I just got the notification from Experian that the credit card I opened a month ago was just updated onto my profile, and with that my score went down 25 points (to 765). So now I have a total of two cards. Is that point-drop standard of what's expected when someone opens a new card and should it moderate itself up again over time? My utilization for the card (Freedom Flex) was 6%, my other card hasn't reported yet. If it helps, this is the first new credit card I've opened in years - my Chase Freedom was opened in June 2006.
Thanks much in advance for your responses :o) Happy New Year/New Year's Eve!
Adding to what others said:
Credit Karma provides you a VantageScore 3. Vantage is a real score, but it's used by virtually no lenders so it's not very useful to keep track of. Most relevantly, it's known for being extremely sensitive to utilization. Maxing out your card as you did, if it reports that maximum utilization, is very liable to producing a 100 point drop in a VantageScore 3.
FICO 8, the score used far more often, will drop significantly from utilization—especially from maxing it out—but it is not anywhere near that sensitive.
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r/CRedit
Posted by2 years ago
Archived
I applied for an AMEX credit card and got accepted and I was happy until i realised my credit score dropped by 100 because of this. Now it's barely in the good category, I'm so annoyed. Will this go back to normal? If I keep repaying normally?
I am genuinely so annoyed. If I knew this, I would never have applied for a credit card.
EDIT: It's based off Experian credit scores.
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level 1
If you haven't had much credit for long, inquiries and a new account will temporarily dip your credit score, sometimes by a fairly hefty amount. Thin credit records see larger swings.
As you make payments and the account ages, it will go from a temporary negative impact to a positive long-term impact.
level 2
Thank you for this helpful answer. I much appreciate it. I'm a lot more relieved now.
level 2
In their response below the card hasn’t arrived which means it hasn’t reported. An inquiry wouldn’t do that. Something else happened.
level 1
It didn’t drop that much from simply opening the card. Need more information. Have you looked at your credit report in full? See what’s on there. Or did you max out the card?
level 2
My credit card hasn't even arrived yet. They just simply accepted my application and it's on the way. I checked my score last week, it was 988 on Experian and now since applying for AMEX it's 889. On my overview on Experian, the only thing that could affect it was AMEX. Nothing else.
level 2
It's my first ever credit card also, I never had one.
level 1
A new account can do this. You must have a thin file (not too many accounts) and the new reporting put you into a new scorecard bucket (New Inquiry, Account under 12 months, much lower average age of accounts which is a big factor, recently seeking credit, etc). Since you took a hit, I'd consider applying for 1-2 more cards so they all age together and you don't take another hit if you apply for a new account in the next 12 months.
level 2
In 2018 my son’s FICO dropped from 678 to 596 after applying and being approved for Amex. It took about 6 months to climb back up and then pass the 748 mark. Sorry this happened to you, OP. Also, to be on the safe side make sure no collections were abruptly added. CA tend to stalk our credit files then add on resuscitated collections when they think you’re seeking credit or have more money after improvements. It’s good to give your reports a comb-through.
level 1
Give it 3 months. It will take 2-3 billing cycles for the card to show up on your CR ,but when it does assuming you've paid on time, you're score will go back up. Also, you needed the score to get the Amex, if you don't have anything else to apply for right now, don't worry about it. Also, now that you're in, if you apply for another Amex they won't do a hard pull.
level 2
I applied for another AmEx after being approved for the platinum delta skymiles (I actually wanted the AmEx gold but I’m an idiot and didn’t realize I applied for the delta lol). I called back and asked if they would consider me for the gold instead but they said I had to apply for it separately AND they did another hard pull. I called them back and asked about it and they said they do a hard pull every time even if you’re already an AmEx card holder. I had always heard they only pull once -and not just on Reddit. Not to mention I was denied because my delta was too new. When I asked if they could reconsider they said they can forward it to that dept but advised that sometimes they will do another hard pull so I gave up lol. I’ll just wait and apply later.
level 2
Thank you! That really helps. Yeah, my credit score was in the really good category that's why I got accepted for AMEX but now it's down to just barely above good. I will keep paying it back, so hopefully it will improve back and more :)
level 1
No way that was just from getting a card...at least in the U.S.
level 2
I'm in the UK, and honestly I was shocked too, there is literally no other factor on my Credit Overview that would affect it.
level 1
Have you used the credit card?
level 2
Not yet, it hasn't even arrived yet.
level 1
I had a thin file when I opened an opensky card, but after my first payment my score went up +98 points
level 2
Phew, that makes me relieved. I hope it will happen to me too when I make my first payment. The card hasn't even arrived yet, and it already dropped it's ridiculous.