Credit card Q&A: “Are credit cards bad for your credit score?”

In short, no, opening a credit card won’t hurt your credit score, at least not in the long run.

Sure, you may see your credit score get dinged a few points when you apply for a credit card, but this is standard practice when you apply for any type of loan.

Be it a credit card, auto loan, mortgage, or any other type of loan. Essentially, anytime you make a request for new credit, you heighten your credit risk. Don’t confuse this with checking your own credit score, as that doesn’t involve new credit and will not hurt your credit score.

The general thinking is that those in need of credit, whether for good reasons or bad, are less financially healthy than those who don’t need new credit.

It’s a harsh rule, but obviously it’d be pretty darn complicated to make the whole process subjective. And like anythi

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A new study from credit analytics company SubscriberWise revealed that less than two tenths of one percent of the scorable population achieved the highest possible Fico score.

So just who are these consumers with 850 Fico scores anyways?

Well, the company found that the median age of these credit-elites was 61, having a birth year all the way back in 1950.

The oldest person to achieve credit score-perfection was born in 1922, while the youngest was born in 1967.

In other words, it takes a while to achieve a perfect credit score, even if you’re doing everything right.

This probably has to due with the fact that credit scoring takes into account the length of a consumer’s credit history, including the age of their oldest account on their credit report, whether it’s opened or closed.

So you really need to build your credit history early on to ensure you have excellent credit in the future.

Simply paying bills on time, keeping balances low, and applying for new credit sparingly won’t be enough for that perfection you seek.

Some gray hairs also seem to be a necessity…

For the record, the SubscriberWise study was based on data from a quarter of a million credit reports, so it seems pretty thorough.

Tip: How to raise your credit score.

If you didn’t already know, there are five main factors that determine a Fico score.

They include:

- Payment history
– Amounts owed
– Length of credit history
– New credit
– Types of credit

Now that we know what’s in a Fico score, let’s find out more about “what’s NOT in a Fico score.”

Your race, ethnicity, national origin, sex, and martial status do not affect your credit score, per the Consumer Credit Protection Act.

Your age is also not a determinant of a Fico score, though other types of credit scores may use it.

Your salary, occupation, title, and employer are included in your credit report, but do not affect your actual Fico score.

However, banks and lenders may use this information against you as part of their own underwriting decisioning.

Additionally, a Fico score does not take into account where you live, the interest rate being charged on your accounts, or any items reported as child/family support.

Rental history doesn’t affect Fico scores either, but now affects VantageScore.

Finally, certain types of credit inquiries don’t count against you, such as those initiated by you and those initiated by employers and insurance companies (will a credit check lower my score?)

And as a rule of thumb, if it’s not on your credit report, Fico doesn’t use it.

It will look like you’re attempting to obtain credit and as a result, could lower your credit score.

Get all 3 credit scores instantly for free for 30 days without worrying about a credit score ding.

All this credit stuff can get pretty complicated.

But two things you should have a handle on are credit reports and credit scores. Each are important in their own right, and both are necessary to assess your overall standing as a consumer.

While the pair certainly overlap, they are two entirely different things.

Credit Reports

A credit report contains a wealth of information about you, including basics like your name, address, social security number, and employment history.

Additionally, your credit report will list your credit history, with information on the types of accounts you’ve got open, how long they’ve been established, what their associated balances are, and if they’re current or derogatory (collections, charge-offs).

Any recent credit inquiries will also show up on a credit report so creditors can determine if you’ve been shopping around for new credit.

While all this information can be very helpful to both consumers and creditors, both parties seem to be most interested in credit scores.

Credit Scores

A credit score is simply a three-digit number between 300-850 (credit score range) for Fico scores, and slightly higher for VantageScore.

Generally, a credit report will contain three credit scores, one for each of the main credit bureaus. These c

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Having a lower credit score can lead to a plethora of financial difficulties involving every aspect of life, from personal enjoyment and life’s luxuries to the provision of bare necessities.

Many people that once had a good credit score are now victims of a struggling global economy, unable to keep up with the ever-increasing mound of debt combined with unemployment and the increasing cost of living. However, fortunately there is a way to rebuild the credit score using simple routine practices that can financially reform anyone’s credit score.

Assessing the Situation

The first step in rebuilding the credit score is obtaining a credit report from one of the major credit reporting agencies. It

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