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This is Merrill Chandler with Creditsense.com and I’ve got a quick holiday tip for you to help you keep your credit scores high without beating the daylights out of it with your shopping strategies.  Let me show you how a simple transaction in a store can actually lower your credit score.

So let’s say you have a Visa or a Master Card in your wallet and you are going to go shopping.  Let’s say that Visa or Master Card is worth 100% of the possible points that would be applied to your credit score.  It depends, based on your particular credit profile, as to how many points it’s worth.  But let’s say it 100% that’s going to be added to your credit profile; your credit score.

If you have an Amex or a Discover card, it is only worth 80% of that Visa or Master Card when it comes to points that will be attributed to your score.  80%.  You loose 20% by having this card in your wallet over that card in your wallet.

Worse than that, a store card.  This could be Nordstrom, Macy’s, a store that carries it’s own credit paper.  When you apply and they give you a credit line, they are lending you the money.  That is only worth 60% of the possible points that would be attributed to your credit score.  So, 60% of what a Visa or Master Card would be if you had that card in your wallet.

Worse still, and here is the tip, there are other store cards that are finance company cards.  They are carried by banks.  They are carried by finance companies.  Did you realize that they are only worth 40% of that Visa or Master Card.

What happens invariably when you go shopping?  A clerk that is checking you out will say, “Did you know that you can save 10, 15, sometimes 20% off of your purchase if you will apply for a store card. Now don’t be deceived.  It may say that it is a Home Depot Visa or a Victoria Secret Master Card.  If it is coming from one of these stores that are done by a finance company, you are only going to get 40% of the possible points that would be attributed to your credit score. 

Now here’s the rub.  You loose points in two ways.  One, you’re going to get negative 6 to 10 points by having the inquiry.  They’re going to check your credit score to see if they are going to offer you that card.  You drop your score 6 to 10 points right off the bat.  If you are approved, you’re going to get a non contributing card and it’s going to be... What’s it’s age? It’s going to be zero months, right?  It’s not going to be worth anything.

And if you have a Visa or Master Card that’s 5 years old...  What’s the average between zero and 5 years?  It’s going to be 2.5 years.  Your average age is going to drop by half.  That is a significant drop and your credit score will reflect it. 

Don’t get one of these.  Protect your credit score.  Protect your credit profile by getting a HIGH VALUE Visa or Master Card that has it’s own rewards that actually contributes to your credit score and gives you miles, benefits, points and other things that you can use, that you will enjoy by using that credit card.

This is Merrill Chandler at Creditsense.com and this makes sense to me.