There is a lot of confusion surrounding credit scores and how they are affected by different actions taken regarding your credit. One question that often comes up is whether or not opening a new credit card account will damage your score. Let’s take a look at what factors influence your score, and what you can do to protect it.
Why you would want more than one credit card
There are several reasons you may want to have more than one credit card, like being able to capitalize on rewards point sign-up bonuses or making use of a joint credit card for common purchases. But this may make you wonder how it will affect your personal finances and if having multiple credit cards is bad for your credit score.
When applying for, using, and making repayments on any credit products will affect your credit score. This includes taking out a second credit card or applying for multiple cards at once.
How credit cards influence your credit score
A second credit card, when used with good financial discipline, can help to improve your credit score. Demonstrating excellent credit habits such as paying your bill in full every month may aid in raising your score. This is due to the fact that card providers now report on your good credit behaviors to the major credit reporting bureaus (Equifax, Illion and Experian), rather than just negative events.
The easiest way a second credit card may damage your credit score is if you enable debt and interest prices to become out of control. Any bad credit behaviours, for example multiple cards and skipped minimum obligations, will be recorded in your history which then lowers your score.
Make sure you know why not fixing your bad credit will cost you.
Credit cards are a necessary part of life for many people. When used responsibly, they can be a great tool to help improve your credit score and get you on the path to financial success. However, before signing up for a new card, it’s important to do your research and compare rates and terms.
If you’re looking for ways to improve your credit score, call Clear Credit Solutions. Our team of credit repair experts will be able to help you begin our credit repair process and answer any questions you may have. Contact us today for a free credit file assessment! Let us help you fix bad credit and achieve your dreams!
