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What Happens to Your Credit Score When You Open a New Credit Account?

If you're wondering why your credit score dipped a bit after opening a new credit account, you're not alone.

Let's break down what's happening in simple terms.‍

Why Did My Score Go Down a Bit?

When you open a new credit account, two main things can cause your score to drop slightly at first:

  • Credit Checks: Every time you apply for new credit, like a credit card or a loan, the lender checks your credit report. This check can make your score go down a little. Experian, a major credit bureau in the UK, explains this here.
  • Average Age of Your Credit Accounts: Adding a new account can lower the average age of all your credit accounts, which can affect your score. This idea is discussed in more detail in this NerdWallet UK article

‍Good News: It Gets Better!

This drop in your score is usually just temporary. After a few months, if you’re managing your new account well (like making payments on time), your score should bounce back and improve

‍In the Long Run

Over time, having a new account can actually be good for your credit score. If you use it wisely, it shows you can handle credit responsibly. The key is to keep your spending in check and pay your bills on time.‍

We’re Here to Help

At Wollit, we're all about helping you understand and improve your credit score. While we don’t directly control how opening an account affects your score, we’re here to guide you through the process and do all we can to help you build a brighter financial future.

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