Should I Open New Cards?

[Anonymous]

My scores are 758 equifax, 779 tu 756 experian. I am only 21 and have a chase freedom 3500 cl and boa 1500 cl. Also, I have a loan for furniture which is about 2300. I just opened a capital one qs 3000 limit today. I want to build my credit history.

I have no missed or late payments. Combined history is 1 year 5 months. 2 tu inquiries and 5 equifax. I know the inquiries arent well.

Because I am only 21 and want to be able to have a bright credit future. This means having more accounts and a longer history.

What is the best way to achieve this? I am looking to buying a car/house in the future at a young age. My score is well for just starting off my my problem is the history. Should I get more cards now before I need the history to get apporoved in the long run?

Thanks!

[Anonymous]

You have three cards and a loan; pretty much optimal for maintaining and growing your already excellent scores. Because your file is thin, and your AAoA short, new cards will have a larger negative impact on score than someone with a longer history and thicker file. Unless you need a new card right now, I'd sit on what you already have for a while and let them age.

[Anonymous]

Thank you for the advice! Any tips on getting to the 800 club in the near future?

[Anonymous]

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@Anonymous wrote:
Thank you for the advice! Any tips on getting to the 800 club in the near future?

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The higher the scores, the more difficult the next increment is to come by. Your scores are already high, so it's going to depend on how you define near future. I think it's pretty difficult to hit 800 before your AAoA hits the 3 to 4 year range. I peaked at 805 on one score when my AAoA was around 5 years, but that dipped back down with new apps dropping it to the 4 year range.

[Anonymous]

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@Anonymous wrote:

You have three cards and a loan; pretty much optimal for maintaining and growing your already excellent scores. Because your file is thin, and your AAoA short, new cards will have a larger negative impact on score than someone with a longer history and thicker file. Unless you need a new card right now, I'd sit on what you already have for a while and let them age.

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+1

Agreed. Try applying for anything you need/think you'll need in the future and then sit and watch your AAoA grow. Mine is still only 9 months

[Anonymous]

Given your situation one goal for you should be no new credit applications for one full year ahead of any mortgage application, and none for at least six full months ahead of the car loan. You should have enough lead time to plan for that.

So if there are any other credit products you want app them NOW so you can sit tight in the garden with all your needs met while you plan those big purchases. Don't just app for the sake of an account but if there is something you will likely pick up one day anyway get it now so it is nicely aged by the time you app r big stuff.

When you get close to the dates of those loans, within two months, you will want to optimize utilization but between now and then ignore that.

Just settle in to always paying all your bills on time and in full and concentrate on the harder part: saving up enough for that car and that downpayment that you get affordable monthly payments and not run into the ground by loans you can barely afford.

[Anonymous]

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@Anonymous wrote:

Because your file is thin, and your AAoA short, new cards will have a larger negative impact on score than someone with a longer history and thicker file. Unless you need a new card right now, I'd sit on what you already have for a while and let them age.

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The flip side is if there is anything OP knows (s)he will eventually get, (s)he should get it sooner than later so that the inquiry ages off before the car loan, and so that the AAoA hit happens sooner than later. In the long run AAoA will be higher if he apps something today rather than in a year.

The downside is it will trash AAoA in the short term.

I made a point of getting to six cards within the first eight months of my credit history so that future applications would have minimal impact on my AAoA. That crashed my score temporarily but those inquiries start aging off next month and by January they will all be gone, and my AAoA, short as it is, will be well protected by a big base of cards all from the start of my history.

OP has three accounts so a fourth will cut AAoA by 25%, which is painful, but not as painful as it will be in a year, and the extra card will EVENTUALLY be a good AAoA buffer, two years from now. The next app would then only cut AAoA by 20%, butr protection of extra accounts dwindles (1/6th not much different from 1/7th etc).

So the OP needs to think about timing.

If there is a card that looks good AND the car purchase is six months away then I would say go for it, take the hit now in order to grow AAoA long term.

Also OP you will want your AAoA to be over two years when you app that mortgage, so if that is something you would do in the next two years that might be a reason not to app now, but if it is three years or more away go for it.