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AZSwede

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Opening a new account - effect on rating.
My credit score is excellent - over 800. Average age of accounts is just short of 8 years. Have a good deal on something if I open a credit card with them....can save $100. Should I pass on the savings and keep my score?

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When you open a credit card, you have about 3 effects on your credit score.   First, you will take a minor deduction for the hard inquiry which will be done.  Usually 4-5 points.   The next item is your average age of accounts.  As this will be a new account, it will lower, depending on the actual age.  You would add all agents up together, not just compute the current average age.   Overall, you see a reduction in your credit score ranging from 10-20 points when you take on a new credit line.  The minor reduction would begin trending upwards shortly thereafter and you should be back near your current average in about 6 months as long as you continue to manage the card correctly.   Initially, the new credit line will decrease your utilization, although depending on how you use it would determine your future utilization.  Another item to consider that many do not, is how this credit line affects your overall debt to income ratio.    Overall, in my opinion is that your credit card line of credit should not be more than 30% of your current income level.

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