Effect of credit card applications on credit scores

We recently started another mortgage refinance with Bank of America.  As soon as they pulled our credit reports I asked them what the scores were.  By the way, my understanding is that when a financial institution (or perhaps anyone else, such as an employer?) pulls your credit report, they must reveal the scores to you if you ask. Must they also give you a copy of the credit report?  Don’t know.  I always ask mortgage lenders to give me my (and my wife’s) scores, although I’ve never asked credit card companies for this.

This time the scores were right around 800 from all three agencies.  The last time we refinanced about 18 months ago, our scores were (slightly) lower.  Since then we applied for a handful of credit cards.  Needless to say, all the bills are paid on time and we’ve never had any defaults, bankruptcies or any similar unpleasant events.

I was happy to experience first-hand the theory that if you already have high credit scores, getting new credit and not using it actually increases your credit-worthiness.  The reason is that the lower fraction of your total credit you actually use, the less likely you are to go into default on any new credit line.  In other words, banks like to give credit to people who don’t really need any more credit.

Your high credit scores are an asset that is worth a lot of money.  Use it wisely, but don’t let it sit idly, make it work for you.  Most people understand that they extract value from high credit scores via lower loan rates.  But credit card signup bonuses are another perfectly good way to extract value from your hard-earned high credit scores.


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