saving saving saving

[jujubiee4]

YES!! You've got it! Credit Utilization is the word/metric you've changed!! If it wasn't for the internet and things like Credit Karma I never would have learned all this either What an eye opener it's been.

You are so right. I panicked before applying because i grew up thinking all credit cards are bad and
adding more will lower your credit score. Thank goodness for the internet and for the research provided.

Bottom line is if your responsible and can PAY your cards off every month you can use some to your
advantage and lessens a LOT of travel fees.

 

[piccolopat]

Are you saying that credit cards will negatively impact your credit score just by opening them? While they can certainly cause problems if you misuse them and don't pay the bills. However, opening and maintaining new cards will generally improve credit score.

It can if it means you have too much available credit or if you open too many new accounts in a short period. Even requesting a credit increase on an existing card will impact your score. Mine dropped a bit when we increased our Home Depot card to take advantage of a 0% interest offer on a new refrigerator. Our score has been above 840 for quite some time and still it dipped below that solely because of the credit request. It went back up after a couple of months but it was annoying to see.

 

[Jen and Ashwin]

It can if it means you have too much available credit or if you open too many new accounts in a short period. Even requesting a credit increase on an existing card will impact your score. Mine dropped a bit when we increased our Home Depot card to take advantage of a 0% interest offer on a new refrigerator. Our score has been above 840 for quite some time and still it dipped below that solely because of the credit request. It went back up after a couple of months but it was annoying to see.

Increasing your amount of available credit is actually a benefit. Increasing your credit line usually requires a credit inquiry, which will drop your score temporarily. But in the long run, more available credit with a utilization below 10% will greatly help your score.

 

[pirasha]

It can if it means you have too much available credit or if you open too many new accounts in a short period. Even requesting a credit increase on an existing card will impact your score. Mine dropped a bit when we increased our Home Depot card to take advantage of a 0% interest offer on a new refrigerator. Our score has been above 840 for quite some time and still it dipped below that solely because of the credit request. It went back up after a couple of months but it was annoying to see.

This is true..sort of

Too much available credit is not a bad thing (for your credit anyway...it's back if you spend more than you've got but that's a different issue)

You are correct however that opening new cards or asking for an increase will decrease your credit score at first. So you are correct there...if someone is looking to open a loan soon than certainly OPEN NOTHING and don't buy any large purchases. Any inquiry into your score is going to initially bring it down.

However after a few months it will bounce back...now you've got that new credit line with will offset you credit to dept ratio in your favor.

Now of course this isn't to say that Credit Cards are the best for everyone. They can get you into A LOT of trouble very very quickly.

But if your able to handle them and pay them off in full Every Month or more frequently (I pay my credit cards in full ever week or after any large purchase) If you do that you can increase your credit score...it just takes work and dedication....and organization, As I said. It's not for everyone

now if you open and close cards, have a lot of dept on your cards, and/or get a card closed from inactivity...that will hurt you very much.

 

[QueenIsabella]

OP, I wouldn't sweat the credit card thing unless you hope to make a large purchase (house, car) in the next couple years. You seem to have the credit card using/paying/reaping rewards thing under control, so you're good there. And a lot of things can ding your credit or raise eyebrows, even if you do everything completely right, you just have to pay attention and be aware.

OT, but a couple years ago, we moved and bought a new house. It was a corporate relocation, so the relocation company set us up with three potential lenders for our new mortgage. We worked with all three at first, chose one, and then a week before closing, they dinged us on our credit report because--get this--we had made inquiries into three different lending companies. You know, just like the relocation company told us to. It was all fine, but we had to send the "winning" mortgage company a notarized letter stating that we only inquired at the other two, and weren't actually getting three mortgages. Which I sort-of get, but geez--is there no room for common sense?

 

[pirasha]

OP, I wouldn't sweat the credit card thing unless you hope to make a large purchase (house, car) in the next couple years. You seem to have the credit card using/paying/reaping rewards thing under control, so you're good there. And a lot of things can ding your credit or raise eyebrows, even if you do everything completely right, you just have to pay attention and be aware.

OT, but a couple years ago, we moved and bought a new house. It was a corporate relocation, so the relocation company set us up with three potential lenders for our new mortgage. We worked with all three at first, chose one, and then a week before closing, they dinged us on our credit report because--get this--we had made inquiries into three different lending companies. You know, just like the relocation company told us to. It was all fine, but we had to send the "winning" mortgage company a notarized letter stating that we only inquired at the other two, and weren't actually getting three mortgages. Which I sort-of get, but geez--is there no room for common sense?

Yea I actually had something similar happen. I just bought a new car in December (old car died sadly) so I went to a car dealership and worked out a good deal and was approved for a great loan (1% woop). Got car, made first payment..thing were great.

Got a letter from the car dealership saying I was not approved for the loan...turns out they inquired, approved my loan, ...then after setting that up inquired my credit AGAIN. So of course I failed because I had just taken out a loan....WITH THEM.

Some people just go through the motions and don't take any more effort than that.