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I have no credit. I'm a student, who has never had a credit card short of a secured card I had a few years ago that I was poorly advised to close, and now I'm trying to build credit.

Conventional wisdom says open a credit card, wait a few years, then open another one, then another one, then another one, and 10 years down the line, boom, you've got great credit!

Considering I have no average age of credit to ruin and no matter what I do I'm going to have bad credit for at least the next few months until I start building history, I'm very tempted to apply for maybe 10-15 credit cards, hopefully get approved for 5, and open those accounts at once. Yes, I'll get 10+ hard pulls on my credit report, and yes, it's going to look bad for me until they all drop off in two years, but I'm going to have bad credit for the next two years no matter what I do. Unless there's something I'm missing, this seems like a great way to have 1-2 years of terrible credit, then great credit much faster than I would have had otherwise. Am I right?

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    If your current score is low enough, you'll get 10 rejections, and the hard pulls will last 2 years. – JTP - Apologise to Monica May 25 '17 at 9:58
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    Using one card wisely should be more than enough to establish good credit. The number of cards you have doesn't increase the average age of credit. If anything, cards opened later drag the average down. – chepner May 25 '17 at 11:55
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    Conventionally most people in the US are broke. Perhaps you should do something less conventional like open precisely zero credit cards when you are a student. – Pete B. May 25 '17 at 14:58
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    What do you need credit for? Live below your means and build wealth. That's a better plan than buying stuff you don't need. – zeta-band May 25 '17 at 15:25
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    @zeta-band - I fully agree with the sentiment of your comment. But obtaining credit doesn't necessarily translate to buying stuff you don't need. There are some responsible people out there. ;) – TTT May 25 '17 at 15:28
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I would not call this a "good" idea. But I wouldn't necessarily call it a bad idea either. Before you even consider it, you need to do a little bit of soul searching. If there is ANY chance that having multiple credit cards could entice you to spend more than you otherwise would, then this is definitely a bad idea. Avoiding temptation is the key to preventing regrettable actions (in all aspects of life).

Psychoanalysis aside, let's take a mathematical approach to the question. I believe your conclusion is correct if you add some qualifiers to it:

A few years from now,

  • if you have multiple credit cards,
  • and if you never had any late payments on any of them,
  • and if you have a relatively low balance (or zero) on all of your cards,

then your credit score will probably be higher than if you just had 1 credit card.

Here are some other things to consider:

  1. You are opening yourself up to risk by forgetting to make a payment on a card. Late payments stay on your report for 7 years.
  2. Some banks will automatically close your credit card if you don't have any activity for a while.
  3. This is an unnatural way to build credit. AFAIK none of the FICO scoring models currently penalize you for this behavior in the long run, but scoring models change periodically and there is no guarantee that future scoring models won't ding you for it.

And, saving the best for last:

  1. In the future when you apply for new credit on a large ticket item such as when financing a car or home, credit score is not the whole story. Your income proportionate to your available credit also matters. Credit score determines your interest rate, and your income determines how much you are allowed to borrow. Some lenders look at your available lines of credit and assume you might max them all out, and then adjust their calculation accordingly. So the more available credit you have on your credit cards, whether you use it or not, could reduce the amount of money they feel you can afford per month, and therefore reduce the overall loan amount they'll approve you for.

As for the hard inquiries, they should only have an effect on your credit score for 1 year (though they can be seen on your report for 2 years).

Final thought: if you decide to do this (and I personally don't recommend it), I would keep the number of applications smaller (3-5 instead of 10-15). I also would only choose cards that have no annual fee. Try to choose 1 card that has 1-2% cash back and make that your regular card.

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    Good comprehensive answer. – Grade 'Eh' Bacon May 25 '17 at 15:28
  • An honest "forgetting to make a payment on a card" doesn't cause a mark on a credit report. 0-30 days late is an R0, not even reportable, the reporting agencies won't even accept the data. However your card company will not be silent for those 30d, they'll be blowing up your postbox, email and phone! Getting an R1 mark takes a multi-stage screw-up. – Harper - Reinstate Monica May 25 '17 at 21:22
  • @Harper - I think there are some scenarios that "forgetting" legitimately happens. When you move you may not get your mail right away, or if you're like me you get it but it's in a box somewhere that you haven't unpacked yet, and maybe you get an email (if they know your email address) that gets buried in your promotions or spam folder. I once had a late payment that reported and affected my credit for years (on a student loan, but it could have been anything) because I switched banks and I thought I updated all of my auto-payments, but I missed one. – TTT May 26 '17 at 16:37
  • Sure, and that's why I use a PMB and an email address dedicated to banking/credit/commerce relationships (with friendly-spam unsubscribed to keep the noise down). Ultimately a credit report is about personal responsibility, and the 30d late test is a painfully sincere measure of ones ability to sort through life's noise and keep legal promises, especially in times of transition like a move. That's tougher than ever IMO given the ever-stacking array of technological distractions. – Harper - Reinstate Monica May 26 '17 at 19:30
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Yes, this is definitely possible.

You can optimize your credit worthiness within 18 months, you would first start with a secured credit card just to establish a little bit of credit history and then use that as a jumping point 6 months later to do several unsecured credit card applications.

As a student, your primary limiting factor will be your truthful income when you apply for the cards, resulting in low limits, where using less than 30% of those limits is not a useful amount of money.

Your credit scores can be looked at as a spendable balance. New inquiries spend some of that balance, low utilization earns you more of the balance. They will trend upwards with the right approach, and you can use the balance at their highs to time more inquiries.

Note: My answers typically differ in that I narrowly tailor my answers to the question asked, and don't masquerade or acknowledge the idea of advice. Impulsive spenders with credit have bad credit, I can live with that.

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