Why is My Credit Score Low after Getting a Credit Card

Be careful of your credit score and maintain it good by doing timely repayments, Just check reasons why credit score after getting a credit card…

Credit score of an individual is always linked with their various financial transactions they do in their day to day life. In such a case, if you have got a credit card then it will surely give an impact which can be on the positive side or at negative side. Having a new credit card will absolutely get your few points in credit card drop, as you start lending from the bank though your credit card.

Instead if you repay your credit card bills timely and try not to have any overdue amount then at the same time it will help you grow your credit card . In the long run, maintaining your transaction without any bonus or delay in payment will ensure you have a growing credit score.

Factors Affecting your Credit Score with a New credit card

To go in deeper with your credit card and having links with your credit score, you must ensure you understand these points written below. Each of these if not handled in a proper way, will surely try to drop your credit score.

Higher Balances

This is an one major impact on credit score, as you try to buy a product on EMI which does cost higher or utilize a major portion of your credit card. In this way you go through the repayment process for more months, in which your credit card does show that you have lent money from the banker. Until your full amount is repaid and your outstanding is still at zero, the credit score will be getting affected.

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As per expert if you use 30% of your credit card amount, then it will surely drop or affect your score. Which can only be retrieved once you have all balanced cleared.

Age of credit card

If in case you have very little age of using your credit card and that does not manage well, then it will throw an impact which will take little time to get your score back. Thus the age and type of credit card will make a direct impact to your score.

Benefits of having a New credit card

In case you have no financial transaction, then it will be hard to calculate your credit score. As you have not made any transaction that score can look for. Thus having a new credit card does help in below forms.

Good Track of Transaction

As you have got a credit card, and if that maintained in a better way. In case your payment history maintained in the best way that you repay your loans or EMI on time without any bonus under the transaction limit. These will create a new credit transaction history that would help to calculate your credit score.

More Credit Limit

In case you have been using the credit card in a better way. The bank or financial institute will try to increase your credit limit. This will give you more room in your credit line that will meet your needs.

Credit Loan

This is one case, if you have got a loan needs paid monthly but do not possess a credit card. In such a case, paying the loan EMI tingly and ensuring to close it without missing payment date. This will increase your credit score.

  1. Does a credit card affect your credit score?

    The credit score of an individual might affect for only a short time if you have rewarded with a credit card. These will be only for a short time and the future score will depend on your usage and maintaining your balance.

  2. Can I raise my credit score quickly?

    No, the credit score does not increase instantly, as it drops with you one wrong step in transaction. Basically a new score will start working after 18 months and maintaining it high will need time and it will all depend on your transaction made.

  3. Does the outstanding amount of credit card affect credit score?

    Yes, if the utilized amount is more than 30% of your total credit card amount. Then it will affect your credit score and maintaining it below that value will not disturb but rather try to increase your score.

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