Congratulations, you have a fabulous credit score, and you can certainly benefit from it the next time you refinance or apply for a car loan. But how vigorously you will defend your high score?
I have been referring some amazing credit card offers to my colleagues, but more often than not, their reply was "yes, they are good, but a credit card application will hurt my credit score, so I'll not try."
Yes, they are right. A credit card application will hurt your score a bit, because recent credit inquiries are factored in the score calculation, but is this the right excuse to pass the next deal that will make you a few hundred dollars better off?
I am a firm believer that when it comes to personal finance, everything has a price. In the past, I had been cheap enough to apply a card for $25 gift certificate. Nowadays, my threshold is $100 -- below that, it might not be worth my time (and credit score). Last week, I took another 12-month 0% APR balance transfer offer from Discover Card for about $9,800. The transaction fee is $29, so I figured out I can count on at least $300, if not more, from interest income before I have to pay it off. I consider it a nice price to sell a few credit score points.
Think about it. A credit inquiry only hurts your score temporarily, and in the long run, because you have higher total credit line, your credit utilization will decline, which will actually help your credit score down the road. (Credit utilization is part of the credit score formula, too.) Plus, it probably does not make much difference as long as you keep your score above 700.
To draw an analogy, your credit score is like the gas level of your car. You can keep it high if you don't drive, but if you want to make meaningful use of your car, you have to tolerate a less-than-perfect in your gas level.