The Benefits of Managing Credit Well

It was about three years ago that I bought my present home. I was able to get a fantastic interest rate since my Fico score was well above an 800. I also wanted a Bloomingdales card but because of my knowledge of scores I waited until after I was approved for the loan. Once I had been approved for the loan I applied for the Bloomingdales card and my score, between the new credit and mortgage account, dropped from the 840’s to a 760 remaining under an 800 for two years. Besides the opening of new credit affecting me the fact that these two new accounts had reduced the average age of my credit also played into the score reduction. Throughout the next two years I had many opportunities to save money on purchases by opening new credit cards, especially around the Holidays, but I did not. The risk of reducing my credit score, possibly hurting my opportunities in the future, made it clear that I would not open any new credit for at least 5-6 years unless out of necessity. As the economy changed and I watched many successful business owners and consumers struggling to get loans I decided it would be best to take a line of credit to protect my business just in case. With restrictions tighter for loan approval it was much more difficult for banks to approve business lines. Since my score was a 785 when I applied, my Dun and Bradstreet credit was superb, and I knew the banker for a very long time I had no problem getting the line. If my scores had been lower, even by 40 points, it would have made a huge difference and I probably would not have the line today. One credit card being opened at the wrong time could have damaged my ability to protect the most important asset I have.

For more information on credit restoration, view North Shore Advisory’s website



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