 TITLE: What to Know Before You Apply for a Store Credit Card CONTENT: How a Store Card Can Affect Your Credit\n---------------------------------------\nIn general, a store credit card affects your credit the same way a traditional card does. When you apply for a store card, the card's issuer will typically run a hard inquiry on your credit report, which can temporarily knock a few points off your credit score.\nIf the card issuer reports your activity to the three national credit reporting agencies—Experian, TransUnion and Equifax—responsible use and on-time payments can help improve your credit score.\nOn the flip side, missing payments and racking up a high balance could have an adverse effect on your credit score. This is especially the case with store credit cards because they typically offer lower credit limits than traditional credit cards.\nFor example, let's say you qualify for a $400 credit limit on a store card and a $4,000 limit on a traditional card. If you put $200 on each card, your credit utilization rate (your balance divided by your limit) would be 50% on the store card and 5% on the other card. Credit experts generally recommend keeping your utilization rate below 30%, and the lower, the better.\nAfter payment history, credit utilization is the most important factor in your credit score calculation. Because a lower credit limit creates a greater risk of having a high utilization rate, you'll need to be more careful with store credit cards and make an effort to keep your balance low. END