@Joe wrote:Hello,
I've been paying off my credit card debt, which has lowered my credit Utilization.
Does it help if I have been approved for an additional card as far as lowering my overall credit Utilization?
Thank You.
It helps your fico score insofar that your overall credit utilization goes down across all cards
But you still owe however much you owe, and creditors still can see that amount, regardless of however much credit you have access to
Meaning - if you owe 50k and report 50k in income, that's still really bad even if you have 500k in available credit (10%)
Yes, padding your utilization with a new card will help, especially if you qualify for a limit that makes a significant dent in your utilization percentage.
You don't want to go crazy and get several new cards in a short time, especially if they have relatively low limits, or you will get dinged on other score factors, and it can hold you back from getting some really desirable cards for a couple of years.
Ask me how I found out.🤣
@Joe wrote:Hello,
I've been paying off my credit card debt, which has lowered my credit Utilization.
Does it help if I have been approved for an additional card as far as lowering my overall credit Utilization?
Thank You.
Yes. When it reports it will lower your utilization.
@Joe wrote:Hello,
I've been paying off my credit card debt, which has lowered my credit Utilization.
Does it help if I have been approved for an additional card as far as lowering my overall credit Utilization?
Thank You.
Summary from what has been mentioned above:
- Adding another card will lower your utilization and can help your FICO scoring
- Adding another card will lower your AAoA, AoYA, and increase your hard inquiries, which can hurt your FICO scoring
What this means for your scores in the short term is they may stay flat, or possibly even go down a bit, but a year from now, assuming you keep your utilization low, a new card will help.
