How an Amazon Credit Card Can Affect Your Credit Score

Like any credit card, an Amazon card can influence your credit score. The impact depends on how you apply for and manage the account, affecting everything from inquiries to payment history.

1. The Application Inquiry: When you apply, the card issuer performs a hard inquiry on your credit report. This can cause a small, temporary dip in your score that typically rebounds within a few months.
2. Average Age of Accounts: Opening a new card lowers the average age of your credit history. A shorter credit history can be viewed as a higher risk, which may slightly reduce your score, especially in the short term.
3. Credit Utilization Ratio: The new card increases your total available credit. By keeping your balance low relative to this new, higher limit, you can lower your overall credit utilization ratio, which can positively impact your score.
4. Payment History: This is the most significant factor. Consistently paying your bill on time builds a positive payment history and improves your score over the long run. Conversely, late or missed payments will damage it.

How Much Will an Amazon Credit Card Affect Your Credit Score?

Several factors determine how an Amazon credit card might impact your credit score. Here are the key things to consider before you apply.

• Hard Inquiry: Applying for the card triggers a hard inquiry on your credit report. This can cause a temporary, minor dip in your credit score for a short period.
• Credit Utilization Ratio: The new credit line increases your total available credit, potentially lowering your credit utilization ratio. A lower ratio is generally favorable for your credit score.
• Payment History: Consistently making on-time payments helps build a positive payment history, boosting your score over time. Conversely, late payments will damage your credit significantly.

How You Can Avoid an Amazon Credit Card Affecting Your Credit Score

Make Timely Payments

The most critical factor is paying your bill on time, every time. Late payments are reported to credit bureaus and can significantly damage your score. Consider setting up automatic payments to ensure you never miss a due date and maintain a positive payment history.

Watch Your Credit Utilization

Aim to keep your balance low compared to your total credit limit. A high credit utilization ratio can signal financial risk to lenders and negatively impact your score. Keeping this ratio below 30% is a widely recommended guideline for maintaining good credit health.

Limit New Credit Inquiries

Each credit card application triggers a hard inquiry on your report, which can cause a temporary dip in your score. To protect your credit, avoid applying for multiple credit lines in a short period, as the small impacts can add up over time.

Ways to Improve Your Credit Score

Improving your credit score takes time and consistent effort, but it is always possible to boost your numbers. Whether you have a FICO® score or VantageScore, there are several proven methods to improve your creditworthiness and maintain a healthy financial profile.

• Monitor your credit reports. Regularly check your reports from Experian, TransUnion, and Equifax to spot inaccuracies, detect potential identity theft, and track your progress.
• Set up automatic bill payments. Since payment history is the most important factor in your score, automating payments ensures you never miss a due date.
• Lower your credit utilization ratio. Aim to keep your credit utilization below 30% by paying down balances or requesting a credit limit increase.
• Become an authorized user. You can be added to someone else’s credit card account to benefit from their positive payment history and low utilization.
• Diversify your credit mix. Lenders like to see that you can responsibly manage different types of credit, such as installment loans and revolving credit cards.
• Limit hard inquiries. Avoid applying for too much new credit at once, and use prequalification tools to shop for rates without impacting your score.

The Bottom Line

Like any credit card, an Amazon card impacts your score through the initial hard inquiry, ongoing credit utilization, and your payment history. Responsible use can help build credit over time.

Frequently Asked Questions

Does applying for an Amazon credit card hurt my credit score?

Yes, applying for any credit card, including Amazon's, results in a hard inquiry on your credit report, which can temporarily dip your score slightly.

Can an Amazon card help build my credit?

It can. Making on-time payments and keeping your balance low demonstrates responsible credit use, which can help improve your credit score over time.

What happens if I close my Amazon credit card account?

Closing the account can negatively affect your score by reducing your overall available credit and increasing your credit utilization ratio, a key scoring factor.