Q: I've been approved for a new credit card with Citibank. Will accepting a new card help or hurt my score?
Your credit score is made up of multiple components, all of which may determine the new card's effect. Chief among these is payment history, which comprises about one-third of your score. How much of your credit you use in comparison to what is available to you--utilization--is another big factor. Additionally, your credit score is based upon the types of credit you use and the number of credit inquiries made. Because your Citibank card is brand new, your score may take a hit of a few points until you establish payment history and utilization.
To insure your credit score is maximized, the best thing you can do for yourself is get a copy of your credit report to clean up any errors that may exist. You are entitled to a free report each year from each of the three credit bureaus. However, you can only get that report from one source annually for free without any strings attached--annualcreditreport.com. I recommend you print the report because once you leave that site, you cannot retrieve the report free of charge again for another 12 months.
The other thing you should do for yourself to insure an excellent credit score is make on-time payments every month on the new card as well as any other debt you have. Any late payment is like pouring a bucket of cold water on your your credit score. On the other hand, on time payments--especially of secured debts such as a car loan or secured credit card--are like adding warm stones to that bucket of water.
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