There are a seemingly infinite number of credit card offers on the market, with each offering a unique set of benefits and drawbacks. For some, it may be tempting to apply for every new card with the hopes of realizing discounts, sign up bonuses, or promotional interest rates. Others are skeptical of these opportunities, as they are duly concerned about the effect of new credit card applications on their credit score.

How A New Credit Card Application Impacts People’s Credit Scores

When someone applies for a credit card, the first thing that happens is that the bank makes an inquiry to one of the credit bureaus. This process retrieves the applicant’s credit history while adding a record of a new application for credit. By itself, a single additional inquiry is insignificant, yet multiple applications for new credit within a short period can have a negative impact on one’s credit score. New applications only impact the ten percent of the score that relates to recent inquiries.  Therefore, the effect is minor and is only apparent in the short term, often as little as 90 days. Many people with credit card debt avoid taking advantage of 0% APR credit card offers due to credit score fears, but for people with high interest debt, the question should be how much are a few credit score points worth. (more…)

When most people are surprised by their credit reports, it usually an unpleasant surprise.  I once found that one of my credit scores was 50 points lower than my other two.  The reason:  an insurance billing error I disputed five times was never removed from one credit report.

 We get emails all the time from people who can’t understand why they weren’t approved for a credit card.  The problem is often a credit report error.  One recent visitor who was denied for a credit card who insisted he had excellent credit wrote us back to say that one of his credit reports was filled with incorrect information.  At first he thought he had been a victim of identity fraud.  After a few calls to the credit bureau, he found out they had mixed information from someone with the same name with his information. 
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 This is not an uncommon situation.  So, today’s poll is in two parts.  After you vote, please feel free to post a comment.  Any information you can share can prove helpful to other readers.