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Viki
Lv 4
Viki asked in Business & FinanceCredit · 1 decade ago

Building Credit - How am I doing?

I just paid off my main credit card, and requested and received a credit limit increase, from $1,500 to $5,000. I also applied for and was approved for a second credit card, with a limit of $5,000. My only other debt is under $1,000 on a jewelery store credit card.

I have very little credit history, but my score is good, according to creditkarma.com (how accurate is that, does anyone know?), around 750. According to the website, I can make up to 4 more hard inquiries into my credit before it will negatively affect me.

One of the negative things affecting me is the short average age of my accounts. I know opening that second card will negatively affect that further. However, I figured the available credit/used credit ratio would balance that out a bit.

My main question at this point is whether I should apply for another credit card, to further expand my available credit, that way I can sit back and wait for the accounts to age, or if I should let this new one age, and then open a new one some years down the line? I'm worried that if I go with the second option, I'll be stuck in a sort of yo-yo pattern, where I keep on raising and lowering the average age of my account. Seems to me I should open my intended amount of credit cards, and then stop and let them age (I plan to have one bill automatically paid by each credit card, and I'll pay off the balance each month).

What do you think?

Update:

Oh, I'm 22 years old, that's why my credit history is so short.

Update 2:

To the 3rd answerer: I don't know, the CreditKarma website seems to indicate that my score is lower than it could be because I have too FEW accounts.

3 Answers

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  • 1 decade ago
    Favorite Answer

    Good Job!

    Do not get another credit card, it is totally not necessary.

    In order to build a good credit rating you need both types of credit, revolving credit like credit cards and installment loans. You need an installment loan.

    Do you need a new bedroom set? sofa?, most furniture stores offer one year interest free on their purchases. Make sure that the company you choose reports to the credit bureaus. Of course any car loans, mortgages, etc is an installment loan.

  • 1 decade ago

    No, do not apply for any new cards. While it may not impact your FICO, lenders look at too many recently opened accounts as "shopping for debt". Keep the cards you have, never go over 30% credit utilization and make timely payments. As time passes, your credit history will lengthen and your credit score will go up.

    Creditkarma is pretty accurate plus or minus 50 points and you have a good credit score either way. Congratulations!

    Excellent article here: http://www.thestreet.com/story/10383426/1/five-mis...

  • ?
    Lv 7
    1 decade ago

    It is not accurate. The only true score is what you pay for from the reporting companies

    Do not apply for anymore credit cards. You truly only need 1

    My score sits at 800+ and I have 1 card

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