Does credit card jumping hurt your score?

Answer 1

Since 1986 No Money Down programs have counciled developing credit by withdrawing funds from one credit card & using it to pay another. The larger the ammount the better. It shows up under "alltime high" on the credit report. Withdraw $ from 1st CC , withdraw $ from 2nd CC & pay off 1st - withdraw $ from 3rd CC & pay 2nd. Keep going until you have as many CC as you want. I had 24 at one point in 1997. My credit report was spotless and I withdrew 160K out of the 24 cards all at once and bought my house

While this tactic may have worked for one individual, in general it is a practice to avoid.

Anytime a consumer applies for credit, the lender will do an inquiry into their credit history. This generally causes a deduction to the score. Controlling and limiting inquiries is part of the strategy to improve credit scores. Since your credit score is, in the most basic sense, a history of how you have managed debt, new accounts also cause deductions to the score. New accounts have no history yet.

These deductions drop off sharply after 6 months and your score begins to receive additions based on how you are paying the account. So, any account held for less than 6 months is damaging to the score and is too "young" to confer benefits.

There is also a target range of the number of revolving accounts that maximum points. The range is two to four and includes both credit cards and other types of revolving accounts (like Home Equity Lines of Credit). Credit card jumping causes crazy variations in this section of the scoring software also, especially if the consumer is not attentive about having the accounts notated as "closed by consumer". Still another important component to increasing scores is the way revolving accounts are used. The industry term is "utilization". This describes the percentage of the balance in relation to the credit limit on any card.

Hopefully, you begin to see the complexity credit scoring programs and how difficult it is for an uninformed consumer to make the right choices. Educate yourself and use credit very carefully!