How opening a new account, whether an installment loan or revolving account will affect your credit score is different for every person and depends on your current credit mix.

The first impact it’s going to have will likely be slightly negative for two reasons.

1) Applying for new credit is going to be a hard inquiry on your credit report. This is a minor ‘infraction” on your credit and is only temporary, but negative none-the-less.

2) Its going to decrease the overall average age of your credit accounts. For example: If you have two accounts that are 9 years old and 7 years old – your average age of accounts is 8 years.

Adding a third, brand new account will drop that average to approximately 5 ½ years.

Also, if you already have revolving lines, I would consider opening a line of credit you don't already have to improve your "overal mix". In other words, if you have 2 revolving credit cards already, there may not be any point in opening another.

Better advice might be to open an auto loan, or something else you're missing in your credit profile.

So what are good reasons to open new credit acounts?

One of the bigger benefits of adding an additional account is that it could bring your revolving utilization down.

Let’s use the two cards above for examples:

1) Lets say one card had a limit of $10,000 and had a $5,000 balance.
2) And the other had a limit of $8,000 with a $4,000 balance.

You are at 50% utilization. ($18,000 limits & $9,000 in balances)

Adding another card with lets say $8,000 would now put you at about 34%

Or if you don't currently have any revolving credit lines. A large part of your credit score is based on your revolving usage. If you don't have any, then adding them to the mix will certainly help your score over time.

Now here’s the common sense part. The benefits of adding new credit cards to improve your credit score are only benefits if you use them responsibly.

Credit is a powerful tool that if used responsibly can have some great benefits. Let it get away from you by irresponsibility and it can take years to recover from.