Effects of spree with little history (was: if FICO rounds AAoA up to one year...)

[Anonymous]

My oldest card is 7 months, my AAoA 4 months, with the four cards in my siggy, newest from January. I have been told that FICO rounds AAoA up to 1 year when it is below a year.

So, why shouldn't I app spam? How can it hurt? I already have the lowest score possible for AAoA and likely near the lowest possible for new account penalty.

HP's will knock a few points off my score, but on the flip side adding cards now is like adding ballast, in a few years they will make my AAoA untouchable.

However I suspect there is a catch I'm not thinking of.

What's the catch?

[jamie123]

Didn't you already use some leverage to get the cards that you have?

What? You think we don't remember you? <You

If you apped for new credit right now your chances of being declined are pretty high. If you do get approved, your CLs will probably be small. It is best to wait it out until your youngest account turns at least 1 year old.

[Anonymous]

I got my current cards before I had a FICO score based on my Canadian credit and on relationships outside the credit score system, if that is what you mean by leverage.

A few months back I apped a Chase card and was declined (for having no credit score at that time, stupid on my part).

However I finally do have a score, over 700 and a solid but short (7 month) payment history. If I apped I would try for a second Amex, likely PRG, hoping that my payment history with them and my score get me approved and that hopefully a decline is a SP. If that succeeds I might try for an Amazon store card.

Those are cards I would use. I'd then stop.

Question is how badly it would hurt my score if I got approved.

[vanillabean]

I say, party on for the rest of the first year, as in rock me baby, rock me all night long, then none of that stuff in the second.

[jamie123]

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@Anonymous wrote:

I got my current cards before I had a FICO score based on my Canadian credit and on relationships outside the credit score system, if that is what you mean by leverage.

A few months back I apped a Chase card and was declined (for having no credit score at that time, stupid on my part).

However I finally do have a score, over 700 and a solid but short (7 month) payment history. If I apped I would try for a second Amex, likely PRG, hoping that my payment history with them and my score get me approved and that hopefully a decline is a SP. If that succeeds I might try for an Amazon store card.

Those are cards I would use. I'd then stop.

Question is how badly it would hurt my score if I got approved.

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You probably have a good shot at the AMEX PRG right now. AMEX likes for their customers to have a charge card along with their credit cards. The scores and history required to get the PRG are much lower than the BCE that you already have. If you want it, then app for it.

If your scores are in the 700s the Amazon card should also be approved. I would just be concerned that your starting CL might be a bit small.

It is difficult to estimate how much your scores would drop because your accounts are relatively new but I would think at least a 10 point drop for each new card for the next 3 months and then start rising.

If you decide to do this please stop back and let us know how it turned out. You have a unique situation here. Almost brand new credit with 4 great cards already.

If you do get these 2 new cards I would suggest that you thank your lucky stars and head into the garden for at least a year.

[Anonymous]

OK, waited for my payment for last month to clear, which it did yesterday (paid in full, fourth month in a row, all four payments >$2000).

Apped the PRG today and got instant approval. Card is in the mail!

I will app the Amazon store card before the PRG hits my report and then I will garden for the rest of the year.

[Anonymous]

You've got close to 2 months before the amex will hit your report.  They are usually pretty slow.  But YMMV

[Anonymous]

And got the Amazon store card too just now, but Jamie was right -- very low credit limit. $400, which makes the card next to useless for me. I purchase more than $400 worth of stuff from Amazon in a month. So I will have to come out of the garden to CLI that in a few months and sock drawer it until then.

[jamie123]

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@Anonymous wrote:

And got the Amazon store card too just now, but Jamie was right -- very low credit limit. $400, which makes the card next to useless for me. I purchase more than $400 worth of stuff from Amazon in a month. So I will have to come out of the garden to CLI that in a few months and sock drawer it until then.

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Congratulations! The roll of the dice was well worth it!

Now, don't you dare sock drawer the Amazon card. Use it like there's no tomorrow. Run up the balance and pay it off several times a month if you have to. After 4 paid statements call for a CLI and you should get one. Rinse and repeat. Call after every 4 paid statements and they will give you a CLI.

If you sock drawer the Amazon card, you won't get a CLI in 4 months.

[Anonymous]

Ok, I will use the store card. Guess I work on CLI's from here on in and otherwise garden. I will update the thread with the impact of this on my score when that comes through. It's just over 700 now, 711 on Experian from myfico and 701 from Equifax via their site. I guess I should expect to see that drop by 20-30 points and then start recovering again.

While it will hurt short-term, I feel pretty good. In a year I should have my score back and I'll have an AAoA with a 6-card rock holding it down. Adding a car loan or a mortgage eventually will only move my AAoA by 1/7th which seems like a good place to be.

Only thing that concerns me is whether BoA or someone else will get spooked by the new credit and take some action. Hopefully the fact that I never carry a balance and always PIF will avoid anything like that happening but I will be sure to make sure my utilization stays low.