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Question By
scratchingmyhead

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Why did my score drop over 100 points after I opened a new CC per the recomendations?
I've never missed a payment on anything. My score was 731. Credit Karma recommended that I increase my revolving credit activity so I opened a new CC with a $300 limit. Two weeks later my score drops to 622. My first payment isn't even due yet. three months ago I took out a $20K auto loan and my score only dropped about 10 points. What's going on?

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I can't believe it dropped that much either and now I am panicking because I just got a few cards issued to me and they are not on my credit reports yet or here on this site.   

Anyway,  do NOT cancel that card, you already took a hard pull for it AND lost points,... may as well keep it, it hurts to close accts too....  like above said,  you will benefit in a few months,  don't worry about it now.  Use your card, no more than 9% of your credit, wait will billing cycle ends but pay before due....   you should see the rewards  !!

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2 reasons

1) you added a hard inquiry to your report, and dropped average age of credit.  Both of these will not affect your score long and as long as you use the new credit wisely your score will be higher than before within a few months (depending on how many other lines of credit and what you have)

2) The "recomendations" by credit karma are advertizing, in no way should anyone blindly trust that doing what CK recomends is for their best interest.  This is how they make money to allow us the free to tool to monitor 2 of the three credit reporting agencies.

Reply by
scratchingmyhead

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Your answer makes sense put I still can't fathom why a $300 limit cc would drop my score over 100 points when a $20K auto loan only dropped it 10.

  Would I be better off just canceling the card since I don't need it anyway or would the impact still take time to wear off?

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Reply by
Nomadre

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DO NOT cancel the card. In a few months you will see it get better. Also did you possibly have some old credit fall off your report about the same time?

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