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In short, I had bad items on my credit report that I found by getting a free copy of the trans-union report on myself. I contacted the numbers to the items on my unpaid/ bad list and after about a month I got another free report from Experian. The newer report validated all my items were settled and I called a credit card (capital one) and they gave me a credit card with a $500 limit. That is barely anything.

I am contemplating if I should open a few more various cards to gain credit-ability. in the hopes of getting my score better in shorter time.

Is this a good idea (to sign up for a few more credit cards) or should I stay the course with the one card?

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    For all that is holy, who gave you that advice !! Don't take what you cannot keep safe. – DumbCoder Apr 18 '13 at 15:34
  • so you say don't open more credit cards? – kacalapy Apr 18 '13 at 19:35
  • its a false dilemma – CQM Apr 19 '13 at 11:31
  • Were the 'unpaid/bad' things item you were not aware of? Were any of them related to credit cards? – DJClayworth May 30 '13 at 16:25
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Why do you need to "get my score better in shorter time"? Are you looking to apply for a home loan or something similar or do you just what to have a higher score up your sleeve?

My thoughts are that by opening so many credit cards you will just end up getting yourself in trouble over the long term. The way it work I believe is to improve your credit score you need to use your cards and pay them off on time. By having so many cards and spending on all of them you may end up being in a bigger mess that reduces your score not increases it. The more cards you have the more disciplined you will need to be.

If I were you I would have one main card and maybe a second backup card with a smaller limit. Use both of these cards responsibly and you will find your credit score increasing over time.

  • my issue is the limit on the cards is so small that on some things i wont be able to even us it. (vacation- airline tickets cost over the 500$ limit.) plus i can pay the cards off with no issues. and yes i want a home loan – kacalapy Apr 19 '13 at 15:02
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    @kacalapy, is the limit low because you have had bad credit rating in the past. If not get new cards with larger limits and close these ones out. If it is because of bad credit rating that you can't get larger limits, then keep using your current cards responsibly until your ratings improve and use cash for now for bigger purchases. Regarding a home loan, if no one will lend to you then you will just have to work on improving your rating and make sure you start saving for a home and prepare yourself a budget and be disciplined in managing your finances. – user9822 Apr 19 '13 at 23:55
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Applying for credit runs "hard pulls" on your account with incrementally lower your credit score for a limited time.

Long story short, no, applying for credit cards will not improve your credit score in any situation.

Yet, having multiple credit cards can make you look more favorable to some lenders, since other lenders have approved you.

The key point being that "credit score" isn't the indicator that lenders always use to determine if they will lend to you, unless it is a low score because then you will always be declined.

So it is important to know what outcome you really want, more credit or higher credit score.

  • my goal is a hither score but the amount also needs to increase. – kacalapy Apr 19 '13 at 15:03
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When you apply for a new credit card you receive a "hard pull" on your credit report which will lower your credit score in the short term.

In the long term, purely credit score perspective, it will help your credit score for two reasons. One, by having more credit cards and therefore a higher total credit limit you will have a lower credit utilization ratio which results in a higher credit score. Second, the number of total accounts affects your credit score and additional accounts help the score. This second reason, total accounts, has less of a role than the credit utilization in your score calculation.

However, it is also important that a higher credit score only assists in helping you apply for new credit (credit cards, auto loans, house loans) and helps you to recieve a lower interested rate on those new lines of credit. Just getting lots of credit cards to run balances on is not a good use of credit.

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The main problem with multiple credit cards, particularly for a person with bad credit is that they are likely to get themselves into debt.

If you want a higher score or more credit applying for more cards would generally be a good idea. The hard pull will take 1-2 points off your score and will be virtually gone from your score in 6 months. Having multiple new accounts will hurt your credit in the short term but several years from now it will improve your score and provide a buffer if you want/need to open a number of accounts in a short period of time.

The key here is that you should only use credit in situations that improve your over all financial situation. If credit saves you money or makes money over the long term then it is a good idea. If credit means that you can buy things you otherwise could not afford it is probably a bad idea and you will likely end up in a similar situation with credit problems.

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A few years ago I bought an investment property. At that time my credit was pulled by three potential mortgage lenders. This lowered my credit score. Immediately after the loan closed (actually on the same day the title transferred) I applied for three different credit cards, and each one was granted with the available new balance totaling about $60,000.

Getting the credit cards caused my FICO score to drop significantly. Since I had just completed the loan for the investment property and knew I wouldn't need to have my credit pulled for another 6-12 months, I was ok with this.

On each of the cards I put one small subscription to something I already had (for example, I use one of them for my NetFlix subscription, which was around $12 at the time and is now a few dollars more). I set them all up for monthly full-balance autopay from my checking account. The purpose of the small recurring transaction is to make sure the credit card companies don't close the accounts for inactivity.

I have never used these cards for any other credit transactions. To me, they're not "real" credit cards. Their sole purpose is to increase my overall available credit amount so my month-to-month credit reporting shows a much lower credit utilization even though my normal credit spending hasn't changed. I will never use these cards for any transactions beyond the one monthly recurring subscription. The cards are physically in a safe - I don't carry them in my wallet (out of sight, out of mind).

After six months or so my FICO score was about 70 points higher (well into 800) than it was prior to getting the cards, with no real change to my spending habits.

For me, I think it was a great thing to do, but I never carry an interest-accruing credit balance. I use credit cards (the ones with the highest cash-back percentages) for all my purchases, but I always spend less than my available cash-on-hand, and I always pay them off in full within 30 days.

If you have the discipline to NOT use credit cards to spend money you don't own, then they're a great way to increase your credit score. If you aren't good at managing your money, then learn how to use a small balance credit card correctly (i.e. treat it like a debit card and pay it off in full every month before your statement date) before trying this. Also, do make sure when you get the cards you aren't planning to get any loans within about six months as you'll take a credit hit for a while.

Finally, another interesting side effect of doing this was that the credit cards I do use all auto-raised (without me asking) my available balances! They periodically pull my credit score so it was as if they saw I had more credit available elsewhere so they raised my limits to try to get me to use their cards instead. Now my available credit on my credit cards totals around $125,000. Again, my spending habits haven't changed (i.e. I don't use the extra available credit) so my effective utilization is now much less (in my case always less than ~7% per month).

  • Since your credit wasn't bad, this answer has nothing to do with rebuilding credit. – RonJohn Jun 13 at 17:06
  • @RonJohn Did you miss the part where I said doing this increased my FICO score by about 70 points? Properly managed, multiple credit cards can be an effective method for rebuilding credit as it allows one to show a low utilization ratio (which is a major contributor to credit score). – par Jun 14 at 3:12
  • OP has bad credit. You didn't. (Otherwise. you wouldn't have received CCs worth $60K.) Thus, you didn't rebuild credit. – RonJohn Jun 14 at 3:16
  • The question isn't whether or not I personally rebuilt credit. The question is whether multiple credit cards should be a component of rebuilding credit. Let's say a person with bad credit can get three cards, each with a $500 limit and 1.5% cash back. That person should then put no more than $150 (10%) on their cards, and pay it off each month. This allows $150 for use, and shows a credit utilization of 10% which is fantastic for improving, or if you prefer, rebuilding, one's credit score. – par Jun 14 at 3:21

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