Anyone involved in earning miles and points from lucrative credit card welcome bonuses knows that having a strong credit score is the difference between potentially getting approved or denied for a new card. Generally a credit score above 720 is considered 'good enough' for applying and getting approved for multiple rewards credit cards.
If you're in the hobby long enough you know that it's also vital to maintain a high credit score, so I put together a list of ways you can help you keep your credit score healthy while still earning many more miles and points. It's easy to earn 500,000+ airline miles and hotel points a year from credit cards and maintain a credit score above 720+.
There are a handful of free ways to check out your credit score for free. The three sites that offer a free credit score estimate are Credit Sesame, Credit Karma, and Quizzle. Technically these sites use a proxy from one of the three credit bureaus, but provide a close estimate of your actual FICO score. Using these sites are a great way to monitor your credit score before and after applying for new credit cards AND checking your score through these sites won't negatively impact your score.
One of the most important take-home rules of applying for credit cards for the purpose of earning lots of miles and points is to apply for multiple cards on the same day. By doing so you can minimize the number of hard credit inquiries on your credit score. The way this works is that when a bank or credit card issuer pulls your credit from the same credit bureau on the same day, these multiple credit pulls will be combined into one.
This is useful because each hard inquiry on your credit may ding your credit score by 2-5 points, so the fewer the better. The impact of each of these hard inquiries may drop off of your credit after 3 months, but it still makes sense to apply for multiple cards on the same day. For instance, if you apply for 7 new credit cards, one per day, you may have 7 hard inquires posted to your credit score. Though when done on the same day there may only be 2-3 hard inquires that post to your score.
Keeping your credit score strong is essential for reaping hundreds of thousands of miles and points by applying for multiple new credit cards. One facet of this is by “leap frogging” or applying for a new card before you close an existing one. That way you maintain approximately the same available credit and total credit lines.
Along with minimizing the number of hard inquiries on your credit report by applying for multiple new credit cards on the same day, these strategies can mean getting approved vs. denied for a new card. Likely, we are only talking about a several point difference to your credit score, but when you are trying to maximize the number of welcome bonuses you get per year, every point on your credit score can count.
One factor that goes into calculating your credit score is the average account age. By keeping a no annual fee card open for a long time you can increase the average account age without incurring any cost in annual fees. On the other hand this can help build a long-standing relationship with the bank and in turn provide some bargaining power when asking to get approved for a new card.
Often when you cancel a credit card you will see your score drop a few points from the decrease in total credit line. An easy way to avoid this is to apply for a new card and if not instantly approved call into the reconsideration line and ask to move existing credit to the new card. This works very well with most of the major issuers and having a high total credit line with the banks can often work to your advantage when getting approved for a new card. You also won’t see the small dips to your credit score by losing the credit lines.
Did I miss anything? What are you top tips to keeping a high credit score?
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