MoneyLife

Why Is My Credit Score Low After Getting A Credit Card?

By Jacinta Sherris

Asking yourself why is my credit score low after getting a credit card? It’s not unheard of for your credit score to dip after getting a new credit card. Although this short term hit stings a bit, the long term benefits of responsible borrowing can dramatically improve your credit. 

We’ll go over why your credit score may have went down after opening a new credit card. We’ll also review some lending options that won’t bring down your credit. Start scrolling!

Does getting approved for a credit card raise your score

Getting approved for a credit card won’t raise your score right off the bat. In fact, it’s not uncommon for your credit score to have gone down after opening a new credit card. If this is the case, you could find yourself wondering why is my credit score low after getting a credit card?

The primary reason your credit score went down is because the credit card company likely made a hard pull on your credit. Essentially, when you submit an application, most lenders will check your credit history. Lenders want to discourage people from applying for too many loans or credit cards all at once. Which is why hard pulls on your credit can bring down your score.

This phenomena isn’t only limited to new credit cards, but can also happen when you apply for a personal loan or mortgage. The good news is that this is oftentimes temporary and short-lived – especially if you continue to be responsible with your credit. 

How long does a new credit card affect score?

Normally, a hard pull from a new credit card can stay on your credit report for about 2 years. However, it shouldn’t affect your credit score for more than a year. This is typically true if you make consistent, timely payments on your credit card. If your payments are frequently late or if you fall behind, you can count on your credit score being negatively affected. 

Should I open a new credit card?

If you’re looking for ways to boost your credit, opening more credit cards isn’t your only option. Americans carry on average $6,194 in credit card debt, which, coupled with high APRs can become incredibly expensive. If you’re looking to avoid the high fees and costly debt associated with credit cards, know that there’s a safer, cheaper way to boost your credit score

It’s called a Credit Builder Loan and it’s designed to be entirely affordable and effective and MoneyLion won’t conduct a hard pull on your credit.1 

Revamp your score with a Credit Builder Loan 

MoneyLion’s Credit Builder Loan can be a better alternative to credit cards when it comes to boosting your score and getting extra cash in your hands. Here’s what MoneyLion’s Credit Builder Loan offers that you won’t get from another credit card. 

No hard credit pull

Unlike applying for credit cards or a personal loan, there’s no hard pull required to secure MoneyLion’s Credit Builder Loan. As a result, your score won’t suffer from a short term slip. 

Same-day funding

Once your account has been approved, you’ll receive a portion of your loan funds the very same-day. You’ll be able to access more of your loan amount as you make consistent, timely payments. 

Interest-earning reserves 

The remainder of your loan amount that you’ve been approved for but haven’t received, will be kept in a credit reserve account under your name. This way, you’ll build healthy saving habits, earn interest on your balance, and improve your credit score!

24/7 Credit monitoring

MoneyLion is serious about helping you improve your credit score. Which is why you’ll be able to stay on top of your score and view key factors affecting your score at any time. 

0% APR cash advance supplement 

When you sign up for a Credit Builder Plus membership, you’ll automatically get access to Instacash, MoneyLion’s 0% APR cash advance feature. You can get up to $250 into your bank account instantly. You can use these funds to boost your spending power.

Establish credit with all 3 bureaus

With a Credit Builder Loan from MoneyLion, your loan is broken up into several manageable payments set over 12 months. MoneyLion will report your information to all 3 major credit bureaus every month and when you make on-time payments, you should see an increase in score. 

It’s a way to boost your credit score, and it can really work! More than half of Credit Builder Plus members raise their score by 42 points or more within 60 days.2

Track Progress

A MoneyLion membership comes with progress tracking tools that send you personalized credit-building insights and tips. You’ll also be able to access Financial Heartbeat, a state-of-the-art tool that can help you improve how you budget, save, and manage your overall financial wellness.  

Boost your finances with MoneyLion

Once you’ve paid off your Credit Builder loan, the interest earned on your Credit Builder reserve account will be automatically deposited into your very own MoneyLion investment account.3 MoneyLion’s investment account offers fully managed portfolios and auto investing, for a flat fee of only $1/month. 

MoneyLion’s Credit Builder Plus membership is available for only $19.99/month and Credit Builder Loans always come with competitive APRs, which can be a far cry from the high interest rates credit cards charge. 

Get Started With Credit Builder Plus Membership

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Build your credit and save

Join Credit Builder Plus to get a loan up to $1,000, credit monitoring, exclusive rewards, access to 0% APR cash advances, and more. Over half of members raise their credit over 60 points within 60 days!

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