One of the hot topics the past few years relates to credit, since it is so difficult to obtain these days. It is quite possible that certain actions you have taken or are thinking about taking now, will hurt your credit score. Find out what they are.
Should I apply for a credit card to get a shopping discount?
Many shoppers are eager to get that ten to twenty percent discount off their first purchase by applying for the store credit card. While it is true that having a high amount of credit available to you can lower your credit utilization ratio, several credit inquiries in a short period of time can be more detrimental to your score. It is okay to open up one or maybe even two store credit cards, but the credit bureaus track the number of applications or what they call inquiries which raises a red flag.
Should I apply for a credit card with my spouse?
It depends. If both spouses have excellent credit scores and reports, then it is perfectly fine to open up joint credit card accounts. However, if one spouse has a credit score in the 700 plus range while the other is sub 550, then it can be detrimental to the spouse with the higher score. The result is that it will be more difficult to obtain a mortgage with favorable lending terms.
Should I be hesitant in closing my oldest credit card accounts?
There’s a misconception that closing credit card accounts that you’ve had for a long time will lower your average age of credit history. That’s not true at all. Even if you close a credit card account, the history stays on your credit report.
Will shopping around for the best mortgage rate hurt my credit score?
Any time you apply for a mortgage an inquiry is generated which is documented on your credit report. As we’ve previously mentioned, it can be hurtful if you have many inquiries in a short period of time. However, under the new FICO scoring formula, you can shop around for a mortgage, auto loan or student loan with no impact to your score if done within 30 days. If it is within 45 days, it is only counted as one inquiry, no matter the number of inquiries.
Old debts can eventually hurt your score
Any debt you owe, regardless of whether or not it is due to the government, can eventually hurt your credit score. The lender can file a claim with a collection agency which will be tracked on your credit report.
Do you have any other questions? Ask your credit score questions online.
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