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What will happen to your credit score if you open a new credit card today? The short answer is that you’re likely to see a minor drop in your credit score when you apply for and open a new credit card. According to several reports, opening a new credit card can be expected to result in a drop between 5 and 10 points on your FICO® Score.

However, it largely depends on the rest of your credit report and where your score stands before it. Someone with a flawless 850 FICO® Score who applies for a new credit card could potentially see a larger drop, while someone with an average score in the 700 range would likely see a loss of fewer points.

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Why does opening a new credit card hurt your score?

There are two main reasons why opening a new credit card tends to have an adverse effect on your score. And they have to do with how your FICO® Score is calculated.

First, 10% of your FICO® Score comes from a category known as “new credit.” This considers hard credit inquiries (which happen when you apply for a new credit account), as well as newly opened accounts that appear on your credit report.

Second, 15% of your score comes from the “length of credit history” category. Among other time-related factors, this considers the average age of your credit accounts and the ages of each individual account you have. A brand-new credit card account will lower your average account age.

So the affected categories only make up 25% of your score. Plus, if you have a long-established credit history with a bunch of older credit card accounts, a mortgage, an auto loan, and others, the impact on the “length of credit history” category should be rather minimal. That’s why the drop is only likely to be 10 points or less, but it’s still a drop. And it’s important to expect it.

Don’t let it prevent you from opening a new card

While your score can experience a drop when opening a new card, not only is it likely to be a small one, but it is likely to be short-lived. For one thing, the FICO formula only considers hard credit inquiries from the past 12 months, and the closer they get to that age, the less they’ll be factored into your score.

Furthermore, your new credit card (assuming that you use it responsibly) can influence your score in positive ways, and these can quickly outweigh any of the negative impacts. As an example, 35% of your credit score comes from your payment history, so after a few on-time payments, this can be a positive factor — and that’s especially true if you don’t have more than one or two other active credit card accounts.

If you keep your balance low on your new credit card, it can also help you in the “amounts owed” category, which makes up 30% of your FICO® Score. Using a low percentage of your available credit (ideally 30% or less) is the best way to boost this category.

The bottom line is that it’s wise to expect a small FICO® Score drop after you open a new credit card, but that shouldn’t necessarily discourage you from getting a new credit card if you want one.

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