Why do credit sites recommend I get another credit card?

I’ve worked hard to get my credit score into the excellent range using only one credit card. I pay monthly before the due date. Why do credit sites like Credit Karma and Credit Sesame keep suggesting I get another credit card to improve my score even more? What is the impact on a credit score when applying for a new card?

Submitted by Rick D.

Congratulations! You have very positive habits around your credit and debt management. I’m impressed that you pay your bills on time, and many times ahead of the due date. Plus, you only have one credit card and you pay it off every month.

You have maintained excellent credit history (35% of the credit score) and a low credit card utilization rate* (30% of your credit score). Clearly this is sufficient to maintain a high credit score. Length of credit makes up another 15% of your score. Plus, types of credit and inquiries represent 10% of the score each. If you apply for credit, it’s possible that your credit score may dip if you have too many inquiries in the last two years. (Two years is the most inquiries can stay on your credit report by law.)

Don’t feel pressured to apply for credit if you don’t need it. Most lenders advertise to get more loans out to build their loan portfolios. They often use sites like Credit Karma, Credit Sesame, and others to market their loan products. When I was a loan manager at a credit union, my job was to find platforms to sell our loan products. However, it appears your credit and debt are under control. As you indicated, you work hard to maintain that control. So I advise you to continue practicing positive financial behavior and habits!

*Credit utilization rate is the amount of money you owe divided by your total credit limit for those credit cards. Example: You owe $30 and you have a $100 credit limit. That equals a 30% utilization rate.


Recommended Articles

Are there debt consolidation companies for poor credit scores?

Submitted by Sara K. A Debt Management Plan (DMP) that is offered by a non-profit credit counseling agency can be an excellent tool for getting out of debt. Anyone can use these plans, whether they have poor credit or great credit. Credit cards, collections, and medical debt are eligible for these programs. How a Debt… Read more

How can I fix my credit to buy a house for the first time?

My husband and I want to buy a house for first-time buyers. How can we fix our credit? Submitted by Ferlenzia M. Owning a home is a dream that many people have. To make that dream a reality, most people get a mortgage loan. To qualify for that type of loan, you need steady income,… Read more

How do I find my credit score?

How do I find out my credit score? Who wants to know it, and what factors influence its change? Submitted by anonymous. A credit score is a representation of how someone managed their debts. It is meant to help creditors understand our financial responsibility. Payments on our loans and balances on our credit cards are… Read more