should I get another credit card to help raise my score?

Quick question: before November, I did not have any open credit cards. I did get a secured credit card (limit of 0) and my credit score went up about 35 points and brought it to 639 range. Now, is it better to have one more card to help bring it up more (possibly an airline rewards card since I have recently started traveling more frequently) or to stay with the one card? I do have a lot of installment loans (10 from student loans that I might consolidate, if that’s wise) and one car payment that I’ve never missed a payment on.

Thanks for your help!
Quick note: I’m 25 and have had credit for awhile… my mom kind of really hurt my credit awhile back with credit cards and my first car (she neglected to tell me I still had payments left when I thought I was done paying it off and it was almost repossessed–luckily, I found out quickly and made that last payment before that happened.) So, I’m looking to re-establish my credit now… not really "start" it.

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6 Responses to “should I get another credit card to help raise my score?”

  1. Rashi Says:

    As you prepare to shape up your finances in 2010, you’ll find that improving your credit score is among the more complicated tasks.

    You may be bewildered by what helps or hurts your score, by how much and for how long. Regardless of whether you understand how it’s calculated, the number you’re tagged with can play a big hand in your financial fate.

    Banks use credit scores to help decide whether to extend loans, and if so, at what price. A lower score likely will mean higher interest rates on credit cards, student loans and mortgages. In the latter scenario, the difference could amount to hundreds of dollars a month.

    Generally speaking, a score below 620 is considered poor; 620-659 is fair; 660-749 is good, and 750-850 is excellent. It costs $15.95 to get your score at http://credit-info.we.bs/

    Here are some actions you can take, now and over time, to raise your number.

    Pay off balance

    One of the fastest ways to improve your score is to pay down your balances. How much of a lift you’ll get will depend on your overall credit profile. But paying off all balances could push someone in the 650-range into the 700-range, said Craig Watts, a spokesman for FICO, which formulates the most widely used credit scores.

    This is because the portion of your credit line that you’re using — your so-called credit utilization — is a big component of your score, accounting for about 30 percent.

    In the case of paying down your balances, note that it provides a one-time benefit. You don’t get any extra points for keeping your credit usage at a low level.

    Also keep in mind that your report could reflect a high utilization even if you pay your bills on time. This could happen if your lender reports your balance to the credit bureau before you pay your bill. To avoid this scenario, pay off charges as soon as you can — don’t wait for due dates.

    Pay on time

    Another way to have a short-term impact on your score is to make payments on time. If you’ve been chronically late in the past several months, paying all your bills on time for just one month could boost your score by as much as 20 points.

    Check for mistakes

    You’ll also want to check for any mistakes on your credit report because your score is calculated based on the information it contains. You’re entitled to one free credit report a year from each of the bureaus — Equifax, Experian and TransUnion. To get your free reports, go to http://credit-info.we.bs/ (beware of sites with similar names).

    To correct any information, contact the credit bureau and the lender that reported the error. The Federal Trade Commission provides a sample letter on http://www.ftc.gov. (Click on "Credit & Loans" under the "Quick Finder" tab, then "Credit Reports & Scoring" and scroll to the bottom.)

    Pay attention

    Once you pay down your debt, improving your score becomes a game of long-term vigilance.

    "One week’s good behavior isn’t indicative of future risk," Watts said. "To improve a poor score is a long-term project."

    The key is keeping your report free of any negative marks, which can take years to recover from. For someone with a score of 680, for example, a foreclosure can zap away as much as 105 points, while a bankruptcy can shave off 150 points. A single late payment of 30 days or more can drop your score by 80 points.

    Just how steeply your score falls depends on factors such as how much you owe and how late you are. But repeat offenses aren’t as damaging as the initial infraction, since your riskiness is already reflected by a lower score. So a second or third late payment shouldn’t hammer you as much as the first.

    The negative marks, including late payments, stay on your credit report for seven years. Chapter 7 bankruptcies, which wipe clean all unsecured debt such as credit-card bills, remain for 10 years. And the repercussions recede only over time, assuming you stay current on all your payments.

    Too much, too little

    Applications for new credit ding your score, too, although to a far lesser degree — usually around five points

    Finally, think twice before closing any accounts. The length of your credit history counts for about 15 percent of your score, so it’s a good idea to hold onto any cards you’ve had for a long time. Those older cards, coupled with a steady history of prompt payments, should provide a good path to an improved score.

    "The people who have really high scores are the least interesting," Watts said. "They have few accounts and always keep low balances. For a risk manager, these people are the ones who are as reliable as a Swiss watch."

  2. sar Says:

    yea you can get one more

  3. Life Is Better After Retirement Says:

    You have a good mix of accounts already, I will advise to stay where you are for now.
    You don’t want to open too much in a short time, that will hurt your score.
    Wait a year and see where you are.

  4. Paul Says:

    Wait six months and make sure to keep your current cards paid on time, then you can open another to establish more credit history.

  5. Blah Says:

    Just add to the limit you have on that secured card just put any extra money you get every month a put it in the Collateral Account

    this will increase your credit limit and score

    as opening a new account will drop it 15 points

  6. StephenWeinstein Says:

    The best way to raise your score is to pay off the loans.

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