credit-ratingMany people are asking themselves, what’s a good credit score and how can I make mine better? Have you considered opening up new credit lines in order to manage your debt load and leverage your monthly payments to make things easier? The idea is to keep the amount of debt payments the same each month but spread them over several existing credit lines. This strategy can keep your monthly payments easy to manage and help you avoid missing any payments.

One tactic that works well is to transfer balances to new credit lines that have significantly lower rates than your loaded accounts. While this can provide immediate help, it is only temporary and you should know that making this move will result in inquiries made on your credit report. Your credit score may be affected.

What Is An Inquiry?
An inquiry is simply the recording of the data made each time you submit an application for credit. The lender whom you are applying to have credit with pulls your current report and thus is recorded as an inquiry.

good-credit-score-chartBe careful not to open up too many new credit lines. While having one additional inquiry from a new credit application may not affect your credit score, or at the least may only deduct five to six points, opening up several new accounts may be more hazardous for people that do not have an established credit history. This is especially true if you open up these new accounts in a short period of time. Then the next time someone asks you: What is a good credit score, you can simply show them this effective tip to increase their score and improve their credit history especially when trying to buy a home.

Too Many Inquiries Can Lower Your Score
You definitely want to avoid having too many inquiries on your credit report. Multiple credit requests can produce a higher risk factor in the eyes of lenders. This is particularly true if your credit history has just recently been opened or you have very few open accounts showing activity.

For example, if you look at the credit industry statistics, inquiries on a credit report that range in the number of six or more means that you are approximately 8 times more likely to file for bankruptcy compared to having zero inquiries on your credit report or owning a business.

How Can You Improve Your Credit Report If Trying To Improve May Hurt You?
While it may seem unfair that opening up new accounts can get you started with improving your credit and better manage your monthly payments, it can also hurt your report due to these inquiries. But there is indeed help. It is called rate shopping.

Introducing Rate Shopping
There is a time when people who are shopping around for the best loan on a new car or house may cause several lenders to request their credit report, thus causing multiple inquiries, even though that are actually only searching for one loan.

The powers-that-be at the credit boroughs understand when this happens and therefore will count all of the home or auto inquiries within a 14 day period as only 1 inquiry. To add to this, the score also ignores all auto and mortgage inquiries that were made in the previous 30 days before scoring.

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