Credit rating implication of additional cards

[Elan]

I have had the same Visa and AMEX cards forever and they are my only two credit cards. Always paid in full. However, there have been a few credit card deals lately that I've been interested in exclusively for the enrollment perks (primarily Visa). So, my question is: What are the credit rating implications of getting a few (2-3) more cards (that I'll seldom use)? What about when I cancel the cards (likely after the first year)? My credit rating, last time I checked was 780ish, IIRC.

 

[akp]

Very little impact

You should see about 3-5 pts for each hard inquiry (application) though in some cases you can do applications at the same time and lump them under a single inquiry.

You probably know this already, but don't cancel your old cards. Age of credit is a favorable factor in your credit score, and having those older cards help with your average account age calculation after you cancel the new cards.

Before you cancel the new ones, call and see if they will give you a retention bonus to keep the card. If they won't, see if they'll downgrade the card to a type that doesn't require an annual fee.

CreditKarma and Credit Sesame (free services) both have simulators where you can check the impact of opening new accounts on your credit.

There are some GREAT bonuses right now!

Anita

 

[sstug]

I am refinancing my mortgage (closing today) and found they check for any credit activity such as new cards over the last 90 days. So it could have a negative impact on getting approved despite a credit score of 800. I am refinancing less than 40% of my home's value and they still put me through the same checks as a new home buyer. They are very strict with mortgage approvals now so consider this if you have any plans to apply for a mortgage any time soon.

 

[akp]

Ooops, sorry!

I should have been more specific in my response - sorry.

Getting new credit cards should be avoided if you're getting a loan in the next 2 years. Even though it doesn't have a big impact on your credit score, additional requests for credit are not viewed favorably in the loan application process.

Anita

 

[BocaBum99]

It's not how many card you have. It's the percentage utilization on the cards you have that make the biggest impact on your credit score. You can have 20 cards, if they are all utilized less than 10% of their credit limit, you are in great shape.

yes, you want a long credit history. Keep any cards you have over 10 years old. That gives you bonus credit.

applying for credit does hit your score temporarily. But, after a few months, that effect goes away and the credit cards you do have make a difference if you use less than 10% of the credit and pay it off on time.

 

[loafingcactus]

Exactly. I had a "negative finding" on my credit report because I had only one card so my percent utilization was high. The new card I opened to get Hilton points will actually improve my credit rating after the new credit item ages out.

The whole thing is ridiculous... So glad I have a credit union for important things. My credit union actually pays attention to what the items mean and I can deal with errors just with memos directly to them, and they also consider my assets- ridiculous that the better off you become and the more you just pay things with cash, your credit score goes down, lol.

 

[vckempson]

It's not how many card you have. It's the percentage utilization on the cards you have that make the biggest impact on your credit score. You can have 20 cards, if they are all utilized less than 10% of their credit limit, you are in great shape.
.

Exactly. Adding two new cards could also raise you credit rating if you spread your usual debt over 4 cards instead of 2. Even if it's the exact same total debt, your % utilization on each card will be less. The worst thing to do is put it all on one card.