Is it true that opening store credit cards lowers your credit score?
I read somewhere that when you open store credit cards, you get 20 points taken off your credit score. Is this true? What constitues a “store credit card?” Are they things like the Macy’s card, which you can only use at Macy’s? Or ones that are affiliated with a store but you can use at other places as well (i.e. Target Visa Card)?
Opening one card at a store that you shop at frequently will not lower your score. In fact using and paying off that card will help you build credit.
Opening a card at 20 diffrent stores just to get that 10% first purchase discount and then never using the card again will hurt your credit score. Even if you cancel the card once you get it, the more open accounts that you have the worse it looks. And the more un-used accounts you have that are open makes your score go WAY down.
If you need to build credit the best way of doing that, other than buying a car, is to open a few accounts that you will always use and pay off. It will lower your score to begin with, but it will build back up very fast, and actually improve.
Go with a low limit Visa card ($500 or so), get a gas card (Shell, Chevron, Valero, etc… and use that to buy gas), a cell phone in your name is also a good way to go. But you don’t really want to go over three or four active accounts, anything over that shows you as a credit risk, and will effect your score.
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