Do credit cards hurt your credit score?

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fordellcastle
 
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Do credit cards hurt your credit score?

Postby fordellcastle » Sun Apr 29, 2012 7:12 pm

I finally broke down and applied for one credit card to be used only in emergencies (car breakdowns far from home being a big reason). I have a $0 balance, have had a Paypal Platinum Mastercard for only 2 months. My score went from 805 down to 686! I have no outstanding loans, my house is paid off. Will it go back up if I cancel it? I am an old(er) lady.


cl_steele
 
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Postby cl_steele » Mon Apr 30, 2012 12:58 pm

being new to the world of credit i cant speak with any real authority but from me experience with them i believe the reason it may have gone down is because you now have an open line of credit, it should revert back to its original if you cancel your card or start using your card and thus prove that you are trust worthy with credit.

have you done anything else that could have given your credit rating such a bump though as i've not heard of just one card with a 0 balance giving someones rating such a kicking before?

JCarter
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Postby JCarter » Mon Apr 30, 2012 10:21 pm

fordellcastle wrote:I finally broke down and applied for one credit card to be used only in emergencies (car breakdowns far from home being a big reason). I have a $0 balance, have had a Paypal Platinum Mastercard for only 2 months. My score went from 805 down to 686! I have no outstanding loans, my house is paid off. Will it go back up if I cancel it? I am an old(er) lady.


How many other cards do you have? Have you pulled your report to see what else could have affected the score?

ps2cho
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Postby ps2cho » Tue May 01, 2012 1:33 am

Sounds to me like you have basically no recent tradelines other than your paid mortgage. With a report with such a small length of history with minimal tradelines, your score will move significantly with small changes.

Keep the card open going forward. As long as it has no annual fee, there is no reason not to have it. Make sure you use it though, even if its only one purchase a month otherwise it reports to the bureaus as no payments made on a $0 balance aka not using it aka its doing nothing for your score. Just make a purchase, then pay it off right away and be done.

MemberSince99
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Postby MemberSince99 » Tue May 22, 2012 9:34 pm

In fact you might want to get a couple of cards and just give them time and proper use. Since you had 805 you obviously know how to pay your bills, so just do that religiously with your card(s) and your score will come back. Ideally FICO likes to see a couple of major cards. I suggest getting them around the same time so they can age together and the inqs will fall off together too.

Something to consider is a charge from Amex. You could possibly get a Zync now, use it for a year, then apply for a revolver from them and it would backdate giving you a year free AAoA.

Not really necessary just a thought for you.



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