How Opening a New Credit Card Affects Your Credit Score (2023)

Credit Cards Credit Score How Credit Works How To Use Credit Cards Wisely


by Elizabeth Aldrich

You want, or need, a new credit card. But you don’t want your credit score to take a hit.

Well, I’ve got some good news for you…and some bad.

Contrary to common opinion, opening a new credit card is not necessarily bad for your credit, just like cancelling a credit card is not necessarily good for your credit. In fact, opening credit cards can actually help you to improve your credit score in the long run. But it can kill your credit if you’re not careful.

Credit scores aren’t quite as black and white as people think. Your credit score is made up of five different factors, often called “The FICO 5”. Because of this, and because everyone’s financial situation is unique, the same action can raise one person’s score while lowering another’s.

It helps to take a look at the factors that make up your credit score in order to better understand how certain actions will affect it. Here are “The FICO 5” and the percentage of your score each factor makes up.

Payment History: 35%

If you know nothing else about how your credit score is determined, know that paying your bills on time is absolutely the most important thing you can do to improve and maintain your credit score.

Credit Utilization Rate: 30%

Your debt to credit ratio should be below 30% to maintain a good credit score. For example, having $1,000 of debt on a credit card with a $10,000 limit is much better for your credit score than having $500 of debt on a credit card with a $1,000 limit.

Length of Credit History: 15%

This is the amount of time you’ve had access to credit (since your first credit card) as well as the average length of time you’ve had all of your credit cards. The longer, the better.

New Credit: 10%

Having too much new credit on your credit report poses a risk and thus lowers your score.

Types of Credit Used: 10%

The more variety you have in your credit history, the better. If you have credit cards and an auto loan, for example, these are two different types of credit, and your score will be improved.

With this understanding, let’s take a look at how opening a new credit card impacts your score.

3 Ways Opening a New Credit Card Can Hurt Your Credit Score

  1. Hard inquiries hurt your credit score. Every time you apply for a new credit card, the credit card company pulls your credit report, so your score gets knocked down a few points even if you are denied for the card. The decrease is only temporary though; your score should bounce back up within a few months, and inquiries older than a year are not considered.
  1. Lowering your average credit history age hurts your credit score. By applying for a new credit card, you are slightly lowering the average age of your credit history. If your credit history is fairly long (even over a few years), this isn’t a big deal. But make sure you don’t close one of your oldest cards or replace it with a new upgraded card, or your average age will decrease significantly.
  1. New credit can hurt your credit score. When your credit score is calculated, FICO looks at how many new accounts you have opened. If you have opened too many recently, it’s considered a risk, and your credit score will go down. As long as you aren’t applying for many accounts in a short period of time, this isn’t a problem.

3 Ways Opening a New Credit Card Can Help Your Credit Score

  1. A lower credit utilization ratio will increase your score. Ideally, your credit utilization ratio should be below 30%. If you have $3,000 debt, you will want access to at least $10,000 in credit to maximize your score (for example, two credit cards, each with a $5,000 limit). Opening a new credit card, or increasing the limit on an existing credit card, is a great way to quickly decrease your credit utilization ratio – but only if you don’t rack up more debt.
  1. Opening a new type of credit account will increase your credit score. Perhaps you’ve taken out loans before but rarely or never open credit cards. Adding one into the mix can be helpful.
  1. On time payments are the best way to increase your credit score. If you open a new credit card and always pay it off in full each month by the due date, eventually you’ll start to see your score increase.

5 Most Important Tips for Opening a New Credit Card

  1. Only apply for one credit card at a time, and don’t apply for more than one card every six months or so. If you’re denied for your first credit card application, it’s okay to apply for a different credit card in a short period of time, but you should minimize inquiries.
  1. Because of #1, you’ll want to do your research and read reviews before applying for a new credit card. Make sure that you’re applying for a card you can qualify for. If you have an average credit score, don’t apply for a credit card that requires an excellent score.
  1. You’ll also want to make sure that you choose credit cards that fit your spending and needs well. If you drive a lot, get one that offers rewards on gas. If you want to travel on the cheap, lots of cards offer huge savings on flights and hotels. For those with a lot of debt, there are even credit cards that help you pay off your debt interest-free.
  1. Don’t apply for a credit card right before you finance a major purchase. If you plan to purchase a house or car, for example, in the next 6-9 months, it’s best to limit credit inquiries for now.
  1. Don’t be scared of high credit limits. If you can be responsible with your new credit access, the higher the credit limit, the better. It will decrease your credit utilization ratio.

Whatever you do, make payments on time every month. If you can, always pay your cards off in full. Never close old accounts unless they’re charging you an annual fee. If you’re worried about spending money on an old account, simply cut up the card.

Finally, spend responsibly! Don’t max out your new card. Never open a new card with the intention of spending more than you can afford to pay off.

About the author

How Opening a New Credit Card Affects Your Credit Score (4)

Elizabeth Aldrich

Elizabeth is a freelance writer and “digital nomad” specializing in small business, entrepreneurship, career advice, real estate, travel, arts, and culture. She’s written for outlets as varied as Rawckus Music and Arts Magazine, Itcher Entertainment, Sweden Tips, Houzz, Hometalk, JobHero, Tico Times, and Eugene Weekly. Thanks to a three-year stint in a travel job, a knack for mining great deals, and credit card churning, she has not paid for a single flight since 2012, despite her constant travels. You can find her on Twitter @LizzieAldrich or her website,

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  • The authoress told us that we should not close old accounts when they are paid down. That is true, as age of credit figures into your credit score.
    However, she advised people to cut up their older cards if they are afraid that they’ll run up the balance again.
    Freezing cards into a block of ice would be a better ploy.
    You would be able to periodically use the card(s) for a small purchase that you can pay off promptly — after purposefully going through the inconvenience of thawing that block of ice.
    If, however, you cut up any older card(s) the issuer(s) could close any of those card accounts due to lack of account activity. That would cause you to have a decreased length of credit history when the card eventually falls off of your credit history. Never let your OLDEST credit card get closed due to inactivity. As stated above, that can reduce the length of your credit history once the card falls off your credit history — plus, that will decrease your amount of available credit, which will increase your overall credit utilization if you happen to carry a balance on any of your revolving credit.
    So, freeze those cards, making it difficult to use them willy-nilly — yet allowing you to make periodic small purchases which you pay off promptly. Do not allow any of your cards to be closed due to inactivity. That can work against you.




  • I saw someone leave an info under comment section on helping to repair credit. I was interested in knowing more and if the hacker still does this. I had poor credit, a old bankruptcy and problems with getting approved for a apartment due to 2 broken leases from the past which I explained to CREDIT BRAINIAC when I made contact to him. The hacker cleaned my credit records and boost my credit score within just few days of knowing him. Everyone having credit problems should reach him a t (@ g ma i l . com).


  • because my credit is bad already i was doing surveys i found out surveys credit cards i was being denied applying all the times it was going aginst me my credit now is more under averege more because i was doing surveys it was not because i was apply ing it was my info i was giving out to the surveys


  • Which one is better after bankruptcy having accounts included, showing closed or included in bankruptcy?


  • This is great information. I love it. Thank you.


  • My question is the biggest thing I have on my credit score is past student loans but I never finished the 2year program only one semester but they are still charging me for the entire tuition is that something they can do?


  • Just learned firsthand that applying for a credit card affects your credit for two years!


  • Filed bankruptcy was left with 1 active card ,have a fico score of 606 I need 660 to lease a do I raise it 54 points


  • Im with lexington, getting the removals, but my score is low and i havnt had a credit card. I want to get one and make payments to boost my score, but cant get accepted, and when they turn me down, it just makes my score even lower ……


  • Well, that is interesting! I never knew that “length of credit history” referred to each individual account. I always thought it meant that I’ve had a credit history since 1981 or whenever. Good to know. Thx.


  • I requested a free , 1 year, credit rpt. from Experian. They sent me someone else’ s credit report. My FICO is about 705. I requested and received a Wells Fargo Card. I DO NOT intend to use it. They only gave me a 2k limit. I hope this will increase my credit score as t may increase the amount I can borrow, not that i’m going to use it for that. My wife’scredit score is higher than mine as I co-made a student loan with him. It was settled but Sallie Mae continues to report a loss on my CR. How can I get this “loss” eliminated from my report.


  • Hi, long time ago I have 776 and now have 739. How I can have like 800-850? Thanks!


    • Hi Ana,

      It’s not unusual for your credit score to fluctuate by 40 points throughout the year. Things like opening a new account, carrying a larger balance on your cards, or missing a payment can all affect your score temporarily.

      If you are trying to increase your score to 800 or higher, you should start by checking out this helpful article :

      Check back in and keep us posted on how your score improves!



  • I have a 725 score with the same 4 credit accounts ive had for 2 yr newest 8 yr oldest. Only one has a 35% credit cap. balance, the rest are 0 balance. Total credit cap. with all 8500. How can i get my score to jump. I seem to only budge it no matter what i do. Should i take on a new credit line.


    • Hi Ben,

      Your credit score is calculated by 5 different factors, each weighted differently (read more here: Some ways to help raise a stagnant score are to keep your balances low (below 20% of your limit), and may want to ask your credit card providers to raise the limits on your accounts, if possible. If you only have one type of revolving credit, it may also be a good idea to add another one, such as an installment loan.

      The most important thing, as always, is to pay your full balance every month, on time. Look at your accounts and try to identify areas for improvement.



  • I have been following your blog for a while now. I opened my first credit card 2 yrs ago. I have seen my score go up ,but not enough to get a home loan. I have a car loan now through my credit union and my bills are always paid on time. So my question is should I get another card to help raise my score?


    • Hi Katie,

      Using credit cards can help raise your score if you pay the full balance every month and always pay on time. You really only want to charge items that you could pay for in cash, to avoid carrying a balance and paying the interest on it. There are numerous factors that contribute to your credit score, so you will want to figure out the best strategy for you. You can find out more about how your credit score is calculated here:



  • Someone told me that there is a program that gives consumers about 50 points if they sign up and agree not to be contacted by creditors that are offering new credit for the next 2 years. Have you heard of that? ??


    • Hi Stephanie,

      I have not heard of that particular program, but I would be wary of any offer like that that sound too good to be true. The truth is that the best way to raise your credit score is to get your debt under control, correct any errors and remove negative items, and make all of your future payments on time. There are some reputable programs, but many will end up costing you money and hurting your score even more.

      You can read more about some common “debt settlement” scams here to protect yourself:



  • Does this mean if you haven’t applied for new credit in the last five years, and you apply and receive a new credit card that your score will increase?

    New credit is 10% of score which equates to 10% x (850-300) = 550 x 10% = 50

    So will credit score increase by up to 50 points?


    • Hi Dana,

      As the article mentions, there are many factors that determine your credit score, so it an be hard to predict exactly how many points your score will rise or fall when you take on new credit.

      There are definitely ways that you can be savvy about credit and use it to your advantage, read more here:



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