Credit Report Considerations When Applying for Credit Cards for Miles and Points

Not everyone should be applying for credit cards just to get the points, miles, and sign up bonuses.

Here’s what I believe should exclude you:

  1. You don’t pay off your credit card bills in FULL each month.  If you don’t, you’re going to spend more on fees and interest than you’ll ever earn in benefits.
  2. You’re planning on getting a big loan in the next two years.  This could include things like a mortgage or equity loan.  The reason is because you don’t want to come across as a higher risk to your lender.  Minimize your applications before borrowing money.  The reason why you’d want to wait two years is to be sure all your applications have fallen off your report before applying for a mortgage.

Aside from those two major caveats, there are probably not many reasons to be too concerned about your credit score.  Still, I’d say credit scores are the biggest hinderance keeping people from maximizing their travel credit card opportunities.

If you want to track your credit score, you can get a free (sometimes called FAKO) score from Credit Sesame or Credit Karma.  If you want your actual FICO score that the majority of lenders use, you’ll need to pay for that at myfico.com.

There is a false assumption that if you apply for many new credit cards, it will decimate your score.

Here’s what my personal experience is. It will impact your score, but the impact is minimal compared to the benefits.

Here’s a look at how my credit score has withstood the test of time.

creditreport

What’s important to notice is that 21 months ago I had a score of 786.  My score has never returned that high since.  However, my score is now 768 which is only 18 points lower then when I really started applying for many more cards. (I’ve been doing this for over a decade, but really had to slow down when I was living overseas.)  In that 21 month period, I’ve applied for 33 new credit cards.  I’ve also earned well over $20,000 worth of travel rewards.

I don’t have a mortgage or any other loans, nor do I plan to borrow any money any time soon.  As such, I could really care less what my score is, but I track it for your benefit so you’ll know that your score won’t come tumbling down.  This way I have the tools necessary to tell you to relax because this won’t destroy your credit score.

Disclaimer: Credit scores include a lot of different factors, so your score may be affected differently than mine.

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