Credit score drop after getting credit card

turtletom100

Hi being working on my credit since the start of year and received a capital one credit card with a £200 limit then last month I got an aqua Card. Aqua 1st statement due 14th but will be paid and the capital one paid off in full. Yet my credit score has dropped by 200 points...... I have looked at the only other reason i am having an impact is because I have low credit allowed it will reflect on my cerdit score. Other than that nothing has changed on my credit report for it to effect my score especially so bad. Is this normal and will it shoot back up over the next 6 months?

Credit score was doing better without getting the credit cards to help boost my rating lol

Chappaz

When you apply for any type of credit, the lender carries out a hard search on your file. This is visible to all other lenders and they use it as part of their algorithms (i.e. too many searches may mean that you're desperate for credit and therefore high risk).

So a slight decline tends to always happen when you take new credit out. Although whilst the score is generally very inaccurate, 200 seems like quite a drop. But perhaps the hard search, along with the low card limit, could be combining factors.

Lenders generally don't like it when you have cards with low limits because it's a sign that other lenders don't trust you with a lot of credit yet, so they doubt why they should as well. But after a few months of positive use you can request a credit limit increase which should solve that problem.

So yes, in 6 months or so, you should be in a better position than you are now. It just takes time.

turtletom100

Chappaz wrote: »

When you apply for any type of credit, the lender carries out a hard search on your file. This is visible to all other lenders and they use it as part of their algorithms (i.e. too many searches may mean that you're desperate for credit and therefore high risk).

So a slight decline tends to always happen when you take new credit out. Although whilst the score is generally very inaccurate, 200 seems like quite a drop. But perhaps the hard search, along with the low card limit, could be combining factors.

Lenders generally don't like it when you have cards with low limits because it's a sign that other lenders don't trust you with a lot of credit yet, so they doubt why they should as well. But after a few months of positive use you can request a credit limit increase which should solve that problem.

So yes, in 6 months or so, you should be in a better position than you are now. It just takes time.

I was aware of the implications but 200 is quite a drop considering my score was only 592..... thats over a third loss but I was using the free experian trial (can see the report until the 19th March still) but the 2 changes are credit cards being added. And also having a low limit. I can't remember the wording exactly but along the lines of "because I have under a £1000 credit other lenders will be put off so it effects the score. I understand and hope that goes up then yes in 6 months I will be asking for a credit upgrade
Cheers for the reply and I don't see nothing suspicious so will just monitor the score over the next few months

PixelPound

Don't stress over the score, there will be a plethora of negative aspects added such as the average age of your accounts, the low limit, etc. The thing is you have a card that you can now show responsible money management etc. Which is important and will mean you can get better cards later.

StopIt

turtletom100 wrote: »

Hi being working on my credit since the start of year and received a capital one credit card with a £200 limit then last month I got an aqua Card. Aqua 1st statement due 14th but will be paid and the capital one paid off in full. Yet my credit score has dropped by 200 points...... I have looked at the only other reason i am having an impact is because I have low credit allowed it will reflect on my cerdit score. Other than that nothing has changed on my credit report for it to effect my score especially so bad. Is this normal and will it shoot back up over the next 6 months?

Credit score was doing better without getting the credit cards to help boost my rating lol

*Waits for ZX81 to appear*


Honestly, your score means nothing. Mine went down 30 Points on ClearScore this month, after going up by 60 last month. What's changed? Nothing, but don't tell them that.


Lenders don't see this made up entity, although they may make up their own score by looking at your history. Defaults, Late Payments, Arrangements to Pay, CCJs and Insolvency are the things lenders look for on the negative side, and good money management including responsible use of a Credit Card (Paid off in full after each Statement), Direct Debits and some utilities (Don't Tell GingerBob!) being paid on time on the positive side.


Apart from that, playing the CRA bingo (I use Noddle and ClearScore as the MSE Credit Club hates me and wont let me on, I think because Experian haven't realised I have a child yet as all other info is 100% correct) is fun. Watch your credit score go up and down like the Pepsi Max at Blackpool.

DCFC79

Yes your score went down but thats as far as it goes.

No 1 else can see it, just you get to see it.

As you have a credit card use it and pay it off in full every month and get a DD setup for it.

bumbleweed

turtletom100 wrote: »

I understand and hope that goes up then yes in 6 months I will be asking for a credit upgrade

Absolutely, having two hard searches in the last few months and a low available credit limit can knock it down a lot if you have no other history.
Asking for a credit limit increase is a bad move - it's decided very differently because again you look desperate for the credit. It should be avoided at all costs.
Try spending on one card rather than both so you will have a higher average utilisation, pay on time and you will get a credit limit increase quickly. Ask for one and they'll not only tell you no but might make you wait an extra few months too.
Building and maintaining credit scores can take years - don't fret!

Phantom04

Just checked my experian report this morning. Had to go outside and scream.....have calmed down now.
I am currently house hunting and over the last few months have been actively looking to increase my credit score, which was fair. I have one defaulted credit card which was paid off in full over 3 years ago, so i am aware that this is still dragging my score down. Apart from that no other adverse history.

So to improve my score, I have paid off a chunk of my existing Mint credit card ( which i never use) the credit limit is £300 and i now have a balance of £40 with a direct debit to pick up minimum monthly payments and took out a new card with a £1000 limit in January, i have not used this card and do not really need to.

This month my experian score has dropped to a poor score, down by 74 points!!! There is no mention of the mint or new credit card on my report, just some red flags stating that i do not have any ' revolving credit accounts'

I am seriously frustrated as earn a good salary, have a deposit for a house and so on. I know the score is not really relevant but being a good boy and taking advice on how to improve my score seems to have actually knocked me back!!

I will be asking Experian why my two credit cards are not appearing on my report.....

[Deleted User]

There is a secret about credit scores that no one knows.


But with regard to the two cards - are they reporting to the other CRAs?

Phantom04

I do not know if they are reporting on the other CRA's, i will need to check. My Mint card has always shown up on previous Experian reports and i know there can be a time delay before the card i took out in January may appear......

[Deleted User]

Check the others. Then blackout the credit scores from your reports.

You can choose between a good credit history or a lovely score. One will get you a mortgage, the other will get you jack.

Clear your card in full each month, don't miss payments and don't go overlimit.