|
Limit the number of new accounts and inquiries An excessive number of new accounts (accounts opened within the last year) or inquiries may indicate that a consumer is desperate for credit, which usually means a credit problem. Too many new accounts can weigh against your credit score.
Numerous inquiries may be considered a threat to a lender because they may indicate that a consumer is attempting to acquire multiple lines of credit at the same time, which could lead to the consumer being overextended and at risk of defaulting on their obligations.
In accordance with the Fair Credit Reporting Act, inquiries can remain on a consumer's credit for a maximum of two years. Numerous inquiries may be reflective of a consumer who is subject to excessive impulse buying desires or a consumer that is dependent on additional credit to get out of a financial crisis.
Accounts that have been established for a long time with a good credit history and reasonable use of available credit can stabilize and improve a credit score. However, accounts that are less than a year old and do not have a mature history may weigh against the score because the consumer's ability to maintain long term stability with their increased spending power has not been established. Derogatory information that is reported on a consumer that has a mature history may not weigh against the credit score as much as derogatory information that is reported on a consumer whose credit history is not mature.
|
