Personal loan

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Cat stew

• April 05, 2020 20:02

ey, really quick question. If I am going to be applying for a personal loan soon and its based off my credit score, will opening a credit card hurt or help my chances? Sometimes i think hurt because its a new hard inquiry then i think help because i will have open credit and my score will go up, increasing my chances to be approved for the personal loan. Is it a good idea to open one really quick and not use it or should I not get a credit card right before requesting a personal loan? Cat S

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  CHRISTOPHER BATTISTA

  • May 15, 2020 20:21

  you are correct in all your assumptions.  And that is what makes it complicated.

  a new card will increase your score. a hard inquiry is only a problem if you aren't approved, or don't take the loan/line, then you see the reduction in score. if you take the loan/line the improvement is greater than the loss.

  My advice to this would be based on your current credit position. You aren't very likely to get a personal loan with no other credit lines, or very young credit.

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  Emily Morgan

  • July 13, 2020 17:52

  That’s true. I believe you should open a credit card so that your credit rating improves. It will help you get approved for a personal loan in the near future and get the most suitable rates as opposed to having no or little credit history or bad credit rating.

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