Hard Inquiry?

[Anonymous]

Hi everyone!

Just some background information: I'm 22 and graduating this May. I got my first credit card (Discover It Student card with a $750 SL) in early February 2019 to start building credit. I use it pretty heavily for dining out and online shopping but always pay off my purchases as soon as they post. I never carry a balance, and my utilization is currently 9%. My FICO score jumped from the 600s to 730 over the last couple of months. 

I recently heard about the Uber Visa Credit Card and thought it was perfect for my spending habits. I applied for it yesterday and was approved. However, I got a notification from Credit Karma that a hard inquiry was made and that my credit score dropped to 716. I did some research and found that a hard inquiry will affect my credit score for about 12 months. Does this mean that even if I keep my utilization low and always pay off my balances, will my credit score not increase anymore until after the hard inquiry expires?

I'm still new to all of this and would greatly appreciate some guidance. Thank you so much!

[Anonymous]

Hard inquiries will play a role in your score for a short while but in a few weeks time that should subside. You will also receive a reduction in score from the opening of a new account and that will eventually be offset and cancelled out by good payment history and utilization.

Congrats on the new card. Use it wisely!

[hernaemm90]

First, I want to say congratulations on getting approved for the Uber Visa card. I personally have it and love the 4% cash back on dining.

Just an FYI, Credit Karma scores are NOT FICO Scores. Reading your post it seems like you think they are. Credit Karma provides Vantage Score 3, you should disregard that score. 

To get your actual FICO scores you can sign up with Experian to get your Experian FICO 8 score. 

Since you have a Discover card you can access your Transunion FICO score on the website or the app through the FICO scorecard. Barclays also gives you your Transunion FICO 8 score.

Unfortunately I don't know where to get an Equifax FICO score, I think the Citi double cash card give you an Equifax Bankcard FICO 8 but other than that I don't know. Maybe someone else here can tell you where to get one.

One more note, it takes 6 months to get a FICO score, you said you just got your card in February which was two months ago but I'll assume you have a student loan that is six months or older. If you don't have any other loans or accounts on your credit report and the Discover card is your first then you won't have an actual FICO score until a few more months. 

Hope this info was helpful.

[Anonymous]

Hi there, thank you both for your responses! I actually do know that Credit Karma scores aren't FICO scores, but because I received a notification from the app that my score dropped, I wanted to address it as soon as possible. I normally access my FICO score from my Discover app, but because my statement for this month hasn't been generated yet, I'm not too sure what my FICO score is now after I received the hard pull. I also apologize, I forgot to mention that I do have a student loan in my original post. 

One question, is it a good idea to know my scores from all three credit bureaus? I currently only have access to my Transunion score from Discover. I honestly had no clue that there were other FICO scores! 

Again, thank you so much for the advice! I really appreciate all the help. 

[Drwaz99]

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@Anonymous wrote:

One question, is it a good idea to know my scores from all three credit bureaus? I currently only have access to my Transunion score from Discover. I honestly had no clue that there were other FICO scores! 

Again, thank you so much for the advice! I really appreciate all the help. 

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I think it's a good idea to have a general sense of your scores at all times - just so you can be aware of any changes (positive and/or negative). Some people like to keep daily track of them, some weekly, some monthly or quarterly. It all just depends on your preference. One of the best ways to get your 3 bureau scores plus some additional EX fico scores (mortgage, auto, and bankcard scores) is through Experian Credit Works's $1 trial. Just make sure you downgrade to the "basic" (free) subscription before the 7 days is up (you can even do it immediately after starting your trial and you'll still have access for the entire trial period) so you don't get charged the regular monthly fee.  

[HeavenOhio]

Welcome, @Anonymous.

You're doing a great job handling your Discover card. You're getting use out of it, and you're keeping your reported utilization low. Most importantly, you're staying within your budget.

Besides the cards, what else is on your report? It caught my eye that your FICO score was in the 600s not that long ago. Usually, when one has a single card with low utilization, you'll see a score in the 700s like you have now.

Hard inquiries will result in a small ding on your FICO scores. On the inquiry's one-year anniversary, it will stop affecting your score. On or soon after its two-year anniversary, it'll drop off of your report. Decent scores like yours will absorb a reasonable amount of inquiries.

VantageScore isn't well tested because lenders don't use it, but I believe inquiries generally hit VantageScores a bit harder than FICO.

Credit Karma is great for alerts and reports. It's not good for scores. And don't trust the advice it gives you. (Get your advice here. )

You can get your three FICO 8 scores, your three reports, and some miscellaneous Experian FICO scores by signing up for the $1 Experian (Credit Check Total) trial. Cancel the service before the trial period has ended.

[Anonymous]

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@HeavenOhio wrote:

Welcome, @Anonymous.

You're doing a great job handling your Discover card. You're getting use out of it, and you're keeping your reported utilization low. Most importantly, you're staying within your budget.

Besides the cards, what else is on your report? It caught my eye that your FICO score was in the 600s not that long ago. Usually, when one has a single card with low utilization, you'll see a score in the 700s like you have now.

Hard inquiries will result in a small ding on your FICO scores. On the inquiry's one-year anniversary, it will stop affecting your score. On or soon after its two-year anniversary, it'll drop off of your report. Decent scores like yours will absorb a reasonable amount of inquiries.

VantageScore isn't well tested because lenders don't use it, but I believe inquiries generally hit VantageScores a bit harder than FICO.

Credit Karma is great for alerts and reports. It's not good for scores. And don't trust the advice it gives you. (Get your advice here. )

You can get your three FICO 8 scores, your three reports, and some miscellaneous Experian FICO scores by signing up for the $1 Experian (Credit Check Total) trial. Cancel the service before the trial period has ended.

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I'm not quite certain which report you're referring to, but from what I see from my March FICO report from Discover, it shows the following:

Total Accounts: 2 (1 student loan, 1 revolving credit)
Length of Credit: 3 years
Inquiries: 0 (but that's about to change)

Revolving Utilization: 9%

Missed Payments: 0

I hope that answered your question!  Also, I would have to disregard what I said about my score being in the 600s prior to getting a credit card. I got that score from CK, but now I know that those scores aren't very reliable! I'm also hoping that Discover automatically increases my CL this month. Considering how much I use my card, I have to keep paying off the balance every few days. It's difficult trying to keep my utilization low when my CL is only $750. 

And thank you so much for your advice! I tried signing up for the Experian trial earlier, but it was giving me issues. After finally getting a hold of a live agent after about an hour of dealing with the automated system, the person told me that I wasn't able to sign up because my address is located in a U.S territory and that I'd have to be within the 50 states. However, she did tell me that she'd still be able to mail me my report so that's great!

[Anonymous]

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@Anonymous wrote:

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I'm not quite certain which report you're referring to, but from what I see from my March FICO report from Discover, it shows the following:

Total Accounts: 2 (1 student loan, 1 revolving credit)
Length of Credit: 3 years
Inquiries: 0 (but that's about to change)

Revolving Utilization: 9%

Missed Payments: 0

I hope that answered your question!  Also, I would have to disregard what I said about my score being in the 600s prior to getting a credit card. I got that score from CK, but now I know that those scores aren't very reliable!

You're going to be fine. Your VantageScore 3 from CK will be low without any credit cards. I had a CK score on EQ of 641 on December 31, 2018 (no cards) and it's now at 734 after having 2 cards open for 3 months.

You will see a jump in score after both of your cards report their statement balances during the following months (assuming your length of credit history is exactly 3yrs or 36 months, with 1 card open for 2 months (Feb), 1 new card just opened (0 mos):

July: Age of Youngest Account (AoYA) (your Uber) reaching 3 months.

October: Possible....AoYA reaching 6 months. I only read about this one, not verified it personally yet.

April 2020: AoYA reaches 12 months. AAoA (Average Age of Accounts) at 2 years. This could be a really good gain in points.

These score gains have been reported by people with relatively young credit history. I just observed a 3 month AoYA 8 to 25 point gain myself, and my length of credit history is only 1 yr and 4 months.

Every time you get a new card, it resets that AoYA and you lose a bunch of points. Inquiries also cost me a lot more points than those with much longer credit history.