0_0_0_0_150_223_csupload_61603533_largeWith the holiday season approaching upon us, many people seek new credit (credit cards particularly) to get ready for the shopping season. Here’s a few things to consider before you attempt to apply for another credit card:- Department stores are notorious for giving additional discounts (usually between 10%-20%) if you open a new department store credit card— oooooooo sounds like such a great deal!  What’s the harm right? You can open the account, get your discount and then close the account.  Well, the problem is that this action leads to problemS:
  •  you now have an inquiry on your credit (too many inquiries will not only lower your overall credit score but looks bad to a lender as it makes them feel you’re impulsive, not to mention that they are wondering why you’re still applying with them as well— hmmmm did the other lenders turn you down or are you just racking up debt? (Rule of thumb, if you get turned down for a credit card, don’t go on an application spree! Take measures to see why? Chances are if one company declines you, others will too).
  • Another issue is that too many new accounts will lower the AVERAGE time of your revolving accounts. Part of credit score calculation, is how long have you had revolving credit. If you have ONE credit card for 10 years and go and open 3 new ones, your average time of ten years just got divided by 4 (as you had only 1 card before PLUS the 3 new ones) so now your NEW AVERAGE time of revolving credit history is only 2.5 years, (that type of “average time” drop can cause a substantial decrease in your score).

– THEN if you begin using the new cards, watch out as your score will drop more as it will show you are incurring more debt even if you keep them within a low utilization ratio.- The key is BALANCE. You need to have different types of credit. Although having revolving credit is important as it shows you can handle having money available (and not using it – low utilization ratio),  if you have too much revolving (credit cards) and no installment loans (car, house, etc…) your credit score will NOT be at its optimum.Keep in mind that lenders have a tendency to be more liberal or more stringent with their approval process and parameters during seasonal times of the year, so please don’t rush out because the holiday season is approaching and max out your existing cards or run out and get new ones!

Stay ahead of the curve!Proceed with caution and always remember, when in doubt do WITHOUT!
We’re always here to assist you with your credit needs, and if you’re caught in a debt spiral, please call us for a savings quote on getting any type of loan you have paid off sooner while making the same monthly payment with NO OUT OF POCKET COSTS, through our amazing loan acceleration programs!
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