OT: Any credit report experts here?

[MattTuck]

I've always been impressed by the breadth of knowledge here when it comes to financial decisions.

I bought a house last year, and a car the year before that. With the new house, I also got an account with a propane service that required a credit check. So, I have 3 "inquiries" in the last 2 years.

I'd like to get a new credit card that offers more rewards. I currently have an Amex (use infrequently) and a Chase Freedom card (as my primary card, gives 1% cash back). The newer cards that I'm considering all offer better rewards bonus or better cash back rates. I was considering the Chase Freedom Unlimited (3% cash back), Chase Sapphire (big sign up bonus), Citi Double Cash (2% cashback) and Capital One Quicksilver (1.5% cashback) all offer better reward bonuses for signing up, or better cash back percentages). I pay off the balance in full every month.

So, two questions.

1. Will another inquiry ding me in a significant way? Not that I expect it, but our second car is a 2011 Outback, with ~150K miles. Not unreasonable to think it may need to be replaced soon, and I'd like to preserve enough 'dry powder' for that scenario.
2. Is there any benefit/downside to another Chase card? (my auto loan is through chase, and I already have the Freedom card) Wondering if going through them for another card will avoid a hard inquiry.
2a. Is there any value in diversifying to another company such as Capital One or Citi?

Thanks.

[chris7ed]

I applied for a new card and was denied. I already had too much available credit. My credit limits were increased over time. I had the limits reduced, reapplied and received the card. Point is make sure you don't have too much credit. You probably never approach the limits anyway. You might know all this too:)

[sitzmark]

Not employed in the credit industry but can comment from personal experience.

Really depends on what your score is currently and the other factors (payment history, leverage - % of credit line used, type of credit, and age of credit accounts. Inquiries (hard) drop off after 2 years, but have less impact after 1 year. Inquiries usually account for a small percentage (10%) if your overall score.

Home and auto loans are less "penalizing" than revolving credit balances. If your leverage is less than 10% of your total available credit and you have on-time payments, another credit inquiry should have limited impact and after a few months will begin to quickly adjust upward. On the plus side, if you are extended credit for the new card with a significant available balance, it will decrease your leverage - assuming you don't load it up - and therefore will increase your credit score because % credit used (or not used as the case may be) has a much higher impact on your score (30%).

Long way of saying if your credit history is sound, another inquiry and conservative use of the credit extended will benefit you in 6-18 months.

Note: another application to Chase will most likely result in hard inquiry - it's another request for additional credit and will be treated accordingly. What can help with approval is if you have a strong banking relationship (checking/savings) with the financial institution that you're applying for the CC. When shopping for the 2nd auto loan it can help if you have some history with the financial institution. A few years ago I played the dealer's loan rate against what I pre-qualifed for through my bank. Dealer asked if they could try to match it. Turned out they beat the rate writing it through my same bank - loan was less than 1%APR. Was making more than 1% interest on deposits so there was no reason to pay off the loan early.

[MattTuck]

Thanks for both replies. sitz, thanks for that detail.

[AngryScientist]

who do you use for your day to day banking with Matt?

[MattTuck]

who do you use for your day to day banking with Matt?

For all intents and purposes, I use a regional credit union for my day to day banking. That will probably change also because our new house is too far away from a branch.

[ravdg316]

Long time card churner here. My credit was never significantly dinged due to applying for cards, and the benefits far outweighed the minor drop in score. However, there are things I've learned from experience that WILL ding your credit (you can pm me for those) but anecdotally applying for new cards never caused as much drama as I had been lead to believe.

[AngryScientist]

For all intents and purposes, I use a regional credit union for my day to day banking. That will probably change also because our new house is too far away from a branch.

i've been a Wells Fargo member for forever, and if you need to find a more nationwide bank, they have treated me fairly, and have pretty good CC offers at the moment. if you are considering swapping banks anyway, maybe something to think about.

[NHAero]

Matt, I applied for a couple of new cards two years ago after repeated fraud incidents that came from using my Bank Americard cc. After the last incident it took them a week to get me a new card so no card for a week. I found that with no debt and excellent credit some applications were incredibly onerous and others quite straightforward so as soon as someone asked me for what I felt was ridiculous backup material I tossed that application.

I ended up with an Amazon Chase card which I use for all my Amazon purchases and a Fidelity card. The Fidelity card is a straight 2% and it goes into my retirement account at Fidelity.
I kept the BOA card because I'd had it a long time and I was told that if I cancelled it my credit score would drop because I had no other longstanding credit payments. At this point I imagine I can cancel it.

I have freezes on all three credit bureaus after the Equifax debacle and someone here at work had a major identity theft incident.

[Frankwurst]

I'll apply for a credit card if I'm shopping and they offer up a decent discount on the days purchase. I'll make the one time charge, pay it when it's due and cancel the card. Did it at Home Depot a couple of months ago. $50 off on a $200 purchase. I'll take discounts like that any time for the amount of effort involved. I have an excellent credit rating. Not an expert but I think the key is pay your bills when they are due. I've never been late on any financial obligation. Except when I owe my wife money.;):beer:

[GParkes]

Banker/lender here for 32 years. No, inquiries will not ding you. The volume of inquiries over a short period of time can impact you (a credit seeker that runs up cards and balances), but not in your case. If there is an inquiry followed by a purchase, such as a car, non-factor. You have prudent use of credit. Go find the best card you can. GP

[Likes2ridefar]

1 appears answered, the 2s could be beneficial to maximize $ back to you.

I use the Citibank card you are considering for most everything but have a discover cash back checking account that’s 1% for purchases up to 3k a month, a chase checking for when I need cash (almost never these days but my paycheck goes there so...) and a high yield citibank savings currently around 2.4%.

[Gummee]

One of the biggest hits on your credit is balance to limit percentage.

If you have one card that has a $5000 limit and you're at $4000 on it, you're a high credit user and your score's going to go down.

Have 2 cards w that same $5k limit, but the balances are $2k ea, you're looking good.

One of the little foibles of the credit industry

M