 Dear
Dr. Don,
I had a Visa student credit card with Bank of
America. Two months before the card's expiration
date, the bank sent a new card without asking
me first. A week later, I applied for an American
Express Clear card and qualified for it. I also
called Bank of America to ask for an increase
in my line of credit, which they approved. Will
these actions hurt or bring down my credit score
in any way?
How often can I apply for credit cards in a given year without damaging my credit score?
How often can I ask for an increase in my line of credit in a given year without damaging my credit score?
Is it a good idea to apply for another card? Will it hurt my credit score?
-- Michael Magnate
 Dear
Michael,
Credit cards have expiration dates, but the account relationship does not. Credit card companies always send you a new card prior to the expiration of the old one. Asking for an increase on the credit line can help and hurt your credit score. The credit review process that occurs prior to an increase in your credit line may cause a dip in your score. However, the increased credit line also helps your credit score by increasing the ratio of credit used to credit available. Here's a chart from the myFICO.com Web site showing the factors that go into your credit score.
Every time you apply for credit, the loan application generates a credit inquiry on your credit report. Called a hard inquiry, it stays on your credit report for two years but only impacts your credit score for the first year. Your credit score is based on the information in your credit report.
You can get one free credit report
every 12 months from the consumer reporting agencies.
However, you have to pay for your credit score.
Bankrate has partnered with myFICO to provide
a free FICO
Score Estimator and its feature, "How
to get your free credit report," will
help you get your credit reports.
Between requesting an increase in
the line of credit on your Visa card and opening
a new American Express card account, I think you've applied
for enough credit at the moment. Take a breath.
Work on staying current on your credit card with
timely payments and keep balances low to nonexistent.
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