To Open or Not to Open: That is the Credit Question
It isn’t uncommon for credit card companies to recommend you to open new lines of credit in order to increase your credit score. This will indeed give you more opportunities to raise your score, but then you have to deal with a hit to your credit ratings that comes from the mere fact that you actually opened a new line of credit.
Confused? Think of it this way: opening new lines of credit will make lenders jittery about you as you have the potential to blow away more of their money. This is why your credit score will drop in the short-term.
On the other hand, responsibly making use of that expanded line of credit will let lenders know that you’re responsible enough to handle more money your way – ergo making you eligible for better interest rates.
There is, however, a more effective method of raising your score without having to take the short-term hit of opening new lines: improve your utilization ratio.
You can do this by having the card issuers raise your credit limit, paying down existing debt or a mix of both. This method is even safer than opening new lines of credit, especially when mixed with extra credit card charges that have been paid on time.