The Help Desk

Your tough questions. MONEY's smart answers.
Presented by

Will a new credit card hurt my credit score?

July 12, 2012: 5:30 AM ET

My credit score is 770. I have two credit cards and always pay them on time and don't spend more than 10% of my total credit limit. I'd like to open an additional credit card that offers points for gas and other cash back promotions. Will that hurt my credit score? — Name withheld

First off, congratulations on your 770. One of the reasons your score is so good is the fact that you keep your credit card balances to such a low percentage of your credit limits, explains John Ulzheimer, president of consumer education for  That percentage, often called the debt utilization ratio, is an important component of your FICO credit score. The lower the percentage the better, explains Ulzheimer.

Opening a new credit card is perfectly fine. In fact, it will make it easier to keep that overall debt usage percentage low because you'll have a larger amount of unused credit limit thanks to the new card. It's true that inquiries for new credit can impact your credit score, but Ulzheimer says because this is only one card, that's not a problem in your case. It will only show up on one of your three credit reports and inquiries are only worth 10% of your score. Inquiries remain on credit reports for 24 months but are only considered by the FICO scoring model for the first 12 months, he explains.

— Walecia Konrad

Got a question for the Help Desk? Send it to

Posted in: Credit
Join the Conversation
Help Desk

Got a question about your money? We want to hear it! Each week we're answering your questions on CNN, Headline News and

Your email or phone number won't be published; we'll use it to get in touch if we need more information about your question.
Help Desk Video
  • NEXT
    Not enough money in America's 401(k)s
    Despite the surging stock market bringing balances to record highs, the average Fidelity 401(k) account has less than $100,000 in it. That's just not enough. Play
  • NEXT
    Explaining Obama's myRA
    President Obama unveiled a new savings plan for retirement accounts, aimed at encouraging people to start building their nest egg. But how exactly does it work? Play
  • NEXT
    Tricks on how to save in your 20s
    Saving for your retirement in your 20s doesn't have to be a financial burden. Prioritizing your expenses is usually the first step in building a nest egg. Play
  • BACK
    Don't get fooled by Black Friday sales
    Here are some of the tricks that retailers use to make you think you're getting a deal. Keep an eye out for them while shopping this Black Friday. Play
Best Tips
Some of the nation's leading business owners, investors, and thinkers share their thoughts on rebuilding your wealth. More
These strategies can help you manage the challenges -- both emotional and financial -- of helping an aging parent from afar. More
You don't need to be fanatical to get to 780. Those in the know say these moves matter most. More
Featured Newsletters

Tips for saving and spending smarter.

Search This Column
View all entries from this: Week, Month
Help Desk
More help for your career, your investments and your budget.
Powered by VIP.