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Topics addressed on April 11, 2012:
Inquiries can have small impact on credit scores
I haven’t had negative activity on my credit report for over two years, and my score was recently 674. I applied for a credit card, and they did three hard inquiries but did approve me. Then right after I got the card my credit score went down eight points to 666. I called the creditor and they said they would put in a dispute for me. Can three hard inquiries cause your credit score to go down eight points, even though I was approved?
Inquiries can have a negative impact on credit scores, although that impact is typically very small, as your experience shows.
It’s impossible to say just how much that impact will be for any person because that depends on each individual’s unique credit history.
An inquiry is simply a record that your credit report has been reviewed in response to an application for credit. Recent credit inquiries concern creditors because the inquiries may indicate you have added debt that doesn’t appear yet in your credit report.
If you’ve had problems paying your debts, the possibility of new debt indicates added lending risk. That potential risk is reflected in lower credit scores, at least for a short time.
In your case, that is exactly true. You opened a new account, which means you would be a higher risk to repay another new account should you seek one. That higher risk is reflected in your lower score.
Thanks for asking.
- The "Ask Experian" team