Every time you open a new credit card or apply for a loan, your score drops a few points when a check is made on your credit. This is inevitable and something you should be aware of anytime you apply for new lines of credit. If you are constantly applying for new cards, this may also show potential lenders that you rely too much on credit and may not be a reliable borrower.
One of the major aspects of your overall credit score is making on time payments. In addition to your credit score dropping, you may end up paying more in interest to make up for the late/missed payments. To avoid this, set up automatic payments or other reminders so you’ll always make your payments on time.
While there’s no rules that say how much credit you can use at one time, more experts recommend staying under 30% to keep your credit score high. This means, if you have $10,000 in credit available, you are not using more than $3000 worth of credit at any given time. If you are continually going over this number, but still make on time payments in full, you may want to look into increasing your credit.
The length of your credit history also plays a role in your credit score. If you close your oldest card because you don’t use it anymore, this may shorten your length of history and lower your score. You will need at least six months with some type of credit in order to receive a score.