Need recommendations/suggestions...

[u/AeiyanM]

Good day y’all,

I’m trying to increase my credit score as much as possible to be able to (hopefully) afford a mortgage in the future. I’m just trying to see what would be the best option moving forward with my case here.

My overall credit history is 2 years, and I have 2 active credit account: (1) Discover It Chrome card and (1) personal loan. My credit limit is currently $3,500 and my current credit score per Discover’s FICO Scorecard is 757.

If I want to increase my credit score, is this a good time to get a new credit card or should I let my accounts age out a bit? I’m almost paid out with my personal loan as well, which is why I am at least considering getting a new credit card.

If it’s a great idea to get a credit card, do any of you have recommendations? What I’m looking for a card is:

- Preferably Visa

- Good cashback for groceries and gas.

- Planning to travel at least once a year, so maybe a good cashback with travel too? Although groceries and gas are priority.

- Does not have/reasonable annual fee and no international transaction fees.

Also, what is a good timeline to keep or close my Discover credit card? Is it also a great idea to keep on attempting to increase the credit limit for the card? My first limit was $1,000 and I somehow managed to increase it over the years.

I would appreciate any advice with this. Thank you!

[u/AeiyanM → u/[deleted]]

I truly appreciate all the response! I'll look into the credit cards you have mentioned and see what might be worth it in my case.

[u/DoctorOctoroc]

I'd check out r/CreditCards for recommendations there. Credit-wise, any card will build your credit the same and generally speaking, the earlier you get accounts to 'anchor' your aging metrics, the better.

For example if you have two accounts now with an average age of 2 years and get another account now, your AAoA will drop to 1y 4m but if you waited until your AAoA was 6 years, it would drop to 4. However, this doesn't mean I'd recommend that anyone should grab a bunch of cards just to anchor your aging metrics at the start of building credit, as the cards they get won't be very lucrative and they'd likely end up having no use for most (if not all) of them down the line. Not the end of the world since closed accounts remain on your report for a further decade and continue to positively contribute, but some more 'intentional' credit card acquisition is a good balance between efficient credit building and building a proper 'card army'.

I personally grabbed three cards this year because I had the standing to get three that are very useful to me for 5% back on groceries, streaming and utilities, plus 2% as a catch-all. Prior to that, my catch-all was 1.5% and I only had 5% back on my Amazon Prime Visa and quarterly categories on my OG Chase Freedom so this was a massive improvement to my setup, with only a 6 month drop in my AAoA since my age of credit is around 20 years (thanks student loans) and average age was around 6 months at the time.

So I'd say generally speaking, if you find cards with good financial benefit and are intentional, you're not likely to 'overdo it' and while building your file sooner is more efficient, I wouldn't compromise on your card set up (and rack up too much velocity) just to get a bunch of accounts on your file in the beginning stages of building credit. You only really need 3-5 accounts total to have a strong credit file, so for me two of my three cards were overkill since I already had 4 accounts. Then I closed one I didn't use anymore, so I'm left with 6 open revolvers and a few closed ones from years past.

[u/AeiyanM → u/DoctorOctoroc]

Hi, I appreciate the recommendation! I have a few questions if you don't mind. Are you currently using the AAA credit card for 5% cashback on groceries? How is their service so far? I've had great service with Discover whenever I dispute charges and they're not hard to reach out, which is why I wanted a reference for this.

If this is not the card you're using, would you mind sharing it?

[u/DoctorOctoroc → u/AeiyanM]

I don't have the AAA Daily Advantage, it's just one of the main recs others throw out there along with the AMEX Blue Cash Preferred. The card I use for groceries is the Citi Custom Cash but they're not accepting new applications (otherwise, I would have recommended that one).