Author Topic: Travel Hacking/CC Churning and Credit Score  (Read 1880 times)

stlbrah

  • Bristles
  • ***
  • Posts: 430
Travel Hacking/CC Churning and Credit Score
« on: May 27, 2016, 08:38:23 AM »
I started travel hacking last year and opened a few cards and my score has gone from 800 to 720.

  The drop was also from closing out some longer term cards I had, not just from opening new accounts (noob mistake really, but whats done is done). My credit history was pretty simple prior to the travel hacking, only ever having a few CC's.

  I will also possibly be closing out 1 or 2 accounts in the next 6 months to avoid annual fees so credit will get dinged a bit more. The option to downgrade these cards that I plan to close to free cards doesn't exist since they are co-brand. I plan to keep a couple of the other travel cards and just ask for retention bonuses to make up for the yearly fee.

   I am wondering if ~720 is at a point where I should lay off for a while and let it recoup and not open any new accounts. I have a large expense coming up soon and I was thinking of churning another card for a signup bonus, but wanted another opinion.

Thanks!

charis

  • Handlebar Stache
  • *****
  • Posts: 1738
Re: Travel Hacking/CC Churning and Credit Score
« Reply #1 on: May 27, 2016, 09:10:07 AM »
I would probably let it recover.  Mine has never gone down that much, because I've stuck to opening and closing new cards.

JZinCO

  • Pencil Stache
  • ****
  • Posts: 701
Re: Travel Hacking/CC Churning and Credit Score
« Reply #2 on: May 27, 2016, 09:51:25 AM »
Do you plan on taking a loan out anytime soon?

If not why worry? There are of course alternative methods to qualify for loans without a credit score (according to Steve Stewart, a PF blogger, this isn't as hard as it sounds).

I also noticed that my credit score has not gone down over the past year (with 15 credit lines opened over that time). In my experience, there will be an initial drop as you observed and then a random walk around that point due to the minuses (of which you are aware of) and pluses such as lower utilization rate and having more lines.

stlbrah

  • Bristles
  • ***
  • Posts: 430
Re: Travel Hacking/CC Churning and Credit Score
« Reply #3 on: May 27, 2016, 02:34:01 PM »
I don't plan on a new loan anytime soon, but I don't want to burn any bridges

Thanks for the replies

tonysemail

  • Pencil Stache
  • ****
  • Posts: 725
  • Location: San Jose, CA
Re: Travel Hacking/CC Churning and Credit Score
« Reply #4 on: May 27, 2016, 03:17:50 PM »
for FICO score, a closed credit line stays on your credit report for 10 years and it's included in AAoA during that time.

I would not worry about doing further damage to your score with a new credit card application.

Do you keep your utilization ratio at 0%?
Try doing that for a month and see if it helps with your score.

bacchi

  • Magnum Stache
  • ******
  • Posts: 3922
Re: Travel Hacking/CC Churning and Credit Score
« Reply #5 on: May 27, 2016, 05:19:22 PM »
Yes, pay your credit card bills early in order to keep the utilization low.

stlbrah

  • Bristles
  • ***
  • Posts: 430
Re: Travel Hacking/CC Churning and Credit Score
« Reply #6 on: May 31, 2016, 01:01:26 PM »
Based on the advice of the last 2 replies, and also some google searches based on them, it seems like a person would actually be better off having several cards vs 2 or 3, because the credit utilization would be lower split across the cards.