Fast Fact: Credit Inquiries. Your FICO score won’t drop by much when you apply for new credit. But if you apply for several new credit cards over a short period, your credit report will reflect the activity.
American households with credit card balances carry an average debt of $16,425.¹
The wise use of credit is a critical skill in today’s world. Used unwisely, credit can rapidly turn from a useful tool to a crippling burden. There are a number of warning signs that you may be approaching credit problems:
- Have you used one credit card to pay off another?
- Have you used credit card advances to pay bills?
- Do you regularly use a charge card because you are short on cash?
- Do you charge items you might not buy if you were paying cash?
- Do you need to use your credit cards to buy groceries?
- Are you reluctant to open monthly statements from creditors?
- Do you regularly charge more each month than you pay off?
- Do you write checks today on funds to be deposited tomorrow?
- Do you apply for new credit cards so you can increase borrowing?
- Are you receiving late and over-limit credit card charges?
It is important to recognize the warning signs of potential credit problems. The quicker corrective action is taken the better. Procrastinating is almost a sure way to guarantee that you may face financial difficulty down the road.
- Nerdwallet.com, 2017