Changing credit card accounts may have a negative effect on your
credit score, but if it does, the effect is likely to be minor.
The most specific information I found on this was in the document
"Understanding Your Credit Score," from Fair Isaac Corporation,
developer of the widely used FICO credit scores.
On page 14 (page 16 to Adobe Reader), it says:
"FICO scores consider inquiries very carefully, as not all inquiries
are related to credit risk. ... Inquiries don?t affect scores that
much. For most people, one additional credit inquiry will take less
than five points off their FICO score. However, inquiries can have a
greater impact if you have few accounts or a short credit history.
Large numbers of inquiries also mean greater risk: People with six
inquiries or more on their credit reports are eight times more likely
to declare bankruptcy than people with no inquiries on their reports."
An application for a new account counts as an "inquiry." Considering
that a FICO score is likely to be several hundred, five points is not
Other web pages on credit scores agree that too many inquiries can
hurt your score, but it seems unlikely that one application would be
considered too many. Your current account would stay on your record,
so changing accounts would not remove whatever score you have built up
from that account.
United States Federal Trade Commission page on credit scoring
Article on credit scoring on MSN Money by Terry Savage
Experian credit scores FAQ answer on the effect on a score of shopping for credit
Disclaimer: Your credit score will be affected by many factors.
Google Answers only provides general information and cannot guarantee
what will happen to your credit score as a result of changing credit
I hope this information is helpful. If you need any more information,
please ask for a clarification.
Clarification of Answer by
02 Jan 2005 14:45 PST
When anyone asks a credit reporting agency for a report on a person's
credit, that counts as an inquiry, but not all inquiries affect the
credit score. For example, if you request a report on your own
credit, that is an inquiry, but it doesn't affect your score. The
inquiries that affect your score are those generated by your
applications to businesses for credit. Those are the ones where
having too many will lower your credit score.
FAQ answer on inquiries from the credit reporting agency Trans Union
FAQ answers from Experian
Explanation of what an inquiry is from mycreditcheck.com
Opinions vary on how frequently you should check your credit report.
Experian says to check it before applying for credit or a loan.
The California State Office of Privacy Protection says at least once a year.
The CreditTalk website says you should check it "at the beginning of
every year, six months before buying a new car, home or other major
purchases and six months before seeking a job that requires a security
clearance or background check."
Michael T. Killian, About.com's Guide to Credit Management, says once
every six months to a year.
Trans Union says every 90 days. Note that reporting agencies like
Trans Union make money when they can sell you credit reports
frequently, so their advice may not be unbiased.
Annie Bauers on the digits.com site says every three months.
CarTrackers.com says once a month.
Finally, at the ridiculous extreme, credit report vendor ReliaCredit
says you should check your credit report "as routinely as you check
Personally, I think twice a year would be plenty, unless there is a
particular reason for a check.
An amendment to the Fair Credit Reporting Act (I am assuming you are
in the United States) will entitle you to one free credit report per
year per reporting agency. It is currently being phased in, so the
free report may or may not be available to you now, depending on where
There is no reason other than cost and bother not to check your credit
report more than twice a year. Checking it will not affect your
I hope this helps.