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Does Applying For A Credit Card Hurt Your Credit? [ANSWERED]

Does Applying For A Credit Card Hurt Your Credit? [ANSWERED]

Most people have at least one credit card. This is an important part of building your credit score and history. But before you apply for a card, you need to carefully consider the potential results.

Most importantly, many people want to know how applying for a credit card will affect their credit score.

Applying for a credit card can cause a slight dip in your credit score, but this should be temporary. You should not avoid applying for a card just because of the potential drop.

Here's what you need to know about how applying for a credit card affects your credit score long and short term.

credit card payment

A Quick Overview

While it is true that some inquiries will affect your credit score, in most cases, when you apply for a credit card, the effect is minimal. Any impact you see will only be temporary. An inquiry simply notes that your credit history has been accessed.

Once your lender reviews your report, you will see that an inquiry has happened. The reporting agencies do not know if you were approved or declined. Therefore, if you get declined, it will not impact your credit score.

Credit Report Inquiry Types

You will see there are two different types of inquiries: "hard inquiries" and "soft inquiries." Applying for a credit card or loan will be a hard inquiry.

Other actions generally initiate a soft inquiry. This happens when companies send you promotional mail offering credit, or your lenders conduct periodic credit reviews. They can also occur when you check your own credit report or make use of services that monitor your credit.

These soft inquiries are not included when calculating your credit score. Therefore, having soft inquiries will not impact your score. If you can see the inquiries in your report, then this is because of applications you have completed for credit. These inquiries are considered "hard" and are part of your credit score calculations.

Also Read: Could Canceling A Credit Card Affect Your Credit Score?

How Does Applying for Credit Cards Affect Credit?

When applying for credit cards, companies check into your credit report during the approval process. As mentioned, your credit report will reflect this as a hard inquiry. This may result in an initial drop in your score, but individual applications for credit cards rarely have a substantial impact.

The effect of this fades quickly, in most cases. After twelve months, FICO excludes the inquiry from your score calculations. It will still appear on your report for two years, however.

Inquiries alone never are the reason an application is declined. The only time inquiries become problematic is when your credit score is on the border between classifications. Whatever was making your score ride the border will weigh heavier on the report than the inquiry.

How Much Will My Credit Score Go Down If I Apply for a Credit Card?

An inquiry doesn't have a set number of points assigned to it. The number of points assigned to an inquiry depends on your entire credit history. It particularly depends on your recent credit usage. If you have a stable and positive credit history, the effect of applying for another card is minimal.

Is It Bad to Apply for a Credit Card and Be Denied?

Whether you are approved or denied will not influence your credit score. Just remember that regardless of the result of the credit application, it will result in a hard inquiry.

When Should You Apply for Credit?

You shouldn't be scared to fill out a credit application, but you should have a healthy respect for when and what to apply for. Lenders will consider multiple applications to a variety of credit cards within a brief span of time, a sign of financial trouble. Your scores will reflect this risk.

This means if you will be making a large purchase on credit soon, you may want to wait to apply for any new accounts. After you have the credit you need for the purchase you intend to make, go ahead and apply for new credit cards. (Just be aware that your recent purchase or loan application may have affected your credit score as well.)

For reference, you do not want to apply for a credit card within six months before applying for a loan.

Related post: What Happens If You Don't Pay Your Credit Card?

How Often Can I Apply for a Credit Card Without Hurting My Credit?

As a general rule of thumb, you should wait a minimum of 90 days before applying for a new credit card. That being said, if you can wait six months, this would be even better.

Waiting between applying for credit cards does more than minimizing the impact of multiple hard inquiries on your score. It also prevents you from being denied due to the card issuer's restrictions.

As an example, Capital One will only approve one credit card application per person every six months. Another example is Chase. They will not approve you for a credit card if you have opened five within the past 24 months, regardless of the card issuer.

blonder woman card

How Will Your New Credit Card Affect Your Credit Score?

So, you applied for a new credit card and were approved. We already mentioned that you will notice a slight, temporary drop in your score from the hard inquiry. But what other impact will the new card have on your credit score?

The impact of the new card will depend on how you use it and your credit history. That being said, it can influence all five of the factors that contribute to your FICO score.

How a New Card Can Affect New Credit

Ten percent of your FICO score relates to your new applications for credit. This refers to the hard inquiries already mentioned.

The fact that hard inquiries only affect 10% of your credit score helps show why simply applying for a card has such a small impact on your score.

How a New Card Can Affect Payment History

The largest factor influencing your credit score is your payment history. It accounts for 35% of your score.

Importantly, a single missed payment can dramatically hurt this part of your score. This means that if you make on-time payments with your new credit card, you can boost your score. On the other hand, if you miss payments or are late, your score may drop.

How a New Card Can Affect Credit Utilization Ratio

Your credit utilization ratio influences 30% of your credit score. This compares the amount of credit you are using compared to the credit you have available. A lower score is better, and experts suggest keeping the ratio under 30%.

How your new card affects your credit utilization ratio depends entirely on how you use it. If you open a new card and keep a very low balance, your utilization should improve. After all, you will have a higher amount of credit available but only be using slightly more.

However, if you maintain a high balance and get close to your credit limit, this can hurt your credit utilization ratio. This comes from the fact that you would be using nearly all of the additional credit you just gained.

How a New Card Can Affect Credit History Length

Your credit history length accounts for 15% of your credit score. This is influenced by the average length of all your credit accounts, both credit cards, and loans. The longer your history, the better.

Because this is an average, opening a new credit card can temporarily lower your history. However, if you already have a very long credit history and a lot of older accounts, the effect may be negligible.

You can also think of this from a long-term perspective. In a few years (or decades), your "new" card will not be new anymore. At that point, it will improve your credit history length. This is one reason to apply for a new card if you have a limited credit history.

How a New Card Can Affect Credit Mix

Finally, 10% of your score depends on your credit mix. This refers to whether you have a combination of types of credit accounts. It will look at revolving credit, like credit cards, as well as installment loans, like student loans, auto loans, or mortgages.

Ideally, you want to have a combination of both types of credit. If you already have a healthy mix, then getting a credit card will not affect this part of your score.

However, if you previously only had installment loans, getting a credit card may give this part of your score a significant boost. Just remember that credit mix only affects 10% of your overall score.


When you apply for a credit card, there will be a hard inquiry on your credit report. This will temporarily drop your score, but it should be a minor dip. It will not affect your score for more than a year. Additionally, if you are approved for the new card, using it responsibly can boost your score by significantly more than any drop from the application. To maximize your credit score boost from a new card, make your payments on time and keep your balance low instead of approaching your credit limit.

Further Reading: How to Buy a Car with No Credit