Will Opening a Credit Card Hurt Your Credit? [Must-Knows]


Having a good credit score can help you qualify for a variety of loans and credit lines. Maintaining a good FICO score is also essential when applying for a new credit card. But does opening a credit card hurt your credit?

Credit cards are great for quick cash injections, purchasing household appliances, or spoiling yourself while on holiday. Having too many credit cards, however, is not good for your financial future. But what if it’s your first time applying for a credit card? Will it hurt your FICO score and future loan applications? This article addresses these questions and more.

What Factors Affect Your Credit Score

Even though there are multiple factors, aka credit score calculators and methods, the most common one that a credit card issuer refers to is the FICO scoring method—a three-digit number ranging between 300 (poor) and 850 (excellent). Created by the Fair Isaac Corporation (FICO), this scoring system provides a standard in the industry.

Some may ponder the question: Does opening a new credit card hurt your FICO score? First, consider the following five major components that do affect your FICO score.

  • Payment History

Thirty-five percent of your FICO score is determined by your payment history, which indicates your ability to stick to payment schedules. Conversely, neglecting to pay your debt or inconsistent payment patterns will have a negative effect on your credit score.

  • Debt-To-Credit Ratio

Thirty percent of your FICO score is determined by the amount you owe, as well as your credit usage. If you max out your credit cards or utilize most of your credit line without repaying it, you might be seen as a liability. Credit card companies take into account whether you used your credit card responsibly. By looking at your debt-to-credit ratio, they’ll be able to determine if you’re a responsible user.

  • Length of Credit History

Fifteen percent of your FICO score is determined by how long you’ve had loans and credit lines in your name. The longer you’ve managed and maintained your credit, the better this score will be.

  • Credit Mix

Ten percent of your FICO score is determined by the different types of credit you have in your name. So getting a second credit card when you already have a credit card or loan isn’t such a bad idea. This will allow you to add variety to your profile. Different types of credit can include retail store credit cards, car loans, mortgages, and monthly mobile subscriptions.

  • New Credit

Then percent of your FICO score is determined by the number of new credit lines you’ve recently opened, including the hard inquiries that credit card companies make on your credit score.

Opening a new credit card can hurt your credit score because credit card issuers conduct a hard pull on your credit report. Typically, you’ll only lose a few points when they do a hard pull, but applying for numerous credit cards in a short period will mark you as an increased risk and negatively affect your score.

It’s advised that when you do get rejected numerous times for a new credit card, that you first take measures to fix your credit score before reapplying.

How Many Credit Cards are Too Many?

Having a healthy credit mix that you can manage responsibly is good for your overall credit score. But what if you have a good credit score and multiple credit cards? Does getting a credit card to improve your credit score? This is dependent on how you manage your monthly payments and how much credit you use.

Many wish to get another credit card from another card issuer because it might have lower interest rates. Other benefits might include rewards programs or travel benefits. So having multiple credit cards isn’t uncommon.

According to Gallup, the average number of cards Americans have is 3.7. It’s therefore advised that you shouldn’t have more than four credit cards. But ultimately, aim to have one or two cards that you pay off religiously each month. This will avoid unnecessary closings of already established credit cards.

Does closing a credit card hurt your credit? Yes, closing credit cards because you have too many will affect your credit history. A few other problems might also occur when closing a credit card:

  • Reduces the amount of credit you have available that ultimately affects your debt-to-credit ratio.
  • When your card is closed, payment history will fall away from your credit report.
  • Lose valuable credit history.

Instead of closing an established credit card, you should pause it or keep it as a backup.  

A New Credit Card Can Build Your Credit Score 

Responsibly managing a new credit card is one of the best ways to increase your credit score. Even if you have no credit history, there are great credit card providers available for first-timers.  Consider the four following ways a new credit card can increase your credit score:

  • Reports to Credit Bureaus

Credit card companies report to the three main credit bureaus: Experian, Equifax, and TransUnion. When you properly manage your card, your reports will be positive, ultimately increasing your credit score.

  • On-Time Payments

Since payment history makes up 35% of your overall FICO score, it’s an essential aspect of calculating your credit score. With a new credit card, you have the opportunity to repay credit card debt on a regular monthly basis, which helps build your score.

  • Improved Credit Mix

Does opening a credit card hurt your credit? When you add a credit card to your list of loans and in-store credit lines, you’ll have a higher credit mix score on the FICO scoring system. But if you manage your credit card well, your credit score won’t be affected.

  • Utilization Rate Might Decrease

To calculate your credit utilization rate, the scoring model considers the balance on your card and the credit limit. Therefore, you should limit your credit usage or pay off the credit used within the monthly repayment due date. It’s advised for users to keep their credit utilization rate below 10%.

Users have the option to acquire a secured credit card that helps with building credit.  These are seen as stepping stones for those who don’t have good credit scores. Building your credit score will help you qualify for better benefits and card options in the future.

How New Credit Can Decrease Your Credit Score

Can opening a new credit card affect your credit score negatively? After applying for a new credit card, your score might decrease, leaving applicants with the question: Why did my credit score drop after getting a credit card? Consider these three reasons why this might have occurred.

  • Neglecting to Pay on Time

If you’re not used to paying a fixed monthly fee, the new expense might be challenging to adjust to. Credit issuers can report you after 30 days of payment not being received when you don’t pay on time. To avoid being reported for late payments to major credit bureaus, you should never miss a payment. Late payments can stay on your credit report for as long as seven years.

Make sure that you have a good credit utilization ratio to avoid the inability to make regular payments.

  • Credit History Is Affected

Credit card applicants’ credit history will be affected since the account was recently opened. For example, if you’ve recently opened a few new credit lines, your score might slightly decrease because of the short length of the accounts being active.

  • Hard Inquiry on a Credit Report

Each time you apply for a credit card from an issuer, the company will conduct a hard inquiry on your credit report. How many points does a new credit card lower your score? This amount may vary from situation to situation, but, in general, users can expect a five-point drop after a hard inquiry. And If you fill out many applications within a short amount of time, your score might drop even more.

Free Credit Report

All Americans are entitled to a free credit report from the three main credit bureaus in the country, namely TransUnion, Equifax, and Experian. In addition, citizens can visit www.annualcreditreport.com online or phone 1-877-322-8228.


As long as you keep your revolving credit card balances low, stick with monthly repayments, and avoid opening up too many credit cards, then your new credit card can help you build your credit score.


Will Opening a Credit Card Raise Your Score?

Yes. If you manage your credit well by making regular payments and ensure you follow a good debt-to-income ratio, your credit score will increase within time.

How Much Does Opening a Credit Card Hurt Your Credit?

The hard pull conducted by credit card companies can hurt your score by an estimated five points.

Is it Bad to Have a Credit Card and Not Use it?

It will hurt your score to close an unused credit card. Instead, try to change to a better plan or product with the credit issuer.

What is the Fastest Way to Build Credit?

If you have poor credit, you can consider a Chime credit builder card (here’s a detailed review) to help you build your FICO score fast.

Does Opening a Credit Card Hurt Your Credit?

Initially, the hard inquiry done by the credit issuer will affect your credit score slightly. But if you manage your new credit card well, your credit score will increase within a few months, or even weeks.


I learned a lot about finance after working for a digital marketing company specializing in investing and trading stocks, forex, etc. After that, I got exposed to other verticals such as wealth management and personal finance, which further improved my understanding of the financial world.

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