Ideal App spree timing?

[Anonymous]

When seeking credit and attempting to add 3-5 new accounts each year, is it better to do it all at once or stagger them? Wondering if scores would take less of a hit if they were staggered.

[expatCanuck]

Thinking aloud - if you do them at once, assuming a sufficiently high starting FICO, you're likely to be successful, but expect a more significant hit to your score, which will likely take 3-6 months to rebound (depending on AAoA and the depth of your credit file).

Spaced out, a lesser FICO impact, but perhaps an increased likelihood that you'll be denied based on the amount of credit to which you have access and the number of reported cards you have.

Me, I just took on four cards last month, and am waiting to see the impact.  I'm thinking that I should've stopped at 2 or 3.

[Anonymous]

It honestly doesn't matter.  The end (long term) result is essentially the same.  It's more of the short term that needs to be considered here.  For example, if you're planning on applying for a mortgage 1-2 years from now, you'd want to get the entire spree out of the way immediately rather than stagger your apps throughout the next year.  Also, the quicker you add an account the quicker it begins to age. 

[Anonymous]

All at once, preferably on the same day, and even moreso close together in time.

Especially if youre going to double pull the same bank (like 2 amex or chase)

I believe in most cases the same bank = the same hard pull for the same 24 hour period.

Ive always wondered what would happen if i filled out 10 apps in different tabs and just went through and clicked them all at once, if all those simultanous pulls would even register each others inquiries.

>_>  Project for another time.

[Anonymous]

I think there were some reports in the last 15 months that CC denial can occasionally be caused by too many applications for cards (or too many new cards -- the two things are not exactly the same) in too short a time frame.  Different issuers can have different policies of course.  You mention the possibility of applying for five cards.  Five cards in a week might trigger an issuer's internal "too many too fast" flag -- again, depending on the issuer.

From what I understand, the major FICO models do not have "too many too fast" as part of their algorithm -- aside from the obvious fact that multiple new tradelines cause your AAoA to go down, they are typically associated with multiple inquiries, etc.

I am a little curious... why are you planning to add an average of four cards (I assume the accounts are credit cards) every year when you have twelve now?  I understand wanting card X or card Y due to a specific promotion being offered at a specific time (which typically involve minimum spending requirements) but you are talking about five accounts possibly all at once, which sounds like it is just want an increase in the tradelines for the sake of tradelines.  Not being critical, just curious.

[Anonymous]

No worries! I’m actually firmly planted in the garden now & DH will be after he apps for NFCU in a couple days. Was just asking questions to build knowledge for the future

[Revelate]

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@Anonymous wrote:

From what I understand, the major FICO models do not have "too many too fast" as part of their algorithm -- aside from the obvious fact that multiple new tradelines cause your AAoA to go down, they are typically associated with multiple inquiries, etc.

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Doesn't on FICO 8 or FICO 9... these are all pretty scorecard problems, derogatory scorecards FICO doesn't appear to care, at all, how many cards you've opened and when other than the usual revolving utilization metric suspects... one year seasoning on tradelines for FICO 8, not sure that FICO 9 cares.

FICO 98 did some pattern of multiple accounts, from EX FICO 2: You've recently opened too many new credit accounts

It switched up in the FICO 04 model apparently to looking at youngest account (maybe youngest revolver, we're still trying to tease that out) and then there's apparently this bugaboo on TU FICO 4: You have too few or too many credit accounts.  (I fall into the too many category).

Anyway if you choose to spree, do it all at once and then garden for the year from a FICO scoring perspective: if you are going to take a negative, you want that negative taken as soon as possible as the only thing which is constant in the FICO algorithm is the passage of time.  So get all those inquiries, and new tradelines done and out of the way ASAP... if you stretch them out, you just prolong the pain which may come back to haunt you when you really need something like to be clean as possible for a mortgage.  Should go without saying, if you're even considering another mortgage don't open anything up.

Also make sure you're going to use the card for something, I had a purpose for every single one of my credit accounts but I'm being penalized now by some amount on a mortgage score that I actually care about because I have too many of them apparently.  Go me.

[Anonymous]

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@Revelate wrote:

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Also make sure you're going to use the card for something, I had a purpose for every single one of my credit accounts but I'm being penalized now by some amount on a mortgage score that I actually care about because I have too many of them apparently.  Go me.

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Can you give us an update on this?  I remember you talking about it months ago.  It's a penalty associated with simply having too many credit cards, right?  A few questions...

Which models?

Do you guess that FICO is looking at open credit cards only?  Or is it looking at closed CC's as well?  (I.e. if a person were to close a few cards that he no longer has a use for, could that eliminate the penalty?)

If you had to make a guess as to where the cutoff is, what would you guess that to be and why?  (I.e. if you have less than X open cards or Y closed/open cards, then there's no penalty.)

The question has some practical bearing for me since I may be buying a house in the next five months.  My mortgage scores are likely fine, but I am still curious.  I have 13 open credit cards and two closed; and could easily close a couple more I have no further use for.

[HeavenOhio]

Apart from scoring and your ability to to be approved, something thing to keep in mind when signing up for new cards is the spending requirements for signup bonuses. You want to be able to meet the spending requirements without spending money that you wouldn't have spent otherwise.

[Anonymous]

^  +1 to this.

This is what I was getting it earlier.  It's hard for me to imagine situations where it makes sense for a person who already has 12 open cards to want to apply for 4-5 cards all in the same week or even month.  Partly because of the need to chew through the minimum spend, which ideally should take a while if you are keeping your spending low, and partly because it's rare for four different cards to all have hit the best promotional bonus they have gotten in a while.

For those reasons it seems that even a pretty aggressive bonus chaser would still end up with his four cards spread out over time -- not deliberately, but just the way it would tend to work out.