Originally Posted by
MDtR-Chicago
It's not really a mystery how credit cards affect a credit score.
Start here:
What's in your FICO score
You will see that there are items positively and negatively affected by applications.
Primarily, the negative effects are in the 10% allocated to "New Credit", including number of inquiries, recently opened accounts, etc.
As others have noted, there can also be positive effects. A major component of the score is "proportion of credit lines used" - i.e. balances vs. total credit extended. As you open more cards, you have more available credit, so your utilization of credit goes down.
Overall, though, none of this really matters, unless you need a mortgage or maybe car loan or rental application in the next few years. If no one will be looking at your score, why does it matter?
Good points. Although I have to wonder how much of a plus is it to have more credit, and how much of a minus to open up lots of cards. ie, after doing some more digging, I read that your credit score will go down 2-5 points for every hard credit inquiry. Also, I am reading that you should apply to 4-5 cards every 90 days. Does this mean that if I follow this schedule, I will lose a minimum of 40 points off my FICO each year, notwithstanding the gain from having more credit?
Also, does earning tons of frequent flyer miles translate into elite statuses? For example, on Continental Airlines, I know that if I fly a lot I'll get into their EliteAccess program. Will earning FF miles achieve the same?