It depends.
Some people say that credit cards help your FICO score, while others caution against getting any credit that isn’t absolutely essential to your financial existence. Both of these answers are overly simplistic, and may in fact be right or wrong...under certain sets of circumstances.
The question of a credit card's effect on FICO defies any single, universal answer. Because of the intricacies of FICO scoring, two different people with different credit histories could get two different and equally valid (for them) answers. Even for the same person, the answer may change over time, and depend on whether the individual takes a short-term or long-term view. Over the long run, the way you manage your credit card greatly affects how it influences your FICO score...maxing your credit card out or being late on payments will drop your FICO score, possibly substantially.
Since I am not a financial advisor, I can’t tell you if getting a credit card is a good idea or not. However, I can tell you, step-by-step, how your FICO score will react when you get a credit card...and customize my answer to your personal credit history. Before we continue, you should get a good picture of your own credit situation. Knowing your credit report is necessary, as your credit score and report are the primary factors credit card companies take into account when evaluating your application for credit. Your FICO score will also react differently to a new line of revolving credit if you have a long-established credit history versus if you just got your first credit card last year.
Click on the banner below to be taken to FICO’s homepage...there you can order your credit report and FICO score. When you are done with that, click to go to the next screen. There you can view a step-by-step timeline analyzing how getting a new credit card affects your FICO score.
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