They say applying for new credit can hurt your score, but?

Question

having high credit limits with low balances will raise your score.

So if I open up a new card with a 5,000 balance and don't use it, will it help or hurt?

Answer 1

The thing that hurts your credit is the inquiry when you apply for the card. But, the inq will hurt less and less as time goes by. By 6 months, it will hardly have any impact and at a year, no impact at all.

As for your balance, it is best if you keep it below 25%. If you can afford it ONLY if you can afford it, charge it up to the 25% mark (once) and then either pay in full or pay it off in a couple payments.

That will show that you are not only using your credit, but using it wisely.

But generally, pull it out once every 6 months or so, buy a tank of gas and stick the card away for another 6 months. And pay in full when you get the statement.

Answer 2

Make sure that you keep your balance under 50% of the maximum aloowance on the card for example if the limit is $5000, you want to keep the balance below $2500 because balances over 50% of the limit actually hurt your scores.

Answer 3

It initially hurts your score, but will only help it minimally over time since you don't use it. To help your score, you'd have to charge ~$50 a month on it, paying back in full every month. Credit scores love that.

Answer 4

well, it can hurt it. because you have "potential" debt, for an unsecured loan. so too many of those will hurt you in the long run. always, keep your balances under half of your limit.

Answer 5

It will improve your score only if you don't discontinue your already existing credit cards.

Answer 6

here are two websites I keep on sending everyone to:
try http://credit-cards.ebookorama.com
and and http://finance.ebookorama.com
these questions are easy!

Answer 7

Have a look here.