We continue to discuss the five factors that impact your credit score. This week, the discussion is about new credit.
New credit determines 10% of your credit score
Research shows that opening several new credit accounts in a short period of time represents greater risk – especially for people who don’t have a long credit history.
It’s okay to request and check your own credit report
Your credit scores will not be affected as long as you order your report directly from the credit reporting agency or through an organization authorized to provide credit reports to consumers, such as myFICO.
Don’t open new accounts too rapidly
If you have been managing credit for a short time, don’t open a lot of new accounts too rapidly. New accounts will lower your average account age, which will have a larger effect on your credit scores if you don’t have a lot of other credit information. Even if you have used credit for a longtime, opening a new account can still lower your scores.
Bill Holmes is President of Ann Arbor Mortgage Companies, a full-service mortgage banker that was established in 1996. With a staff of eight and over 113 years of combined experience, Ann Arbor Mortgage Companies has closed over 5,000 mortgages worth an access of $800,000,000.