Opening a new credit account can cause a temporary dip in your credit score due to:
- A hard credit check (inquiry) by the lender.
- A reduction in the average age of your credit accounts.
- Potential increase in credit utilisation.
Over time, responsible use of the new account, such as paying bills on time and keeping balances low, can help improve your score.
Best practices:
- We recommend using between 10% and 70% of your credit limit at any time (this is known as your credit usage), and spreading it evenly across all your cards.
- Avoid multiple applications close together.
- Maintain a mix of credit types (e.g. credit card + personal loan).
If your credit report contains errors, you can dispute them with illion NZ.
Note: This information is for general guidance only and isn’t financial advice. Always consider your own circumstances or seek independent advice if you’re unsure about what’s right for you.