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August 12, 2022

Why is My Credit Score Low After Getting a Credit Card?

Opening a new credit card can temporarily affect your credit score.

That’s because the card issuer reviews your credit information to approve you for a credit card, it is referred to as a hard inquiry or a “hard pull”.

A hard pull can cause a slight decrease in your credit score regardless of whether or not you are approved.

Your credit score can go down by simply applying for a card.

However, if you apply for multiple cards or use a lot of the new credit line, it can lead to a larger drop in your score. If you only have one or two cards that are less than a year old, it may be a good idea to get a new card.

Here are some ways opening a new credit card could hurt your credit score:

Higher balances. If you make large purchases or if you transfer the higher-interest debt to your card, a new credit card could hurt your credit scoreYour credit utilization is heavily weighted and is generally calculated per card.

Credit utilization rates. Lower is better, which is why experts suggest that you do not spend more than 30% on any credit card.

Consider your entire financial picture and not just your credit score. It may be worth accepting a lower credit score because of high credit utilization to pay off debt.

The average age of your account. The length of time you’ve had each credit card open will also influence your credit score. A new card can reduce the average age of your credit accounts. Having a few cards with a long history is better than having multiple newer cards.

Credit history length is a minor factor in credit scores and makes up around 15% of your FICO score. According to VantageScore, your accounts’ age and credit type are highly influential in your credit profile.

💡 Tip: Use our comparison to find the best credit card rates.

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Lorien is the Country Manager for Financer US and has a strong background in finance and digital marketing. She is a fintech enthusiast and a lover of all things digital.

Financial information reviewed byRoss Loehr - CFP®, MBA
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Last Updated: August 12, 2022

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