Author Topic: CreditKarma suggests that I open, then close, a bunch of credit accounts  (Read 1555 times)

kasperle

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I have no need for credit now, but I might in a few years. So I opened up CreditKarma to see if there's anything I could do to improve my score.

I use CreditKarma to approximate my credit score, and I've got a decent score right now: 758. This score is the result of having an "Excellent" (the highest ranking) in every category except for 2. For those categories, my ranking is "Poor," the lowest ranking that there is.

Those categories are:

1. Number of accounts (both open and closed)
2. Age of oldest open account

There's nothing I can do about the second category, since I can't go back in time. But I can fix the first by just opening up a bunch of accounts, then closing them immediately (if I wished).

I have 8 accounts (1 open, 7 closed), and I would need at least 21 to get an "Excellent" score. I also need to keep my number of hard credit checks low, so I was thinking I would just open 2 credit cards per year and close them immediately, or something like that.

This seems a little silly, but based on what CreditKarma is telling me, it might be the best way to up my score right now. What do y'all think? Do you think is a result of CreditKarma's approximations of credit scores, or do you think it's a legitimate thing one can do to improve one's credit score?

bacchi

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Re: CreditKarma suggests that I open, then close, a bunch of credit accounts
« Reply #1 on: January 17, 2016, 11:45:25 AM »
It would probably help with #1 but it would eventually catch up to you in "average age of accounts."

A credit card stays on your report for 10 years. When it falls off, it'll drag down your AAoA.

You could open 1-2 cards/year for the bonus (miles and $$) and keep the ones you like. If there's an annual fee, downgrade it to the no AF version. This will not only help your AAoA but also your credit utilization.

Or, you could all out this year and open 1/month. Hard inquiries fall off after 2 years.

ender

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Re: CreditKarma suggests that I open, then close, a bunch of credit accounts
« Reply #2 on: January 17, 2016, 01:16:00 PM »
I have the same situation (though with closer to an 800 score).

I'd not be not worried. Your score is pretty good and should go up slowly as long as you don't have demerits.

Gondolin

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Re: CreditKarma suggests that I open, then close, a bunch of credit accounts
« Reply #3 on: January 18, 2016, 09:34:29 AM »
Not worth doing unless you can rack up bonuses at the same time.

Personally, I've found that Credit Karma tends to under report scores. For example, Credit Karma was reporting my score as 744. Two weeks later I got an official report from Experian as part of a credit check that reported my score as 792.

In general, Credit other than a mortgage or other real estate leverage is very easy to get with anything over 600.