Gardening your credit

Face it. We live in a world where credit is everywhere. We’re offered a credit card or new mortgage rate every time we turn on the TV, check email or even buy a new shirt. It’s so frequent and accessible, it’s easy to forget the potential impacts on your credit rating. Yes, getting approved can feel like an accomplishment worth celebrating.

But immediately after you’ve been approved for new credit, it’s possible for FICO Scores to temporarily drop. This could be for a number of reasons, such as the fact that you have a new hard inquiry on your reports or because you now have a new loan or credit card with no history of payments yet. Applying for multiple new lines of credit at once can have an even more substantial impact.

If this sounds like you, it might be a good time to focus on gardening your credit.

What is gardening?

Gardening your credit simply means that you are refraining from applying for new credit or taking any actions that might result in a hard inquiry. You’ve planted the seeds of new trade lines, now it’s time to water them and let them grow.

It’s important to approach this tactic with a goal in mind. Are you hoping to establish a history of on-time payments? Are you waiting for negative information to “fall off” your credit reports? Are you simply waiting for your accounts to age?

No matter which goal you choose, try to give yourself a concrete timeline. For example your goal might be “I’m going to garden my credit until July 16th so that my new accounts can age 6 months before I take on any new accounts.”

Once you’ve chosen a goal and timeline, all you have to do is stick with it! Don’t apply for new credit and keep an eye on your reports and scores.

Why garden?

The purpose of gardening is to nurture your new trade lines and, ultimately improve your FICO® Scores. Credit data is complex, so there is no guarantee that gardening will raise your scores the way you envision. Each credit profile is different, and FICO Scores consider many different behaviors. Learn more about what’s in my FICO Scores.

However refraining from new credit applications and waiting for new accounts to age can be a healthy choice for people who have a habit of applying for new credit often.