Too Many Credit Inquires? How I Improved My Credit Score with New Credit

I use a credit monitoring service and nothing seems to slip by them. Case in point, I got an email regarding a potential change in my credit score. Well, it turns out that it was a new hard inquiry credit report; the terrible idea that I applied for more credit. This action allow set off a red flag. It is like my over protective mother is watching my credit report.

While this is nice too know that someone is watching I began to think is this new application enough to lower my credit score? Is the act of applying for me credit in this era of financial uncertainty enough to cause the credit bureau to drop my score with no regard? The answer is no. I just checked my credit and it actually went up since the last time I checked.

The fact is this credit inquiry was for a new line of credit that I used to move money from a credit card that was charging an obscene rate of interest. I fell victim to offer in the mail. Zero percent for a year and half? Are you kidding me? How can I pass that up. I don’t have much debt but really zero percent for a year and half is a great offer. How could I pass it up.

I knew that applying for this new line of credit would be a new hard inquiry on my credit report, but I was looking at the bigger picture. I keep low lines of credit on purpose, to discourage me from spending large amount and to keep the balance low enough that I can pay it off in a month of two. When I applied I let them decide my limit and bam, I have a credit line more than enough to cover my balance transfer. After transferring the money, I lowered the debt to credit ratio on the first card thus improving my overall credit standing.

I knew the fact that credit inquires don’t play as large of a role as my debt to credit ratio. This action improve the more important factor my level of debt and I saw a return of a better credit score.

When to avoid credit inquires

While my story is positive, this is not the case for everyone. I have good credit and I actively maintain and watch my credit report and score. And because I understand things like the FICO score formula, I used a method like this to improve my score.

But there is another side to this. I have very few hard inquires. Actually I can’t even remember the last time I applied for new credit. I don’t apply for store credit cards like sears and target. I usually avoid everything that is mailed to me. I apply for credit as I need and that is it.

If you go around applying to every offer out there you will suffer the consequence of too many hard inquires and your credit score will pay the price. You need to apply for credit as you need. If you use methods like the one above to get out of debt you need to careful. If I make one late payment to this credit card, I am sure they will show me no mercy and my rate will sky rocket. You must pay on time and never miss.

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