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Don’t Let Black Friday Darken Your FICO Score

Rev up your wallet! The holiday shopping season kicks off this Friday after Thanksgiving, and retailers hope to attract us with big sales events and special operating hours so we’ll buy, buy, buy.


In addition, many retailers will work hard to persuade you to open new credit card accounts. They may offer sweet enticements such as an extra 10% discount on all purchases you make that day – or they might give you a special gift just for applying.


It’s easy to get caught up, as retailers make applying for store credit so convenient and easy.  Just give the sales clerk your name and address, and within seconds you’ll know if you’ve been approved for instant credit at your fingertips.


Unfortunately, many of us don’t understand that applying for credit can have a negative impact on our credit score.  The retailer uses your personal identification to check your credit report and FICO Score while you wait at the register.  This data helps the store decide if your request for credit will be approved, and under what terms.  That check, called a credit inquiry, will be posted to your credit report and may drop your FICO Score, which can reduce your future access to more attractive credit terms and features.


If you’re approved, how does that newly opened credit account impact your score?  It could also result in a drop; that’s because new accounts change your length of credit history by reducing the average age of your credit accounts.  Statistics show that people with newer credit accounts pose higher credit risk than people who have a longer credit history, holding all else constant.


And if you apply for and open three or four new retail cards in one day? The impact on your score could be substantial.


Results will vary depending on your credit profile, as well as the number of new retail store cards you apply for and open.  To size up the potential impact, get your current FICO Score.  You can then use the official FICO Score Simulator to gauge the potential impact if you open a new retail credit card. You can even specify different credit line amounts to see how that might change your score.


At the end of the day, that 10% savings on a day’s worth of purchases may end up costing you more than you think.



Tom Quinn is the Vice President of Business Development for myFICO, and has over 20 years of experience working with consumers, regulators and lenders and consumers regarding credit related questions and initiatives. 

About Tom Quinn

Tom Quinn is the Vice President of Business Development for myFICO and has over 20 years of experience working with consumers, regulators and lenders and regarding credit related questions and initiatives.


  1. […] Be cautious if opening new retail credit cards. It can certainly be tempting to open a new store credit card, especially with some of the enticing offers they dangle around the holidays. But applying for  a new line of credit — known as an inquiry — can actually lower your score, especially if you apply for and open up more than one. A 15% savings on one big purchase may not be worth a significant ding on your FICO Score, especially if you plan to apply for a loan in the New Year. Learn more about how opening new retail cards affects your score. […]

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