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Question By
ShaolinX

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Will opening a credit card raise your score?
I was wondering if just the act of opening a credit card alone will improve your score for having an additional credit line open or will you have to utilize a certain percent over time to increase your score?

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Many Factors

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As ractsrd said, opening a new card will boost your available credit, which means money owed on other cards will average lower (for example, 30% utilizsation on one card becomes 15% utilization between two cards (if they have the same limit). It's also important to keep in mind the age of credit history, which ractsrd also mentioned. Opening a new card now will help your score down the road, since your average will increase with time, but opening a new card now will lower your current average age of accounts... so in our earlier example if you had a card open for 2 years, adding a new one would bring the average down to 1 year. You will typically want your average to be more than 8 years and you would want to achieve that as soon as possible.

And yes, to continually boost your score, you need to actually use the card. Somewhere between 1% and 20% of your total balance should be considered your card's "budget" -- use your credit card like a debit card to rack up rewards points and pay it off each month before the interest comes out with money from your checking account that you would have spent on those purchases anyway. Your credit score will skyrocket and you'll have tons of cash-back-rewards or frequent-flyer-miles, etc. depending on the rewards your credit card offers. The key is to remember that a credit card is a loan, not free money. Every cent has to be paid back and keeping a balance for longer periods of time will cost you money in interest.

One rule of thumb I always follow when consiering a card is a monthly or annual fee. If it has a fee I won't touch it. If there is no fee, then the interest rate is obsolete, since the method I mentioned (paying it off before the interest is due) makes the interest rate irrelevant, since you'll have a zero balance when the interest comes due. If the card has a monthly/annual fee then you have to pay it anyway, whether you have a balance on your account or not.

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takeshi74

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Do not simply consider AF/no AF.  Consider total cost/benefit.  Run the numbers for your spend.  My biggest rewards come from cards with AF's and the rewards outweigh the AF's by orders of magnitude.

If using cards for rewards the APR is irrelevant.  if you carry a balance and are subject to interest then the intereset will kill any rewards.

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two factors

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When you initially open up a new card, there's a hard inquiry that temporarily lowers your credit score.  But, once the new card it active, your combined credit limit will go up - and, unless you abuse the card, your utilization rate will go down - raising your credit score.

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Reply by
takeshi74

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Impact of HP's is not fixed either.  Whether or not the hard pull lowers score depends on credit profile.  Total limits are increased when the card begins to report -- not when it is active.

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Open New Card

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Generally opening a new account increases your total line of credit and immediately decreases your utilization. Use the card to establish a positive history and keep your balance to 20% or less at statement closing time which also boosts your score. The new account will lower your age of credit history depending upon what other accounts you hold and how long they have been active so that could lower the increase just a bit. I am assuming of course that everything else on your report is acceptable.

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Score Help with CC

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Got to Capital One and get the QuickSilver card. They will give a card no matter what you score. They may only give you $300 to start but, if you make your payments on time for 6 months they will increase after 6 months. Now my suggestion to you all to deal with one card only to work with you credit score instead of trying to fuss with so many cards. Once you get your score to where you need it.  No this is not a secured card and no there is not anual fee either. Close that card and move up to another card. Since you have re-establised your credit. Just move up to another one of their cards that works for you. Or even applys to your own banks card. Hope this helps.

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Will opening a credit card improve score

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Yes.  It did mine.  I was quite surprised.  I believe it jumped by 50 to 75 points instantly...

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Yes and no well maybe!

Helpful to 24 out of 31 people

Understand my title, it truly depends on your credit, say for example you have "fair" credit and you apply for a card that is for "excelent" or "good" credit than you will more than likely be denied.  The problem with this is that while you were denied for the card, and the company has left you with a feeling of  dissapointment,  but hold on, they did give you something.....   A hard credit pull. which can pull down your score. as far as I have seen in my experience with credit cards, "if approved" you will typically see a drop the first month "the hard pull showing up" and then the account is reported which restores order. Now this can leave you scared because on one hand CK says you have "low approval odds with x card and recomends card Z with a $99 a year fee and $50 application fee." on the other hand you apply for the "Black" card that requires an 800+ score if you're in the 600s  I would recommend looking at sites that offer a "peek" at whats available first.  The cc companies want you as a customer and will offer their best foot foreward thats not to say if you ask for a high intrest no reward card thats below your "pay grade" they wont give you one but as I was saying for the smart shoppers a lot of companies give you the ability to input some basic info and do a "soft pull" which lets them see basicly just your score and picks the best cards to match you.  If you decide to take an offer than they do a hard pull but at least you can be pretty confident that when the pinwheel stops spinning, its's going to say "congratulations" instead of "we're sorry but at this time..." and it wont be a wasted credit pull. The bottom line is yes a new card can help your score however, it's not the card, it's what you do with it. eg using less than 30% available credit, payments on time ALWAYS!!!!!  Can't stress that enough even the minimum on time is better than a full payoff a day late.

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 Good advice from the other two responces. Sometimes as in my first and second card (which fee was lower than the first but still) A fee was acceptable to me. I had to start somewhere. Within a year I have closed my first account because the fee(s) were outrageous but it did allow me to get my second card with a low fee and 2 others with no annual fees in a year or a little more. I worried a bit about closing the first but in the end my score still rose because i had opened a no fee, better rate card with a larger limit in its place. This stuff works but it is kind of a game. As long as you realize that and are carefull with payments and charges, you can do a lot in a year. Good luck. 

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Helpful to 5 out of 7 people

It's never just a matter of the change itself.  It is a matter of one's credit profile and how the change impacts that credit profile.

Opening a new card could lower person A's score.

Opening a new card could raise person B's score.

It all depends on the specifics.  Never assume fixed impacts for changes.

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Credit score boost

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When u got your first secured card  what increase or how many points did your score rise

Reply by
Noreply300

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Helpful to 2 out of 2 people

Will I see a point increase on my first bill just by opening a secured card account by Cap One

Reply by
Noreply300

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Helpful to 0 out of 1 people

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Reply by
seanryder1

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Helpful to 6 out of 7 people

My score jumped 86 points from opening 1 credit card.

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building my credit

Helpful to 1 out of 1 people

i have a tu score of 580, a eq score of 595...I just now got a capital one platinum card. i have 4 collections, 1 account and 6 month payment history....My payment history standing is excellent and i am about to just now start using my credit card which i will only use 30% or below...How long will it take me to get to GOOD credit standing and then to excellent???

Reply by
Waznyk

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Focus on paying off your collections first that will hold down your score regardless of on time payments . As the collections do report every month

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