Approximately 10% of your FICO score is based on this category.
People tend to have more credit today and to shop for credit — via the internet
and other channels — more frequently than ever.
FICO scores reflect this reality.
However, a research show that opening several credit accounts in a short period
of time does represent greater risk — especially for people who do not have a long
established credit history.
Multiple credit requests also represent greater credit risk. However, FICO
scores do a good job of distinguishing between a search for many new credit accounts
and rate shopping for the best mortgage or auto loan. Your
FICO score takes
into account:
How many new accounts you have.
Your FICO score looks at how many new accounts you have by type of account (for
example, how many newly opened credit cards you have). It also may look at
how many of your accounts are new accounts.
How long it has been since you opened a new account.
Your FICO score
may consider this information for specific types of accounts.
How many recent requests for credit you have made, as indicated by inquiries
to the credit reporting agencies.
Inquiries remain on your
credit report for two years, although FICO scores only
consider inquiries from the last 12 months. FICO scores have been carefully
designed to count only those inquiries that truly impact credit risk.
Length of time since credit report inquiries were made by lenders.
Whether you have a good recent credit history, following past payment problems.
Re-establishing credit and making payments on time after a period of late payment
behavior will help to raise a
FICO score over time.
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CREDIT TIPS
Do your rate shopping for a given auto or mortgage loan within a short
period of time.
FICO scores
distinguish between a search for a single loan and a search for many
new credit lines, in part by the length of time over which inquiries occur.
Be careful about opening new accounts that you don’t need.
Opening new accounts can lower your FICO score in the short term. Beware of
discounts or low interest rates being offered to entice you to open a new charge
account that you don’t need.
Re-establish your credit history if you have had problems.
Opening new accounts responsibly and paying them off on time will raise your FICO
score in the long term.
Note that it’s OK to request and check your own
credit report and your
own FICO score.
This won’t affect your
FICO score, as long as you order your
credit report directly
from the credit reporting agency or through an organization authorized to provide
credit reports to consumers. |