YOUR CREDIT CARD OUTLET

Credit Card & Credit Score?

I have just opened a credit card a few weeks ago (I’m only 18), and recently received an offer from the same company (capital one) for a better credit card (no annual fee, lower start apr). I want this new card. Should I open the new one before closing the “old” one. I really don’t want to keep the “old” one because it has an annual fee. What should I do to keep my credit score from going down too much? Also, I go to college and have a small loan, which I don’t have to start paying until I graduate, but have started. Since I don’t have to pay it yet, but do, is this on my credit report, and will this help if closing my old credit card lowers my score? Thanks so much for any answers, I know this question is kind of confusing.

You want to be careful of applying for too many Credit Cards at the same time, that can look bad to future lenders who are evaluating your creditworthiness.

Should you apply for the new one? If you would rather have that offer, call the company first, see if they’ll put the new offer’s terms into effect on your current card. Lower the apr, permanently waive the annual fee, add a rewards program. If not, then apply for the new card, then consolidate your old card’s credit line into the new card. You don’t want to close the old one first because the company may not give you a very high credit line on the second card.

Also, the student loan will show up on your credit report, and if you send in payments, it will show on time payments. On time payments improve your score, inquiries, opening accounts and closing accounts all decrease your score. But not by much.

The best way to show good creditworthiness is to show on time payments, good balance between debt and income, and not utilizing your entire credit line (maybe half of it at the most) on your Credit Cards. Also, not having too many open accounts at once will be good too.

Also, if the old card doesn’t charge the annual fee right away, keep it open for about 9 months, then close it. That way your credit won’t take such a big hit from doing everything at once.

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