There are many blogs and sites that discuss the impact of obtaining multiple credit cards on your credit score. They largely focus around the simple concept of what happens to your credit score when you have an inquiry, and how that lowers your score a little but then that score dip recovers shortly after and you are back to normal. And that largely makes sense if you get a couple of new credit cards from time to time. But those of you that know me know that I tend to be a little more hardcore about this hobby than average. Whenever someone asks me which one credit card they should get for this game I always answer “never get one, get them ALL”!

Anyway over the past twelve months, for reasons way beyond the scope of this post, I have obtained four different mortgages and attempted to obtain a couple of auto finance deals. I figured it would be worth sharing my experiences here as some of them shed a light on the impact of obtaining multiple credit cards on your ability to obtain other forms of credit.

Impact on Mortgage Applications

I have obtained four mortgages in the past twelve months. One was a refinancing of an existing mortgage where I was paying down the balance (i.e. my new borrowing was lower than my prior borrowing), the other three were for new properties. I was approved for all four.

In each application I ended up having to provide an explanation letter – not about the new accounts, but about the new inquiries. This seemed odd to me but hey I am not the one doing the underwriting (personally I would be more interested in actual accounts opened and credit obtained than requests for credit).

For each inquiry I simply had to provide a simple explanation along with a statement of whether new credit was obtained. In most cases I simply stated “Rewards credit card” and that new credit was obtained.

You can click here to see a redacted copy of one of these letters of explanation. I never had any follow up inquiry after this and the mortgages were all approved.

Impact on Auto Loan

In addition to the mortgages I have had a variety of auto loans or auto leases over the past several years. I have never had the large number of inquiries or accounts on my credit report even come up as a question let alone an issue on any of these until my most recent attempt at getting a cash-out auto loan from PNC. It may be down to a cash-out financing being viewed as more risky (I was essentially looking to borrow money using my wholly-owned and unencumbered vehicle as collateral) or that PNC is just a more risk averse lender (I suspect the latter), but I was ultimately declined for this loan application. This is despite having a long stand and strong banking relationship with PNC and having the local branch manager appeal the decision. The denial letter was highly comical:

PNC Auto Loan Denial

I particularly enjoyed the colorful language of my apparent “pyarmiding of indebtedness” – using pyramid as a verb is certainly a new one to me. Thanks PNC! On the back of the same letter was details of the credit report used and as you can see there was certainly no issue with my credit score:

PNC Credit Score

At the time of applying I also had approximately five times the amount of my loan request in cash in my checking account, so even with that 792 credit score, no recurring debt, a history of on time payments and so on I was still consider one pyramid of debt too much for their taste.

Bottom Line

In general I have been quite aggressive in pursuing credit card deals and churning credit cards to earn miles, and over the years it has had very little impact on my ability to obtain credit including very large home and auto financing. However my clean run has come to an end and the lesson for me is that there will be certain lenders who just do not feel comfortable with the kind of actions we engage in and their impact on our credit reporting. Hopefully these real insights will help you make a better decision as to whether or not you continue to engage in this kind of credit card churning when you are seeking more significant financial borrowings.

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  • Diamond Vargas

    Would you be comfortable sharing the approximate (or exact) number of inquiries on your 2-year look back with each of the bureaus, to give a bit more context? I’m at 15 with EX, 6 with EQ, and 9 with TU, roughly split between more and less than 12 months old.

    • Sure 15 with TU, 20 with EQ, IDK for EX. And as you can see from the attachment they picked up 14 across all three bureaus in the 120 days prior to the app

      • JM

        The annual free credit report includes inquiries on the EX report. I called them up to make a small change on my report, and they mailed out a new report to me as well, meaning that if you want an updated report w/o paying for it, call them up to report any inconsistencies and they will mail you out a new one.

        • Yep also if you ever get denied credit you can request a free report. They don’t really verify if you have actually been denied credit. But I’ve just not pulled my EX in many months

  • mike

    I got the same lesson from Cap 1. I get a lot of cards including 3 from US Bank auto approved and have only been denied twice – once not unexpectedly for a second Ink card and then again for a Cap1 personal card. I already had a 8 year old Cap 1 card but still no go. I second Diamond’s request – I’m curious about not only your inquiries but your AAoA. I have 17 inquiries on EX in the last 24 months – my oldest card is about 30 years old but my AAoA is only ~4 years. FICO/FAKOs over 800 on TU, EX and EQ. I have no need for a mortgage or auto loan for the foreseeable future but still I wonder if its time to slow down.

    • My AAoA is exactly 4yrs 0mths. Personally I think you are fine, but I am kind of aggressive on this stuff. You may miss out on stuff from the odd place like PNC above but most institutions seem to look at your overall picture more holistically.

  • Jonathan

    How competitive were your interest rates? I think that’s more important than just getting approved.

    • Correct, I am aware of that but did not go into that much detail. The interest rates were generally best in class. These were not all primary residence mortgages, and one of them was quite complex where I was acting as a guarantor to another borrower, but in each case the rate was highly competitive compared to other mortgages within a similar class.

      • Jonathan

        Thanks man. That’s good to hear. I’m planning on getting an auto loan at the end of next year, so I haven’t done a new app since January. Good to know I can sneak in a few more more before then.

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  • WerewolfDad

    I don’t think PNC is a good example for the auto loan. They are notoriously conservative when it comes to lending.

    • They are a good example in that they are the one I applied for 🙂 They also had best in class interest rate for cash-out auto financing