Should I get another CC in this situation?

[Anonymous]

Right now I am 20 years old and I have two credit cards. My EQ score is at 745 right now, but I haven't checked my TU score. My Wellsfargo card has a $4200 limit, and my Citi card has a $3700 limit. The Wellsfargo is a little over two years old (27 months) and my Citi card is only 16 months old. I also have a SL of $3500 that is 14 months old. For some reason my credit report claimed AAoA as "1 year" which is strange to me, because it should be 1 year 7 months.

Anyway, I've read around and most people seem to think that it's far too dificult to achieve 800+ with only two credit cards. If I get another CC now, it'll drop  my AAoA to about 14 months instead of 19, so I'm sure my score will go down. 

I am not planning on getting a home loan or even a car loan any time soon, so I'm not too worried about that. The main perk of good credit right now is that my CC's keep lowering their APRs and my car insurance is super cheap!

Anyway, I would be curious to hear reasoning of why I should or should not get another card, and if I should, why having only two CC's isn't good enough for getting 800+.

Also, for those who say I should get another one, any recommendations? I've looked at the credit card section and the ones that show the lowest APR are Iberia Bank and Pulaski, which I personally have never even heard of. Citi has a card that says "as low as 8.74%." Applied Bank also has a low APR, but I have never heard of them either. So anyway, a low APR and/or a nice rewards/benefits program would be nice. Any suggestions on companies for cards and why would also be awesome!

Thanks for all the help guys!

Jeremy

[llecs]

AAoA is rounded down to the nearest who number. In about 5 months, and assuming no TLs are added or drop off, then it will read 2 yrs.

IMO, if you add a store card then you'll be in a better position with your mix. Otherwise, I'd let things age. I bet you can hit 800 without a mortgage or without getting more CCs.

Don't app for Applied. Trust me.

[Anonymous]

Ok, that's an interesting idea. I've never really thought about a store card. What about a gas card? I'm just trying to see my options here. My main goal is to have 800+ credit score by the time I go to buy a house (After I'm all done with school, which could actually be a long time if I go to med school when I graduate, haha.)

Most people just seem to have claimed it to be difficult to get a really high score with only two CCs. You suggested a store card, so if I were to do that, do online stores work the same as a normal store? For example, would a Newegg.com or Amazon.com card work just as well as say Target? Because I never really shop anywhere consistently in store, but I use Newegg and Amazon much more frequently, so I'm just not sure it would be worth having like a Target or Fred Meyer card if I never even shop there, you know?

Thanks for the input!

[llecs]

Store card, gas card, Amex, etc. Ask around in the CC Board, but there are great CCs out there that are scored as a charge card on your reports. My favorite is Macys. I don't shop there, but they started me with $300 just over a year ago and am already at $1800. Bloomingdales (same issuer) also started me with $300 at the same time as Macys and am at $2300 now. Very generous with their CLIs. IMO, Target stinks; everyone starts with $200 with no CLI requests. Can't speak to Newegg. Seems like the Amazon is actualy a Visa CC issued by Chase and wouldn't be a charge card. In short, you need a CC that reports as a "charge" card.

[Anonymous]

Interesting information. I will ask around on the CC board. I don't think it will hurt my scores too much (to really affect my car insurance price) if I get a charge card. One other question I have though, is why it is better to have more cards than one or two. Why exactly does that make it easier to get a higher score? (Assuming you manage it well, of course!)

I actually just checked my TU score and it's at 733, so not as high as my EQ, but not bad either. The reports are basically the same, the only difference is the account balance, which is different by about $120, since I paid off one of my cards and I only have a small balance on the other that was reported. Both reports also claim I have a "high" balance in reference to my SL though, so I thnk I'm going to pay off the part that can accrue interest this summer when I'm working full time and leave the subsidized part. Thanks again for the info.

[haulingthescoreup]

The more positive TL's (tradelines; credit accounts) that you have reporting, the more good history piles up. And it appears that the scoring formula favors those with 3-5 cards.

For retail (=store/ gas cards), do understand that to count for credit mix, they can't have a Visa/ MC/ Discover/ AmEx logo on them. They must only say Chevron or Macy's or Home Depot or J.Crew or whatever. These can be helpful because again, the scoring formula likes to see one. Other potentially higher-level CL store cards: Home Depot (Citi), Best Buy --store card only (HSBC), Macy's/ Bloomingdale's/ Nordstrom. Check out the bank that issues the card: a lot of upscale stores have cards from awful banks. I treat my BB store card very gingerly indeed, but then, it has a $4K CL, which is great for a retail card.

You're probably going to need to have a much longer credit history to hit 800, but you're certainly headed in the right direction. If you want to model your credit on some pretty successful members, check out the FICO High Achievers thread in my siggy. We collect feedback from members on the + and - comments that they get on their FICO score reports to attempt to paint a picture of what makes the FICO scoring gods happy.

[Anonymous]

So according to what you've said and looking at the high achievers, it would seem I should have at least one more card... Would three be enough? I realise it would drop my score right now if I got one or two more cards, but in the long run would that help my score far more than just staying at two? I'm assuming if I grab a new card that my scores will probably drop like 20 - 40 points, but that's just an estimate based on what I've seen people talk about here on the forums. I'd assume it would drop even more if I got two new cards. I would really like to have a good rewards card that I can rack some points up on over the years. I have a rewards card right now, the Citi MTVU student card. This one. I'm just not sure if I should keep that one and maybe ask them if I can get a lower APR or get a better rewards card. You guys say I should get a gas card or store card, so I think I should probably do that.

Would you recommend that I stick with the Citi card I have and try to get a better APR or grab a better rewards card? I'm just thinking that if I'm going to end up with four cards total, it'd probably be better to start them off early so they can start building account age, rather than picking them up slowly over the years so that they drop my account age each time. If you think I should get a nice rewards card, do you guys have any suggestions? I think I'll ask around on the CC section of the forum too. Thanks!

[haulingthescoreup]

I'm going to leave card choices to the others, but a quick comment about a score drop: I'd say that for one card, it wouldn't drop much, and it might not drop at all. For two cards, maybe 10-15 points. Your scores would probably have recovered within three months.

That's what happened with me when I picked up a new card and a HELOC within two months. I didn't get whammied until I went on my app spree (necessary, but painful.)

Sometimes the score formula "wants" you to have a few more open TL's, and so you're not penalized, or not a lot. Also, the formula expects you to get new credit when your AAoA is low; it's part of the deal. A lot of the people who get hammered are those with really long histories, as they are expected to be happy with what they already have.

[Anonymous]

Awesome, that makes sense. I think I'll go with getting at least one more card, maybe two. That way they can be building up my credit over the next few years and I shouldn't need anything more. Thanks man!

[Anonymous]

you're not going to hit 800 for awhile