So I just opened up 3 credit cards to boost my credit. Now that cards are posted my credit score dropped 30 points. I’m currently at 41% utilization. I have two balances one for $124 and one for $618. I just paid $442 of those balances. Will my credit score return to its original score?
Welcome to the NerdWallet community, Chosen.
If nothing else changes, your score should rebound once those payments are reported (and assuming the balance stays much lower). Many credit experts recommend not going higher than 25-30%, and the best scores go to people with utilization under 10%.
Also, opening up 3 credit cards may have dinged your score a little. Every time you apply for a card, a hard inquiry is made on your credit report (you can see it there). However, in many cases the issuer checks just one score. So, from getting three cards, you might have three inquiries on one credit report and zero on another. Hard inquiries stay on your report for up to 2 years, but stop affecting your score after 6 months. So that, too, may have shaved a few points off your score.
But if you pay on time, keep balances low and avoid new credit applications for a while, you should see a rebound.
"Many credit experts recommend not going higher than 25-30%, "
I’m not a credit expert, but I can tell you this. The best credit scores do go to those who keep their utilization at 9% or lower is a FACT. Make two payments per month to accomplish this.
I tested it a few months ago allowing my utilization to increase to 21%. As a result my FICO dropped 9 points, from 763 to 754. After I paid in full I recovered the 9 points.
Keeping your utilization under 10% is the key to a higher FICO.