Should I add a new credit card?

Question

Background: I am rebuilding my credit since returning from several years living over seas. In Dec of 2014 my FICO score was in the low 500's and I had 6-7 derogatories on each report all almost 7 years old. I have not had any activity credit wise for the last 7 years since cedit lendors in my newly adopted country seemed happy to give me loans without checking my US credit. Since I have been back I have PFD'd, DV'd and EE'd everything to death  with great success and I am down to 3-4 items which will be dropping off in the next couple of months so I am looking forward to a huge jump in my score soon, which is now appraching the mid 600's. All of my current accounts were opened since January. I have two secured credit cards $200, a Credit Care dental/medical card for $800, a car loan for $8500, the balance of which is now ~$7000. I pay off my CC balances every month. There are several older accounts all in good standing from 1995-2007 still on my record. At least one of my CR's shows a slightly high number of hard inquiries. With a 630ish FICO score I am now starting to get the "pre-selected" unsecured CC offers in the mail. My question is should I sacrifice the added inquiries to gain a card that will report to all three CRA's? I see some people on here with like $300,000 combined available credit from several CC's. What is the "right" amount? Thanks in advance. Joe

Answer 1

What i would recommend to do (based on personal experience, not professional advise)... Stay away from the major companies for now because you do not want to set a low precedent with them.  Wait until all baddies are off your report before trying with the major credit card companies.  After your baddies are removed, refinance your auto with DCU.  When you apply for the refi, they will probably offer a credit card also.  Whatever the credit limit is, ask them for more.  They will use the same hard pull to determine your eligibility.  After you refi with DCU, apply for a "good credit" credit card such as a Quicksilver One.  Some people have reported success with geting two cards from the same bank at once while only getting your score pulled once (for one or all three bureaus).   Regarding your question about a high available credit... There's no right amount.  Some people have a high amount available to decrease your utilization percentage when you  need to keep a balance on your credit card.  Say you have a combined available credit of $4,000.  An unxpected car A/C breakdown costs you $2500 in cash that you do not have forcing you to charge it.  You're now well above 50% credit utilization which is bad for your score.  Having a much higher combined available credit will lessen that impact.  If you have a total of $10,000 avaiable credit, that would bring you to 25% utilization.  A general rule of thumb is to keep your utilization under 30%.  It's best to keep all your cards at zero balance except for one at less than 10% utilization for that individual card.   Some people have high $300k limits simply for bragging rights.  Some do have it because it's addicting.   Once your credit score rebounds, it's fun applying for and getting approved for high limits and low APR's that you once could never get.