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Credit Score Improvement
Ever since buying a house, everybody wants my money! I have been getting a substantial number of credit offers, for mortgage refinancing, home equity loans and, lately, for numerous credit cards. And I do mean numerous! I've been diligent and worked hard to improve my credit: getting "caught up" on some, getting rid of high interest credit, etc.
I know better and throw out the re-fi offers. But I don't see any harm with having a credit card or two. All are low limits. No annual fee. And, if I don't use it,except for emergancies, how will it affect my credit score? Or will it? |
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I'd advise you not to just randomly pick up credit cards. If you really want one, pick the one with the best APR/fees/bonuses and stick with it. Pay it on time and then request a limit increase.
Yes, having more credit available to you will up your credit score, but ordering 50 different cards to get 100,000 worth of credit isn't the way to go. Get one card and build the limit on it. I'm 19 and have a score of about 740. I have two cards, both American Express - one credit w/ a limit of $15,000 and one charge card. |
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So each card possessed while in good standing (paid on time as agreed, etc) improves your score.
But you said, you don't want 50 cards to get 100,000... what's wrong with that? I think if the interest is low and there is no annual fee, no harm. After all the fifty cards improve your score and give you tremendous buying power. Do you think 20 cards to get 100,000, or 20/100,000, is a good ratio? Or say 5/10,000? A little more conservative. |
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Creditors do not want to see that you have 5 open credit cards, regardless of the balance, if they are not being used.
What that looks like to a creditor is that you have the ability to spend a lot of money on credit cards, potentially more than you have, which will impair your ability to pay back the loan you are applying for with them. Like I said earlier, stick with one, maybe two cards. Pay them on time and build your limit with them. I'm 19 and have a $15,000 with amex + their gold charge card. How many other 19 year olds do you know with that kind of credit? None, because they all do stupid things (like opening 10 different credit accounts) and get themselves into trouble. Pay your bills on time, and build your credit over time. Don't look for short-cuts to a perfect credit score. |
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