This is part of our seven-step series Beginner’s Guide to Free Travel & Rewards.
In this post we will explain things like:
What is a FICO score and why does this score matter?
We will dispel myths such as “Doesn’t it look bad to have multiple credit cards?” or “Won’t my credit score tank when I start opening new accounts?”
While purchasing flights and hotel rooms with money will earn you points with each loyalty program, the fastest way to free travel is by signing up for credit cards with amazing bonuses.
While this is the best way to obtain free travel, this is also the part that worries people. There are many myths to signing up for credit cards. Doesn’t it look bad to have multiple credit cards? Won’t my credit score tank when I start opening new accounts?
Based on our personal experience (30+ active credit cards open and both with 800+ credit score) and extensive research, we can tell you that many of these credit card myths simply are untrue.
As a word of caution however, you need to be responsible with credit card spending and payments. Otherwise the interest you will end up paying offsets any bonuses you may receive.
This may not be for you if you don’t:
- Pay your entire credit card balance off every month
- Pay your bills on time
- Have a credit score of >700 (preferably >740)
- Closely track your credit card balances
If you have never had a credit card before, or have a credit score <700, it is unlikely that you will be approved for some of these top level cards offering high bonuses. In that case you may need to apply for a starter no fee credit card without a bonus to build your credit first.
Before you apply you need to know your FICO score and understand how it is calculated.
What is a FICO Score?
A FICO Score is a type of credit score created by the Fair Isaac Corporation. Lenders use this score, along with other information to assess your credit risk and to determine whether or not to extend you credit.
FICO scores range from 300 to 850. Generally a score above 700 is considered good, while a score above 800 is considered excellent. Most credit scores fall between 600 and 750.