No credit card required
Browse credit cards from a variety of issuers to see if there's a better card for you.
Hey guys, so I recently applied for my last 3 credit cards last month, I got the amex cashback for 2k, the amazon prime sig for 6.3k, and then I got the citi double cash for 500 on the 1st of this month. I assumed this would push my limits up and lower my utilization. I am also paying down all of my previous card debt to 1% utilization. Since applying for the first two in Oct, the only one that has reported was Citi, and it dropped my score 7 points across each bureau.
My questions, once the other to cards finally decide to report, would it be safe to assume another 14 points will drop from my scores, will the higher limits of those cards fight against those point drops, and which is better to pay off from a credit score increase perspective, a vehicle installment loan (3.8k) or a revolving card balance (2.9k). I am aware of paying off the one with the higher interest to save money, but I want to know which will boost the score better.
The purpose of all of this is to be able to purchase a house in 4-5 months, thank you all who can help in advance.
Nice response by NRB and TMR.
Opening a number of new cards was a mistake given that you plan to buy a house soon. There is no changing that, however, so the best thing to do is get all cards reporting zero except one (AZEO) with the remaining card reporting a small positive balance (e.g. $20).
Once the new AZEO balances have appeared on all three reports (you can use some free tools to monitor that) then you should sign up for the myFICO Ultimate and take a look at your mortgage scores. These are different from your FICO 8 scores.
PS. Do be sure to make one purchase on each of the new cards -- although it's fine if the card still reports $0. When a new card remains unused for a while it sharply increases the chance that it will be closed due to inactivity.
Follow up from something i just read "dont apply for new credit within 6 months of mortgage..."
Do high FICO scores, Zero Baddies, low UTIL, and 1-2 inquiries defy that logic in general? or does the rule of thumb overrule any extenuiating circumstances?
why i ask, i am looking to buy a house next summer as well. i have one recent inquiry, but looking to add a second (CC), only if the impact is minimal.
As i said, no baddies, low to no util, currently one inquiry, scores in sig (mortgage scores: 784/809/811). I have student loans and one auto loan.
Rick
@Anonymous wrote:Follow up from something i just read "dont apply for new credit within 6 months of mortgage..."
Do high FICO scores, Zero Baddies, low UTIL, and 1-2 inquiries defy that logic in general? or does the rule of thumb overrule any extenuiating circumstances?
why i ask, i am looking to buy a house next summer as well. i have one recent inquiry, but looking to add a second (CC), only if the impact is minimal.
As i said, no baddies, low to no util, currently one inquiry, scores in sig (mortgage scores: 784/809/811). I have student loans and one auto loan.
Rick
It's certainly a profile-specific thing -- but it's generally the rule of thumb to ensure you are able to obtain the best possible mortgage offer (lowest rates) for your credit profile. Any ding to your scores, even a minor 5 point ding, can take you from the lowest interest rate tier to the second lowest or worse. The mortgage FICO models also weigh 'credit seeking behavior' quite heavily, so the score reduction could be more than expected. Of course, if your scores are already in the 800+ realm, and you have a lengthy AAoA on a clean report, this reduction may not affect your mortgage interest rate offer at all. But - the addition of new accounts will prevent your scores from increasing a bit more (likely due to aging factors) over the next few months prior to your applying for a mortgage. If I were you, I'd err on the side of caution just wait till after the mortgage was secured before adding new credit into the mix because i'd much rather end up with the best possible mortgage offer than a new credit card.
@Anonymous wrote:Follow up from something i just read "dont apply for new credit within 6 months of mortgage..."
Do high FICO scores, Zero Baddies, low UTIL, and 1-2 inquiries defy that logic in general? or does the rule of thumb overrule any extenuiating circumstances?
What is the age of your youngest account? That turns out to be important in advising you. If your Age of Youngest is currently greater than 12 months I would avoid adding any cards until after you own the house.
PS. We recommend that you not give people your first (or last) name in these posts, just to protect you from Identity Theft and so forth.
Thanks for both responses. Great advice, I will heed your suggestions and NOT apply for the new CC.
Avg age of all accts is somewhere between 7-8 years.
age of youngest acct is ~1m, and probably has not factored into the formula above.
I will be house hunting in the july/august range, and was figuring i could age the accts between now and then. But, why risk it. As of 1/14/19, i will only have one inquiry in general showing up on my CRAs. Which will be the one acct i just opened 1m ago.
P.S. thanks for the tip, i guess being polite is not as valuable anymore when idenity theft weighs in!
If your AoYA is under 2 months, then I'd consider adding the card now. How many accounts do you have currently? (How many closed and how many open?)
Of the four cards in your signature, how many were on your reports prior to you pulling your mortgage scores?
on the MyFico report from last week. 9 installment loans, unsure if that includes both open+closed. 4 revolvers.
avg age is 100 months prior to the new acct being added last month (i dont think its reporting yet)
only 3 I THINK. I cant fully figure that part out. The logic doesnt make sense to me.
As it shows 4 revolvers, but the AAOA did not appear to drop.