Stop! Before You Open New Credit

Stop and consider before you open a new line of credit, a new credit card::

Opening new credit temporarily lowers your credit score, because it is unknown how you will manage the new tradeline.

If you plan to purchase an automobile or home in the next year, do not open any new credit. (This is assuming your credit report is not blank with no credit ever used.)

If you are just starting out building credit or you are restarting after bankruptcy, then you need two or three tradelines, so proceed with the application, but keep your balance low and pay the bill in full each month.

If a company waves an enticement: “open a credit card to save 10 percent now,” ignore it. The savings isn’t worth the hit to your credit report. If you have a Visa or MasterCard, you don’t need all those individual store cards. But, if you have a favorite store you shop at a lot, then there’s nothing wrong with carrying their card. Just limit it to 3-5 cards max. Personally, I have two store cards. I don’t use them every month.

Your insurance premium is also partially based on your credit score — a fact that is good to know.

If you’re looking for the path to excellent, top tier credit in the fastest way possible, pick up a copy of Build and Protect Your Credit Like the Pros. It will take you from basic to expert!

Available in Kindle and Paperback

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