Quote:
Originally Posted by Mirana
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I've read somewhere that applying for credit cards can lower your credit score. I have no evidence to support this, I've just seen it multiple times. Something to think about.
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Not necessarily. There are a bunch of factors that can impact your score. Your credit to debt ratio can influence your credit score. So if he has this card and never used it, but just keeps it open then the credit bureaus see this as a good thing; he will have credit available to him, but no debt incurred, which would eventually raise his score.
However the average age of your accounts also plays a role in your overall credit score. So by opening a new account which is 1 day old, this will lower the average age of the total, which can then lower your score. This is why if you open accounts, it is recommended to leave them open with a $0 balance, so they grow old and eventually raise your score. Opening and then closing an account will usually have a negative impact on your credit score, because that account will bring down the average age of your remaining accounts.