New Credit – A Small Factor in Your Credit Score

Are you desperately seeking new credit?

The final 10% of your credit score is made up of your new credit. This could be inquires, getting pre approved for a mortgage, or actually getting more credit like a new credit card. This is a relatively small category and has more guidelines than rules. Inquires will only impact your score for a year (but will stay on your credit report for two year).

Credit rating agencies are looking for people who seem to be in financial distress. Did you get a second mortgage, a personal line of credit, and two new credit cards in a month? Probably a warning sign and they will lower your credit score accordingly. There will be minimal impact if you have one inquiry that seems reasonable aka your first mortgage or a second credit card.

Keep in mind that if you do apply for two new credit cards you will get hit twice. First, for the new credit and second, since they will lower the length of history. These two new credit cards will have an age of 0 that get thrown into your average and bring it down.

These three changes will improve your credit score:

1. An inquiry you make to get your credit score or report will not impact your score so check your credit annually.
2. Carefully consider if you need any more credit. Do you really need that HBC Credit Card?
3. If you are making a big purchase do all your credit checks in a short period of time (a week or two) and they will be grouped as a single inquire.

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