How long does a new credit card hurt your credit score?

JohnTravoltage

I'm looking to get a new credit card (don't have any in my name at the moment - only add-ons on spouse's cards) but as we're coming up for a remortgage later this year (in the fall), I'm a bit wary of the hit a new credit card may cause on my credit score. 

If I were to apply now, how long would the impact of the new credit last on my credit score? And how many months of satisfactory payment of the credit card bills (intending to pay it in full each month) will it take to boost the credit score?

MorningcoffeeIV

Could be permanent. But that doesn't matter, as the score isn't a factor in lending. It's only there for your own amusement.

The benefit of starting to build your own credit history will be immediate.

JohnTravoltage

Thanks @MorningcoffeeIV

So as far as the mortgage application in 7-8 months from now is concerned, I'm better off going ahead with the credit card now (fairly certain I will be accepted)?

MorningcoffeeIV

Yes. Just use it wisely, clearing in full each month.

CliveOfIndia

JohnTravoltage said:

Thanks @MorningcoffeeIV

So as far as the mortgage application in 7-8 months from now is concerned, I'm better off going ahead with the credit card now (fairly certain I will be accepted)?

Yes.  It's always advised not to take out a new credit product in the run-up to a mortgage application (nothing to do with the meaningless score).  But if you're anticipating a mortgage application in 7 or 8 months then it won't hurt.  And a few months of using and repaying the card in full every month will have a beneficial effect on your credit history (which is what really counts).  You're basically demonstrating that you are using credit responsibly, borrowing within your means and always repaying what you owe.

JohnTravoltage

Thanks @CliveOfIndia

the remortgage is in 7-8 months but we're considering applying as early as 2-3 months from now given the volatility with mortgage rates. If rates fall in the summer, we'll change to a different product/lender to take advantage. 

So if our earliest mortgage application may be in a couple of months, would it still be safe to get a new credit card now? 

MattMattMattUK

JohnTravoltage said:

I'm looking to get a new credit card (don't have any in my name at the moment - only add-ons on spouse's cards) but as we're coming up for a remortgage later this year (in the fall), I'm a bit wary of the hit a new credit card may cause on my credit score. 

If I were to apply now, how long would the impact of the new credit last on my credit score? And how many months of satisfactory payment of the credit card bills (intending to pay it in full each month) will it take to boost the credit score?

Just for clarity, are you in the USA? you have said "in the fall", which is not a term normally used by people in the UK. Credit ratings are totally meaningless in the UK, as well as most of Europe and much of the rest of the world, but in the USA credit ratings are actually a real thing that impact lending, they operate entirely differently to the rest of the world. 

CliveOfIndia

JohnTravoltage said:

So if our earliest mortgage application may be in a couple of months, would it still be safe to get a new credit card now? 

Ah, now, that's a tricky one.  Off the top of my head, I'd be tempted to say don't take out a new card in this scenario.  A mortgage lender (well, any lender) takes a number of things into account when assessing your application.  Key things are fairly obvious - your income, how much you're looking to borrow, how much existing debt you've currently got.  But your available credit is also a factor.  You could, in theory, get your mortgage in place, then go out and run up your credit card to the max, meaning you're now struggling to meet all your financial obligations.  So a lender has to factor in this possibility.

Each lender will have different internal scoring criteria (internal scoring being totally different to the meaningless score the CRAs give you !).  So it's impossible for anyone to know just how much of an issue a new card would be for any particular lender.

But on balance, I'd probably advise holding off on the card until the mortgage - and completion - are done and dusted.  Better safe than sorry.  If your spouse already has a card and you are an additional cardholder, is there any desperate rush for you to get your own card?

And don't get the mortgage agreed in principle, then go out and get a card.  Most mortgage lenders will run a second credit check just before releasing the funds - any change in credit circumstances compared to when you made the application has the potential to make them very jittery.

JohnTravoltage

Good catch @MattMattMattUK! I'm in the UK but have lived in the US for many years and have Americanisms (and American spelling!) popping up on occasion

So all of the questions and overall situation are based on a credit evaluation for a mortgage application in the UK

JohnTravoltage

 If your spouse already has a card and you are an additional cardholder, is there any desperate rush for you to get your own card?

My spouse's card has a great referral offer on at the moment, so we were thinking this could be an opportunity for me to get a card and also take advantage of the offer.

But from your assessment, it looks like it may not be worth the risk 

AnnikaJuarez

Getting a new credit card does have an initial impact on your credit score, mainly because of the hard inquiry lenders make on your credit report when you apply. However, if you manage the new credit card wisely—like paying off the full balance every month—this can actually help improve your credit score over time. Since you mentioned you're planning for a remortgage later in the year, applying for a new credit card now gives you a window to mitigate the initial dip with positive credit actions.