better or for worse, a few states have taken pre-emptive measures to shield consumers from being affected by credit-based insurance scores. In California, for example, insurers are not allowed to use credit scores in pricing auto insurance policies. Given the findings of the Arkansas Department of Insurance, and the fact that California is among the top 10 most expensive states for auto insurance, some of their drivers may be at a loss. Massachusetts was one of the more recent states to ban the use of credit-based insurance scoring, when a bill was signed into law by former-Governor Deval Patrick in 2011."

https://www.forbes.com/sites/robertharrow/2016/04/25/is-your-credit-score-affecting-your-insurance-premiums/#6029c59320df

[Anonymous]

Good point, there is I think three states where it’s prohibited to use credit based insurance scores. But if you’re not in one of those three states it applies. Good catch @M_Smart007

[Anonymous]

Thanks for the advice all! I'm probably going to garden for a year or two - I'd love some tips on how to do that effectively and safely. My plan's been to open a ton of new accounts over my first year or two (which I'm now at the tail end of) and then hold off for a year or two on new credit before seeking major increases and new cards like Chase Sapphire and AmEx Platinum. A few more questions if you guys are patient enough for a beginner like me -

@RSX If I only apply for one card at a time, how long do you recommend holding off until my next one? My guess is 1-1.5 years, and then applying for a really prestigious card? Is it possible to switch cards within the same issuer (for example, Capital One) without a hard pull? How likely is it that my Amex gets closed because of my lapse in judgement in applying for two other accounts straight afterwards?

@M_Smart007 Thanks for the welcome! I intend to lurk often around here, you all seem like cool people. My only annual fee card is the Amex right now, so I'll keep the two others open and not use them. How long do you recommend I garden for, and how long do you recommend waiting for until I apply for new lines of credit? Thanks for recommending I don't use AU and letting me know that lenders rule out AU scoring!

@Brian_Earl_Spilner I didn't know there's a cap to hard inquiries - all I know is I have way too many right now! Do you think my score will go up significantly as multiple of my factors go below their thresholds (for example, my utilization going down, my inquiries going down, and my history getting longer) or will it take time to get my score back up?

@Anonymous I realize that, thank you! These were my last planned applications for a good while, and I tried to get 3-4 accounts open right now so I could avoid applying for more for a year or so - I just didn't intend for two of them to be store cards! I'll have to look into the insurance premium increases, but since I don't have auto insurance and won't for a while (urban area) I don't know how relevant that'll be... we'll see? Also my plan is to garden for a year or two - I think my accounts and limits are good for now! I'll probably pay off the higher loan and let the lower one sit for another 12 months while I repay it, or pay off 90% of the student loan and then let it sit for a few years since it's a deferred loan. If I let a deferred loan sit without payments, does it hurt me at all? Or does it only help? Thanks for the thread!

@Anonymous Hopefully I'm the next one to do that! I still got a year or so before I hit 2 years of credit and hopefully I can garden enough to break 800. That's good to know that my new account impact and approval odds will go up in the future - my plan was to open as many accounts as I could in the first 2 years so given a decade or so my new account impact will be minimal. What's a lemon card, and why would I regret getting one? 

Thanks for the help all, I really appreciate you all being patient and helping me optimize my credit even after mistakenly botching three applications this year I'm trying to get ahead of most people my age who don't even have credit or just have AU, so I can get my credit history & score up more quickly. Good stuff!

[Anonymous]

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@Anonymous wrote:

@Anonymous Hopefully I'm the next one to do that! I still got a year or so before I hit 2 years of credit and hopefully I can garden enough to break 800. That's good to know that my new account impact and approval odds will go up in the future - my plan was to open as many accounts as I could in the first 2 years so given a decade or so my new account impact will be minimal. What's a lemon card, and why would I regret getting one? 

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Lemons like fingerhut - capital one starters - store cards. Most of those don't get big limits. Waste of new account/HP.