Opening Multiple CCs in a Short Period

[Anonymous]

How do people feel about opening Multiple CC accounts within a short period. "Short" being less than a year. Now obviously the new accounts and many inquiries will initially hurt your score somewhat. But let me give you my background:

I was doing well with finances for about 12 years. Couple of minor hiccups but those were 8 years old at least. (Even had my car repo-ed for a couple days but I figured it out and got my account back current so it never even got reported, thank the Gods!) Anyway, about 4 years ago I became unemployed and started taking care of elder family members. Went through my savings and used my CCs until they maxed out or got cut off from lack of payment. Not sure what my score was before it fell, but likely at least 750. 

After about two years I had a job and began working on my credit repair journey. Began by contacting my 2 creditors (neither of whom sold my debt or reported as collections; just charge-off) to set a repayment plan. Total owed was about $14000. I also tried applying for new CCs since I had no active accounts. Denied each time (specifically the banks I had C/Os with since they "had a loss" with me). I resorted to Open Sky and Discover Secured cards. Wish I had been in a better place and not gotten the Open Sky because, unlike most secured cards, they do not offer the ability to upgrade to an unsecured card/credit limit increase. 

Within my research, I gathered the notion that credit reports and scores want at least 5 CC accounts on the report. I already had two and I wanted to get the two from my main banks (once I paid off the debts) anyway. So it kind of made sense to get one extra from another bank I deal with. I paid off the smaller of the debts in 3 months and the other in 6. At that point my credit score had climbed from 550 to 640. I applied for all 3 banks and was approved for all with varying credit limits (2 much higher than I expected).

Point is, I know all advice tells credit seekers to not apply for or get a lot of accounts in a short time span because it does not look good. But, as a person who is creating their credit history from 0 open accounts, I figured it made sense to bulk up on starting long-term accounts so that when I do seek credit in the future (2, 5, 10 years) each new account will not drop my AAoOA as much. What are others' thoughts?

Tl;dr: Had 2 C/O accounts; 0 open accounts; Score 550. Should I have opened 5 CC accounts in less than a year to pad my CR for future credit history?

March 2020: EQ550, EX550, TU554

May 2021: EQ711(V3), EX704(F8), TU706(F8)

Thank you everyone for your thoughts, stories, struggles, and advice!

-JT

[Brian_Earl_Spilner]

Spree results are profile dependant and rarely are a good idea. While it may be a good idea to anchor your AoOA, you typically want to do that with a card that you plan to keep forever. The main issue I think, is people apply for whatever they can be approved for. Later, when theres something they want or need, the past credit seeking causes problems. That's pretty much what I ran into. The initial sprees kept me from approvals and CLIs. And if I was able to get an approval, it was for a small limit.

[Anonymous]

Thank you for your reply. The only one I do not intend to keep is the Open Sky (but will for the sake of the history). The others are all with banks I use and will continue to build with. The good news is the Discover already has become unsecured and bumped to $1500 limit. The others have given me a combined limit of $27000; roughly equivalent to my pre-debt days. I also keep the balances paid off each month. 

As for the future credit requests, once the inquiries (which luckily were pretty evenly split between the 3 agencies) drop off, should I (and others) worry/expect creditors to consider multiple accounts being opened in a short time span as a neg? As an aside, I did not apply for every possible CC I could get; want to make sure others do not take my experience as a shotgun to the system. I had 2 I wanted to get, 2 secured I had to get, and 1 I knew I could get. It was calculated and exercised with caution.

I am hoping once these 2 Paid C/Os are removed next year that I will be back to a nominal score of 750 or higher. 

[rostrow416]

Well that's easy to answer with the benefit of hindsight.  Opening those accounts definitely helped you along the way. 

I was in a similar place and decided that opening quality accounts as soon as I could, would help my bad credit history.  It dragged my score up from the mid-high 500s to mid 700s in about 15 months.  It lined up with a bunch of charge offs being removed and lowering utilization, but I found the effect compounding as I opened new accounts.  

Now my plan is to only open a new account every 6 months based on the SUB and spending requirement that fit my short term.  I've got the next 3 years of apps planned out.  

So go ahead and plan out your future apps, it seems you have a good base to build off of.

[calyx]

I essentially did this, but it does require a lot of patience (I know this, because I am not and it was hard) and research.

As @Brian_Earl_Spilner said - you want to do this only with cards that you will keep for a very long time.    Since I was/am building my credit file "later" in life (in my 40s), I wanted to make sure I could keep whatever accounts I opened for as long as possible.   I did a few months of research and settled on USBank, Discover, and Citibank, because they all offered secured cards that would graduate and be product changed (PCed) into my goal cards.   It also meant knowing that I was giving up any sign up bonuses that might be offered for my ultimate goal cards.    I went straight to the secured option because I knew that with my file (only a loan that was defaulted, no credit cards), it was unlikely I'd be approved for the credit cards I wanted and I would rather tie up the deposit amounts to get my goals done right rather than get crappy or bucketed cards I couldn't use forever.    I'd rather bide my time and wait for a graduation/PC than have any cards I did not want/could not use with my spend.

I had Opensky, only because I could not even get approved for the secured cards listed, nor any non-predatory lender I was willing to be saddled with.  If I was going to have an account I was going to toss to the wind when possible, I was at least not going to take the HP to get it (which Opensky offered).

My only screw up was getting impatient with Citi, and while going through their fraud process, applying for Disco.  It put me at 4/24 when Citi finally approved my application (after denying it twice), when I wanted to stay at 3/24 (I had to drop a card from my selection list with Opensky) because my ultimate goal was to get in with Chase for travel.

The biggest snafu, honestly, was that by the time my Citi card graduated, I could no longer PC it to the product I wanted, and I had the original "second" back up covered.   I wanted the Dividend card, can't PC to it any more, and by the time I got around to PCing it, I had the SDFCU 2% card and didn't want the Doublecash... now they throw really nice promos at me for my DP, and I am not mad (so it worked out  )

In general, it's best to spread out new apps and accounts (1 every 6 months or so is good), but a big start can be done, but it needs to be done intentionally for it to be successful and align with ultimate financial goals.

Edited to add:   When I started my build, I was in the 540s, so it looks like our respective starting files aren't all that far apart.   Good luck to whatever you choose!