Last month I received a pre approved offer for a credit card from Capital One.

I decided to accept the offer as a credit card account in my own name would build up my credit score. On the day the Capital One account was listed on my Equifax credit report as a new account they also reduced my credit score by 32 points.

So while opening a new account in the long run it will probably build up my credit score, medium term it has done a fair bit of damage to it.

Yes accepting credit tends to lower a score, timely payment of credit bills tends to raise the score. So yes in the long run having some credit accounts and no late payments on them helps the score.

One thing that also hurts a score is having too many credit accounts open, they add up the available max credit lines on the accounts and consider that you could in theory run up a large debt.

Even checking your own credit history/score hurts you and deducts points from you. So those ads that tell you to check your history and check it often are actually telling to hurt your credit score.

Actually, when you yourself check your credit score it has absolutely no impact. It's when someone else looks at your report and does a "hard inquiry" that it affects your score. Whenever you look at it, it is called a "soft inquiry" and only you can see them. Promotional inquiries also fall under the soft.

And as YuandDan mentioned, opening a new Tradeline does hurt your score, but after timely payments and keeping the utilization to about 35% or less, after 6 months the tradeline won't hurt you as much. After 2 years of timely payments and low utilization, the tradeline isn't considered "new" anymore and will greatly help your score.

Also, it's not how much credit you have that will hurt you, it's how much debt you have. Good debt is a mortgage or car loan. Bad debt are credit cards. You want to keep the utilization down low on them (35% or lower).

I have been repairing my husbands credit for the past year and half while building my own, so while I am no expert, I have been doing a lot of research on credit in the US.

also, I think if I remember correctly, Capital One is one of those companies that has been negatively reported on for not fully reporting information to CRA's which is bad for your credit history in general.

http://www.cardratings.com/blog/2007/04/ca...rting-tips.html

This has been true in the past, but by next quarter, CapOne will be reporting Credit Limit, which is what was hurting people's scores. Because you couldn't actually see how much credit someone had, there was no way to tell of the utilization.


Here's a breakdown of how FICO figures out your score:

The scoring pie is (approximately) as follows:

History category = 35%
Utilization category = 30%
Length of time you've had credit = 15%
Inquiries = 10%
Type of Accounts = 10%

I realized if would lower the score, but it was the size of the hit I found astonishing.

Somewhat scuppered my master plan which was to build my credit score up high enough for Chase to offer me a United Airlines credit card tied to my frequent flier account. Oh well will have to wait a good bit longer now.

I want this pinned!!!

I'm repairing hubby's credit too. And building my own



It's a big hit indeed. When I opened a new credit card, it didn't affect my score at all (at least the Equifax score that I constantly monitor, I don't know about the other two). When I got a car loan, my score went up one point.
But I've also seen my score decrease by 2 or 3 points for no apparent reason, so I really don't know what to think any more. My personal observation: my score increased the most when lenders upped the credit limit on my cards. Each limit increase ~ +10 points.

Too many credit cards can affect your credit score negatively. While trying to developing credit applying for multiple credit cards will also affect it negatively.