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

Got approved for a new card but noticed something strange in your credit report? Is the question “why is my credit score low after getting a credit card” echoing in your head?

Don’t worry. You didn’t do anything wrong. This is only temporary damage that will get fixed once you start using your card responsibly.

To find out everything you want to know about credit cards and how they affect your credit score, check out our comprehensive guide. We’re here to answer all your questions.

How to Calculate Your Score?

Nearly 70% of Americans have a credit score higher than 670. Such a figure is good enough to get a loan or a credit card with a favorable interest rate.

But your otherwise good-to-excellent FICO score can easily drop if you’re careless with it. In order not to end up wondering, “why is my credit score going down,” let’s first see how agencies evaluate your creditworthiness.

All FICO scores are unique. The three national credit bureaus — Experian, Equifax, and TransUnion — calculate your credit considering five key factors. Yet, not all of them are equally relevant.

These are the five main data categories determining your FICO score:

  • Payment history (35%)
  • Amounts owed (30%)
  • Credit history length (15%)
  • New credit (10%)
  • Credit mix (10%)

As you can notice, payment history is crucial for your FICO score, as it reflects how risky you are as a borrower. So, before you ask “why did my credit score drop without a reason,” make sure all your payments are made on time. If you’re positive they are, the problem may lie somewhere else.

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

You finally got it — the new credit card you’ve been longing for, hoping you’ll manage to save some cash. After a few payments, you notice that your credit rating has changed, but not for the better, as you anticipated. Your FICO score has dropped for a reason unknown to you. And expectedly, you’d like to know why.

Average age of account/age of credit history

As mentioned above, your credit score is calculated according to five factors. One of them is the credit history length, which comprises 15% of your score.

The age of your credit history is counted from the day you opened your first account and involves active credit cards, loans, mortgages, and other lines of credit.

The longer you’ve had your credit, the higher your score will be.

But how does opening a credit card hurt your credit?

Three factors can affect your credit age: the length of your oldest account, the length of your newest account, and the average age of them both. Opening new accounts can reduce your accounts’ average age, particularly if you opened the last one a while ago.

In case you have a long credit history and several accounts, the new credit will not affect your credit considerably. Otherwise, obtaining a new card will significantly lower your account’s average age.

Hard inquiry

So, you’ve decided to get a new card, but you don’t have a clear idea which one fits your needs best. Because of this, you filed numerous applications with different companies.

Congratulations, you’ve just made a terrible mistake!

If you’re about to ask “does applying for a credit card hurt your credit,” the answer is yes, it does. If you apply with too many issuers, your FICO score will drop significantly. But who is to blame for this? Simply put, the hard inquiry.

Whenever you apply for a new credit card, the respective issuer will perform a hard pull to check for consumer credit risk,i.e., whether you’re creditworthy enough. Even if you end up rejected or refuse the card, the hard inquiries will appear on your report. What’s even worse, they will stay there for up to two years.

So here might be the answer to your question, “why is my credit score low after getting a credit card”.

Namely, credit pulls comprise about 10% of your credit score, and every hard inquiry lowers it by a few points. If you submitted too many applications and had numerous credit pulls placed on your report, no wonder why your credit score dropped considerably.

But don’t despair, hard pulls don’t cause permanent damage to your credit. If you have good or excellent credit, this is just a small figure and will not have such a drastic impact. Also, once you start using your credit card and make timely payments, your FICO score will restore or even improve.

But how many points does a hard inquiry affect credit score exactly? Not many, just five or even fewer. But when multiplied by the number of loan applications you make, this number can rise significantly.

So, you should either limit the number of credit providers you approach or look for some that perform only a soft pull. Typically, a soft inquiry is used for presenting you with an offer or for a pre-approval. Then, before inking the deal, the lender or card issuer runs a hard inquiry. But that will still help you curb the damage to your score, especially if you want to shop around for the best terms.

Credit utilization rate

Having more than one credit card is a double-edged sword. On the one hand, you have a chance to buy some things you’ve always wanted but couldn’t really afford. On the other hand, this is a safe way towards ruining your FICO score.

Now that you’ve got a new credit card, try to resist the temptation to max it on various purchases. You might not be able to repay all the due amounts. Again, delayed or missed payments could lower your score as everything is reported to the credit bureaus. Plus, your credit card utilization rate will soar due to high balances.

Once you get into debt, you may want to apply for a balance transfer card to get rid of it. This is, in principle, a good idea, provided that you’re looking for the best way to build credit. But keep in mind that opening a new credit card may increase your credit utilization ratio, particularly if you make a big purchase right after obtaining it. The same could happen if you cancel a credit card.

Yes, we know that you’re all confused and wondering, “how does it hurt your credit to close a credit card” while, at the same time, opening a new one also affects it. Bear with us, and we’ll make it all clear.

A credit utilization rate stands for your credit card balances compared to your credit limit. In other words, it indicates how much of the available credit you use. The more you spend, the less of your credit limit will become available. As a result, your credit utilization rate will rise, whereas your credit will drop.

If you make a big purchase right after opening a new credit card, it might take up much of your credit limit. Closing a credit card may have the same result. Namely, when you cancel one of your cards, your credit limit will increase. Consequently, your score may drop.

Benefits of Getting a New Card

Does opening a credit card hurt your credit? Yes, it does, and you’ll notice a drop in your credit after the application. But it’s only temporary. Meanwhile, owning a credit card can have long-term benefits. With the right one, you have an outstanding opportunity to save some money while shopping, buy what you’ve always wanted, and make your FICO score stellar.

Increased credit limit

Your credit card shouldn’t be something you keep hidden in your drawer and use only in case of emergency. Quite the contrary, with the new cards that reward each of your purchases, that piece of plastic could be an outstanding tool. But if you opened it while you were a student or when your FICO score wasn’t that good, the chances are that you have a low-to-average credit limit.

The great news is that you can request a credit limit increase. Note that this is one of the factors that may affect your credit score. Since it stands for the available credit you have at your disposal, it’s closely related to your credit utilization rate.

Therefore, to avoid maxing your card because of the low limit and raising your utilization ratio, consider requesting a credit limit increase. It will not only boost your credit utilization rate but also have a positive effect on your FICO score. Consequently, you’ll be able to get more favorable loan and credit terms.

But make sure you don’t take the limit increase as an opportunity to overspend. Then you’ll end up wondering why your credit score dropped for no reason. Instead, make the most of it by allowing it to help you grow financially.

In addition to boosting your credit score and lowering your utilization rate, the credit limit increase will let you:

  • Have valuable resources to turn to in case of emergency
  • Avoid opening new cards and wondering “why is my credit score low after getting a credit card”
  • Avoid opening too many cards and still losing FICO points because of the unused credit cards

Credit mix

Even though you make all your payments and live completely debt-free, this is not quite beneficial for your credit history. Namely, credit scoring systems such as VantageScore and Fair Isaac Corporation assess everything that pops up on your credit report. The more account types you have, the better it is for your overall credit score.

For this reason, getting a credit card will add to the diversity of your credit. As a result, your score will be higher. But this applies to your first credit card only. Adding new credit cards won’t have any effect.

Speaking of which, we come to the next question: how many credit cards is too many?

The optimal number of credit cards you should have depends solely on your financial situation. If you can’t manage your payments, even two can be too many. Though having a new one could be beneficial for your utilization ratio, getting too many credit cards over a short period of time isn’t wise.

There isn’t a definite number that is regarded as too many. Still, it’s advisable to apply for extra cards only when you really need them.

On-time payments

No matter how tempting it may be, never skip your payments even when you’re a bit short with cash. You may regret it once you realize that you need to pay more than twice the regular amount — the payment that you missed, plus the new one, and the obligatory late fee.

Since all your payments are reported to the credit bureaus, your score will eventually drop. Consequently, you may end up asking yourself “how long does it take to establish credit again.”

As a reminder, payment history makes up the most of your credit report — 35%. So missed payments can severely damage your FICO.

Conversely, making all your payments on time will have multiple benefits. First and foremost, if you pay at least the minimum due, you have an opportunity to boost your FICO score.

And how long does it take to build credit with a credit card? The answer is about six months if you’re building it from scratch. In case you’re improving your credit, it may take 12 to 18 months.

Final Thoughts

Is it possible to apply for a credit card without affecting your credit score? Unfortunately, no.

At some point during the application process, the card issuer will perform a hard inquiry which will lower your score by a few points. But unless you file too many applications, the decrease won’t be significant or long-term.

Should this prevent you from getting a new credit card? Certainly not, as there are many benefits of using a credit card. With some of them, you could even save cash while making your everyday purchases. Ultimately, you’ll even manage to boost your credit score and get an opportunity to apply for a loan or a credit card with more favorable rates.


Will closing a credit card hurt my credit score?

Yes. Canceling a credit card will increase your credit utilization rate, as you will now be using more of your available balance. As a result of a higher rate, your FICO score will drop.

How many credit cards is too many?

If you’re struggling with payments, even two could be too many. There isn’t an optimal or the best number of credit cards. The question should be: “how many can you handle?”.

How much of your credit should you use?

The optimal percentage is 30. But the less of your available credit you use, the better for you. Anything higher than 30% will suggest that you’re overusing your credit due to financial difficulties.

How many points does a hard inquiry affect credit score?

A  hard inquiry will lower your credit score by about five points. The problem may arise if you filed too many applications. Then the decline in your score will be much steeper, and you’ll give the impression you’re too desperate for money.

Thus, if you’re wondering “why is my credit score low after getting a credit card,” the answer may lie in the hard inquiry that card issuers perform after your application.


To be honest, I never wanted to become a writer. My dream job was a software developer/engineer or a graphic designer. But, as I’m far more skillful with words than maths, I got a degree in English language and literature. Now that I’ve been a content creator for six years, I’d never think about any other profession. I write as if my life depended on it. But don’t think writing is all I know of. When I get tired of it (yeah, it’s possible), I do yoga or play the guitar. When inspiration strikes me, I grab my camera and go out for a photo shoot. Although I prefer the nice weather, I could freeze to death for just a few good snaps.

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