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Why opening new credit cards can help your score

By Philip Tirone

Often, people with bad credit think they should wipe their hands clean of credit. They figure that if all those credit cards got them into trouble in the first place, they should cut them up and become cash-only citizens.

Unfortunately, this gut reaction is the worst thing you can do for your credit score.

Why?

Because it continues to suppress your credit score. In fact, if you have bad credit, you should open three new revolving credit cards immediately. See http://www.720creditscore.com/help/credit-cards/ for recommendations on the best credit cards for people with bad credit, fair credit, or great credit.

Here is some background information on why this is so important …

The credit-scoring bureaus place more emphasis on recent behavior than on past behavior. This means that if you have suffered from some sort of financial meltdown that caused your credit score to drop, your credit score will be bad in the months after the financial problems, but it will start to increase as the negative marks begin fading into the past.

But, this assumes that you have given the credit bureaus new and improved information about your payment and spending habits.

Think of it like this: Rewind to your years in high school and imagine that you failed a test when you were a sophomore. When you failed the test, your parents and your teacher were probably disappointed in your effort and test score.

Now imagine that for the rest of your sophomore year, as well as your entire junior year, you had great test scores. By the time your senior year rolls around, your parents might not have forgotten about your failed test entirely, but they probably are not too concerned about that “F” that you received two years prior.

The same goes with credit. If you take the right steps, all of those “F” marks will not matter in 12 to 24 months—after all, you will have a new and improved history of earning “A” after “A.”

This is why you need to have and use credit if you want to have a good credit score.

Establishing new lines credit is an important part of rebuilding your credit score.

Particularly, you need three new revolving credit cards. One of the fastest ways to rebuild your credit score to a 720 is to have at least three active, major revolving credit cards, meaning Visa, MasterCard, American Express, or Discover.

See http://www.720creditscore.com/help/credit-cards/ for recommendations on the best credit cards for people with bad credit, fair credit, or great credit.

Unfortunately, it can be hard to qualify for credit cards if your credit score is low. And beyond that, according to a Federal Reserve Board Study, 46% of credit cards will hurt your credit score. About half of the credit cards that people carry in their wallets do not report to all three credit bureaus, or they do not report the proper credit limit, which causes your score to drop.

To help our clients and readers improve their scores the fastest, we have identified the best credit cards that do report the proper credit limit to all three credit bureaus.

Once again, you can find a link to these different types of credit cards by going to See http://www.720creditscore.com/help/credit-cards/.

Lastly, keep this in mind: Every time you apply for credit, your score might drop a little. But after about six months of timely payments on these new credit cards, your score will show significant improvements. And six months later, you might have a great credit score, which will allow you to renegotiate your car loan, home loan, and credit card terms, which could save you hundreds of dollars each and every month!