How many points will my credit score drop if I get a new credit card?

Will a New Credit Card Hurt My Credit Score?

Opening a new credit card account is a common financial decision, but a natural concern arises: how will this affect my credit score? The short answer is, likely not as much as you might think.

A new credit card application typically results in a hard credit inquiry. These inquiries, while a part of the credit reporting process, are reflected on your credit report and can temporarily impact your credit score. However, the extent of this impact is usually quite limited.

FICO scoring models, the most prevalent scoring system in the US, generally show a decrease of less than five points for a single new credit card application. This impact is temporary. What’s more significant is the long-term picture of responsible credit management. Paying your bills on time, keeping your credit utilization low (ideally below 30% of your available credit), and maintaining a diverse credit mix all contribute far more to your overall credit score than a single new credit card.

The slight dip in your score caused by a new credit card inquiry is often overshadowed by the benefits of having a new credit line. It allows you to manage your finances effectively, potentially improve your credit utilization ratio, and can even pave the way for future financial goals, such as purchasing a home or car.

Importantly, while the immediate impact might be minimal, responsible credit card use is paramount. Don’t open multiple new accounts in a short time frame, as that can have a more substantial negative effect. Prioritize responsible spending habits and timely payments to maintain and build a strong credit history.