New Credit Lowers Your Credit Score

One of the things that is included in your credit rating is the length of your credit history. The longer you’ve had credit, the better your score is as long as you’ve kept up with your payments. When you take out a new loan, or get a new credit card it reduces your credit history.

Even if you’ve had one credit card for 10 years, your credit history will be reduced if you get another one. The amounts of time that you’ve had each credit card will be added together and the average will be your new history. Instead of a 10 year credit history, you may end up only have a few years of history.

If you’re planning on buying a new car or home, try to avoid getting any other loans or credit until after you’ve finalized the loan. Of course, even those types of loans will reflect on your credit history. But, if you’re credit history is going to keep you from getting a loan, it would be better to be turned down for a credit card than a home.

Keeping your credit score as high as possible can also get you lower interest  rates on a home or a vehicle. And, the lower the interest, the lower your payments will be. You’ll be glad that you waited to apply for that extra credit card when you see just how much you can save.