Yes, opening a credit card will temporarily lower your credit score due to the “hard pull” or inquiry into your credit report required by most credit card companies to determine your creditworthiness. Most people will see a minor drop in their credit score after one hard pull, which can affect a score for up to 12 months. Multiple hard pulls within a short period of time can have a compounding negative effect on your credit score, depending on your credit standing to start with.
Opening a credit card can also reduce the age of your credit history, as far as your credit score is concerned. That makes up roughly 15% of your score. If you’re fairly new to credit already, you’re more likely to see your score drop after opening a new credit card.
Another big reason your creditworthiness might take a hit after you open a new credit card account is that you’ll have less money available to afford another new account should you apply again. The less money you have for bill payments, the riskier you are from a new lender’s perspective.
Uncertainty also plays a role in the temporary drop credit scores usually experience after opening a new account. Lenders never really know how a new cardholder will handle their new credit line, and a temporary credit score dip is like a warning sign that you’re still in the feeling-things-out period.
All of this is why it’s best not to apply for a new credit card in the months leading up to a mortgage or car loan application, or any other event where a slightly lower credit score can cost you a lot of money. If you’re concerned about how a new credit card will affect your score, WalletHub’s Credit Score Simulator can help you estimate the damage before you apply. You can find it in the Credit Analysis tab in your free WalletHub account.
In the long term, however, the initially negative impact of opening a new credit card account will turn into credit-score gains if you pay the bills on time and don’t use too much of your credit line. This will show that you can be trusted to handle the added borrowing power without abusing the privilege.
WalletHub Answers is a free service that helps consumers access financial information. Information on WalletHub Answers is provided “as is” and should not be considered financial, legal or investment advice. WalletHub is not a financial advisor, law firm, “lawyer referral service,” or a substitute for a financial advisor, attorney, or law firm. You may want to hire a professional before making any decision. WalletHub does not endorse any particular contributors and cannot guarantee the quality or reliability of any information posted. The helpfulness of a financial advisor's answer is not indicative of future advisor performance.
WalletHub members have a wealth of knowledge to share, and we encourage everyone to do so while respecting our content guidelines
. Please keep in mind that editorial and user-generated content on this page is not reviewed or otherwise endorsed by any financial institution. In addition, it is not a financial institution’s responsibility to ensure all posts and questions are answered.