Do credit cards improve your credit score?

Question

Im trying to improve my credit score, (which is in the medium poor range), I just opened an unsecured credit card with a small credit limit, (300$), I was thinking of opening another small acount, Would opening an additional small account and keeping both accounts in good standing improve my credit score more or less than just maintaining the one account that I have opened?

Answer 1

Yes, as long as you always pay them on time, and dont carry a large balance, and also dont have too many of them.

Answer 2

Too much revolving debt can hurt your credit score. Another option would be a small CD secured bank loan. If you can find a bank that has no minimum loan amount, then take whatever amount you can afford and open a bank CD. Most banks will loan against their own CD's no matter what your credit history might be because it is considered a cash secured loan. Not to mention that the interest rate will be MUCH lower than on a credit card. Put the borrowed money into an account and set up an automatic payment from that account to the loan. Then all you will have to worry about paying is what ever interest has accrued. Hope that makes sense!

Answer 3

Actually, having too much available credit is a liability and will start to count against you. Watch the amount of credit have available compared to how much you earn. That is what lenders will be looking at. If your credit is only like a third or fourth of your earnings you should be boosting your score as long as you keep all payments on time. Not just credit cards but utilities, insurance, and car payments too. Just keep the one card in good standing for now so as to keep from over extending yourself. Taking out a loan for a car or other small loan is a another good way to boost your score.

Answer 4

Every time you open a new account there is a dent in your credit history. The best way to improve your credit history is keep the current account in good state.

1) Pay the bills on time.
2) Don't open to many accounts in one year.

This is just a few points. You can check yahoo financial for points.

Answer 5

You need to keep your debt to credit ratio in mind. Some credit is good, but a lot may make lenders nervous since you could overextend yourself. I think it's something like your debt service payments on credit cards should be no higher than 1/3 or 1/4 of your take home pay. But if they are both small, and you keep up with them, it couldn't hurt.

Answer 6

Opening both will help more than just the one, but youdon't want to open to much credit. Be sure to only use the card for things you can pay off as soon as the statement arrives. That's the best way to keep in good standing and not lose control and make things worse.

Answer 7

Most certainly! Any credit that you have that is paid promptly and/or on time will raise your score. A relative of mine filed bankruptcy & had practically zilch, he always had to use cash. He finally acquired a card with a small limit, paid regularly, & within 5-6 months his score went up app. 20 points! His limit was also doubled. Use only ONE card by the way.

Answer 8

Too many credit cards can actually hurt your score. But if you are just now obtaining credit, it is okay to open a few at a time.

Answer 9

A credit card is mainly to show that you are a good credit risk, i.e., you pay your bills on time. Just keep doing that.

The more you have in your credit line (i.e. the limit on your card), the worse it is. It shows that you have immediate access to a lot of money and could go into deep debt immediately.

Keep one card, and keep your credit line low.

Answer 10

yes credit cards are a good way to establish good credit....as long as you always pay on time