How Activating a New Credit Card Impacts Your Credit Score
To maintain a good credit score, you must be able to properly manage your revolving accounts. A credit card may be one the easiest ways to begin establishing credit. On the other hand, too many credit cards can lower your credit score. It is necessary to utilize credit cards correctly to create the desired impact on your credit report.
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New Accounts
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Your credit score is determined by many factors. The length of time an account has been established will affect your score. New accounts can have a negative impact on a score. If you already have decent credit, you may want to avoid opening a new credit card account. If you are trying to improve bad credit or create credit, activating a new credit card may be your best option. Once the account has been established for a while and you make timely payments, the credit card will likely boost your score.
Number of Accounts
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Creditors frown on credit reports featuring too many lines of credit. If you have several credit cards carrying balances, adding an additional card will bring down your score. Potential creditors want applicants who do not have significant monthly debt. If you have multiple credit cards, try to keep the balances as low as possible. Pay down debt before activating another credit card.
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Recent Inquiries
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Each time you initiate an application for credit, the creditor pulls your credit report. By applying for a new credit card, you are lowering your credit score. If you are sent a pre-approved credit card and did not provide the issuer with permission to obtain your credit report, you may want to consider filing a dispute to have the inquiry removed.
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