Page 26 - Winning The Credit Game Bundle (CK Patrick)

14 THE CREDIT GAME

join wouldn’t you really want them? Wouldn’t you offer them a super-
great paycheck—or interest rate and rewards package—to join you?
Credit mix makes up about 10% of your credit score.
5. New credit. Let’s extend the sports metaphor here: if a player just
started playing for a bunch of new teams in a short span of time, you’d
be kind of nervous about them, wouldn’t you? What if they’ve over-
committed? What if they can’t perform well for all of you at the same
time, and they just haven’t figured that out yet?
Opening a lot of new lines of credit, or attempting to do so, is a red
flag for lenders. It suggests that you might be having a lot of trouble
paying bills, or might be trying to borrow more money than you can
feasibly pay back.
This can be especially frustrating, because shopping around for just
a single loan can look like you’re applying for too many lines of credit
—or not, depending on how strategically you act. This once happened
to me: I only needed one loan, but because of the way I went about
applying for one, it looked to my creditors like I was seeking dozens of
loans. My credit score took a big hit because of that.
We will explore how to be strategic in applying for new lines of
credit, to ensure you get the loan you need without sending out
multiple applications that raise red flags for lenders, later in this book.
Your number of recent credit applications make up about 10% of
your FICO score.

Having read this description, perhaps you now have a better idea of
just how important strategy is to the credit game. Having wealth
already in your pocket is the easiest way to make sure you pay your
bills on time, but decisions about which bills to pay first, how to strate-
gically use your existing lines of credit, when to borrow money and
from whom, and how to apply for loans you need can all make your
credit score better—or worse.
In this way, someone with lots of money but little knowledge of the
game can end up with less borrowing power and higher interest rates
than someone with little disposable income but excellent strategic