credit card/score?

Question

my credit score is 689 and i only have one credit card (limit 3500) and i was wondering if i should apply for another credit card. Is there a point in having two cards, or should I just stick with one.

Answer 1

You shouldn't have any problems applying for another credit card. As far as having 2 cards, that is up to you. If you need to keep balances separate for tax reasons, or if the new one has a lower interest rate. Sometimes you can pin a couple companies against each. Call one and say that you want to cancel because you have a card with a lower rate, they will see if they can beat and call the other company and see if you can get lower than that.


Note: don't sit on too many cards with no balance. It can affect what you qualify for when you go to purchase/co-sign a house, because you have that much money available.

Answer 2

It will affect your credit rating if you have too few credit searches (which companies do when you apply for credit) on your file. However, it can also be bad if you have too few searches.

Only apply for another card if you are going to use it - it will have a negative impact on your credit rating to have credit but not be using it.

Your credit file is measured on the following among other things:

- Number of searches on your file: 3-5 a year is considered good because it shows you're active but not desperate for credit
- Arrears/defaults: any of these are of course bad. If all your payments are on time then great news.
- Postcode, age, sex, occupation, marital status: these all affect your rating because companies use stats to predict behaviour.
- Home telephone number: if you have a landline it looks better as you're seen to be steady and reliable and therefore lower risk
- Credit utilisation: If you have £3500 of credit and are using £3499 this might be seen as negative because you're maxed out. Medium utilisation is best - you're seen to be active but not desperately out of control. Companies don't like people who don't use their credit at all because these people aren't going to make them any money.
- Electoral roll: if your name and address is registered to vote it's better - again because it shows you're not moving about all over and are easier to find if you do default.

If you're in the UK a good site to visit is http://www.checkmyfile.com where it'll give you very detailed information about your credit file and credit scoring.

It's worth bearing in mind that each credit reference agency and each financial will have a different way of scoring you. Banks use different agencies and strangely some hold information that others don't. My score is different between each of the three credit agencies for example.

Answer 3

Sure, go ahead and get another one. Pay it off each month in full for about 6 months, then you can just sit on it. NEVER cancel a card. If you're not using it, its okay to just let it sit. You have a decent score, by the way...good job!

Answer 4

Stick with one. Way too much emphasis is put on credit score. Yours looks all right to me.