![\"\"](\"http:\/\/66.147.244.56\/~worldwa7\/wp-content\/uploads\/2011\/05\/fico.png\" "\\"FICO\\"")
<\/a>The pie graph above shows the weight that each of the categories has on your overall score.\u00a0 For example it would be much worse to be late on a payment as it comprises 35% of your overall score than it would be to open a new line of credit which comprises 10% of your overall score.<\/p>\nThe two categories in which applying for a new card could negatively affect you are in the new credit (inquiries) and the length of credit history.\u00a0 Let’s dive into each of those categories.<\/p>\n
Length of Credit History<\/strong><\/p>\n If you are new to the world of credit you want to tiptoe around this subject.\u00a0 That is why we have suggested that you get a staple card that you plan on keeping for a long time, then wait to apply for some of the cards with big bonuses once your credit has been established.\u00a0 It can look very risky to a creditor if someone is opening a lot of lines of credit without first proving that they will actually be a faithful payer.<\/p>\n If you have had credit cards, a mortgage, car loans, and other forms of credit that have been established for a long time, then a few new accounts is not nearly going to seem as risky to the credit card companies.\u00a0 These people would easily benefit from scoring a few good deals and lowering their credit score a few points.<\/p>\n Remember that as you have the cards for a longer period of time it helps you to increase the average credit history length.\u00a0 Let’s just say that you’ve had your mortgage for 10 years, a car loan for\u00a0 years, and a credit card for 10 years then your average length of credit history is 7.67 years.<\/p>\n This category comprises 15% of your overall score.\u00a0 This is not a massive percent.\u00a0 Like I mentioned above, it is much worse to miss a payment than to open a new account or two.<\/p>\n We also remind you to keep your cards open at least for the first year.\u00a0 Most cards require an annual fee, but it is generally waived for the first year.\u00a0 I would recommend that you keep the card at least until the annual fee is due, and then cancel, or the other option is to ask for a retention bonus.\u00a0 If they give you enough points as a retention bonus, then it would be worth paying the annual fee and keeping the card an additional year to extend the average credit history.<\/p>\n New Credit<\/strong><\/p>\n This category comprises a measly 10% of your overall score.\u00a0 It has been estimated that a new credit inquiry takes 3-5 points off of your score.(This can vary depending on your score, but generally isn’t much)<\/p>\n Remember that the scores range from 300-850.\u00a0 An 850 is the highest and the 300 is horrible.\u00a0 If you have a 300 you will not be qualifying for any of these cards.\u00a0 Look elsewhere.\u00a0 You want your credit score to be ranging from 700+ to be getting approved for most of these cards.<\/p>\n Keep track of all inquires that are getting reported on your credit report.\u00a0 Most credit card companies don’t make an inquiry with all three of the reporting agencies (Equifax, Transunion, and Experian).<\/p>\n For example, I applied for the American Airlines Citi Visa card in September.\u00a0 They made an inquiry with Equifax to check my score. This means that Equifax is the only one of the three agencies that even dinged my credit.\u00a0 Transunion and Experian didn’t even have any idea until the new card started showing up as a new line of credit in my name.<\/p>\n I don’t think that there is a set number for every person as the score has so many components, but for those with good credit it is estimated that you can have up to 9 inquires with each of the credit reporting agencies every two years.\u00a0 Keep in mind that the inquires are only with each company.\u00a0 That means that you could potentially have 27 different cards without facing the negative affects of too many inquiries.\u00a0 I look at that and say, I’ll probably apply for about five cards a year.\u00a0 If I keep that pace then I’ll never get anywhere near the maximum of 27 and I’ll be closer to 10 inquires every two years.<\/p>\n A wise man once said, “O be wise, what can I say more.”\u00a0 Let’s be sure that we get you some free travel, but we want you to always be in control, and to use your credit wisely.\u00a0 So, with all that information, let’s get started.<\/p>\n We had one of our readers ask the question that many of you have asked yourselves as you’ve seen us write about using the credit cards to acquire boatloads of miles and points.\u00a0 The question was…”Doesn\u2019t applying for these cards … Continue reading <\/a><\/p>\n<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"