Does applying for a credit card hurt your credit score?

does applying for a credit card hurt your credit score

How much applying for a credit card will affect your credit depends on a few different factors. If you are applying for a single card, you may not see your score drop too much after you complete your application. However, if you apply for multiple cards within a short period of time, you may see your score negatively affected quite a bit. 

If you are thinking about applying for a new credit card, it might be wise to take a pause and consider how it might impact your credit score. Throughout the United States, there are over 1,102 million credit cards in circulation!1 Your personal credit is the cornerstone of your financial security, and damaging it unintentionally could limit future opportunities available to you. Your credit health is tantamount to your overall financial situation.

So, does applying for a credit card hurt your credit score? To know the answer to that question, it’s a good idea to better understand what information is included on credit reports and how your credit score is calculated using that information. 

Various Aspects of Applying for Credit Cards and Impact on Credit 

Aspect DescriptionImpact on Credit
Annual FeesSome credit cards charge a yearly fee for card ownership. Neutral. However, not paying the fee can result in late fees and negative marks on your credit. 
Rewards & BonusesMany cards offer rewards like cash back, miles, or points for purchases.Positive. Can lead to benefits without impacting credit, as long as balances are paid in full. 
Introductory APRSome cards offer a 0% interest rate for a set period after opening. Neutral. But carrying a balance after the period ends can lead to high interest and debt. 
Cash Advance Allows you to withdraw cash using your line of credit, typically with a fee. Negative. Often comes with high fees and interest rates, leading to higher debt. 
Foreign Transaction Fees Fees charged for making purchases outside your home country. Neutral. But not paying off these fees can result in negative marks on your credit. 
Credit Limit IncreasesOver time, issuers may offer to increase your credit limit. Positive. Can improve credit utilization ratio if you don’t increase your spending. 
Secured vs. Unsecured CardsSecured cards require a deposit, while unsecured cards don’t.Neutral. Both can build credit if used responsibly. Secured cards can help those with no/low credit. 
Retail Store Cards Credit cards specific to retailers, often with special deals or rewards for that store. Mixed. Can benefit with store-specific rewards but often come with higher interest rates.
Card Upgrade/Downgrade Options Some issuers allow you to upgrade to a better card or downgrade to a simpler one without a new application. Neutral. Allows flexibility without a new credit inquiry. 

Credit Information Included in Your Credit Report

Three major credit bureaus compile credit reports used by lenders to determine approval or denial of a credit application. Most every lender and credit card issuer reports your account information to at least one credit bureau. Your credit history is constantly updated to make your credit file as accurate as possible. 

The credit information included in a credit report can be divided into four different categories:

Personal Identifying Information

The PII section of your credit report includes information to connect you to your file, like your name, address, date of birth, Social Security number, and employment information gathered from your previous credit applications. This information is not used by lenders to determine your eligibility for credit or to calculate your credit score.

Credit Account Information

When lenders report a new credit card account or a new loan, all the information about the accounts will show up in this section of your credit report. Account information includes the type of account (i.e., credit cards, mortgages, car loans, online payday loans, student loans), the date the account was opened, the credit limit or loan amount, account balances, and your history of payments. 

Credit Inquiries

Each time you complete a new credit card application, you authorize the lender to pull a copy of your report, which creates a hard inquiry on this section of your report. This part of your personal credit is why credit card applications have an impact on your credit score even if an account is not opened.

Public Records and Collections

To complete your credit report, each of the credit bureaus obtains all public records from state and county courts pertaining to bankruptcy filings. In addition to public records, this section contains all collection accounts opened to handle debt you’ve defaulted on. 

How a Credit Score is Calculated

Your Credit score is calculated based on all the information provided in your credit profile. Credit scores are far more varied than credit reports as there are so many credit scoring services. But most of them calculate your credit score using a similar breakdown of how much each section of information in your report will impact your score. 

These are typically the multiple factors that affect your credit score in order of importance:

Payment History – 35%

Payment history is the most impactful factor in calculating credit scores. It covers all the payments you’ve made on all your credit accounts in your entire credit history. Late payments and missed payments will hurt your credit, while paying on time helps build credit. 

Credit Debt Owed – 30%

Your total credit owed compared to how much available credit remaining is your credit utilization rate which is an important factor in determining your credit score. You want your credit utilization ratio to be as low as possible so you don’t have a disproportionate amount of debt compared to your total available credit.

Credit History – 15%

The credit history portion of your credit score calculation considers how long your credit accounts have been established, including the age of your oldest, newest, and average account. Having a more established credit history is helpful for a good score. 

New Credit – 10%

All your credit inquiries and the opening of new accounts will be included here. Filling out multiple applications and opening too many new accounts within a short period of time could represent a greater risk to lenders, so it negatively affects your credit score.

Credit Mix – 10%

Credit mix considers the variety of account types you have on your credit profile. It’s good to have a healthy mix without too many in only one category. Account types can include credit cards, installment loans, retail accounts, home loans, and student loans. 

Hard Inquiry vs. Soft Inquiry

Every time anyone runs a credit check, it will create a single inquiry. All hard inquiries and soft inquiries show up on your credit report. But not all inquiries hold the same weight in a credit check, and not all of them will negatively impact your credit score. 

A soft inquiry will appear on your credit report when someone runs a credit check for reasons unrelated to a direct application for credit. Soft inquiries can result from a lender or credit card issuer checking your credit profile for pre-approval on lending services. Checking your own credit report will appear as a soft inquiry as well. 

Soft inquiries don’t affect your credit score and do not qualify as a risk factor when lenders check your credit profile. Hard inquiries have the most significant impact on your credit score as they only occur with legitimate credit card applications. A hard inquiry affects your credit score, whether your credit card application is approved or denied.

How Hard Inquiries Impact Credit 

Too many hard inquiries within a short period of time flag you as a higher-risk borrower to a lender checking your credit profile. Applying for a credit card a few too many times only to be denied could cause a drop in your credit score. 

Even if you are successful in each credit card application you make, opening too many credit card accounts at once could cause a temporary plunge in your credit score. A general rule to follow when it comes to hard inquiries is to avoid them until necessary, i.e., only apply for new credit when you absolutely need to. 

How Long Does a Hard Inquiry Remain on Your Credit Profile?

A hard inquiry can stay on your credit profile for up to two years. However, they typically affect credit for only a year. How long and how much hard inquiries negatively impact your credit score depends on the unique circumstances of your credit history and how many credit card applications you completed.

How To Build Your Credit History

The good news is that a drop in your credit score because of a credit card application is usually a temporary setback that you can bounce back from easily. We have some specific advice for you about how you can build your credit history back up after too many hard inquiries.

You can work your way up to a high credit score by consistently following this specific advice for how to manage a credit card wisely:

Check Your Credit Regularly

Get in the habit of regularly checking your various credit scores and credit reports. You can get a free copy of your credit report once a year, but you can check out your score through calculating services as often as you like. 

By monitoring your credit with consistency, you can catch errors and mistakes that are bringing your score down right away and rectify them. Remaining up to date with the state of your credit score will help you understand what other factors could be contributing to a dip in your score.

Use a Secured Credit Card

If you want to build upon your history of credit but don’t have a solid score to qualify you for a traditional credit card, you could apply for a secured credit card. A credit card that is secured could offer you guaranteed approval as long as you have the cash to cover the credit limits. 

A secured credit card affects your history of credit with each billing cycle, allowing you to improve your credit score with each payment until you are able to qualify for a regular credit card. 

On-time Payments

Late payments on your credit card bills will consistently harm your score. The best thing you can do to recover from a temporary drop in your credit score is to pay your bills on time to have an impeccable history of payments. 

Your payment history holds the greatest weight in calculating your credit score, so continuously paying your credit cards on time is the most helpful action you can take to improve your score.

Only Apply for Credit When Necessary

The number one rule for avoiding unnecessary inquiries on your credit profile is only applying for a new credit card when you need it. Don’t take on more credit unless you know you are ready to take on new debt and have a credit score good enough to be approved. Utilize pre-approval services to your advantage to be more sure about your qualification before applying for a credit card or loan. 

It is crucial to keep in mind that when you are applying for a new credit card, you are agreeing to take on increased total credit limits, which means you will have significantly more available credit. A higher credit limit requires increased responsibility to ensure you do not fall into a debt trap. Handling the new debt taken on irresponsibly will just result in further damage to your credit score. 

FAQ: Credit and Applying for Credit Cards

What are the benefits of having more than one line of credit?

Having multiple credit cards can offer a range of benefits, including diversifying rewards and benefits, providing backup in case one card is compromised, and potentially improving your credit utilization ratio. However, it’s essential to manage them responsibly to avoid potential pitfalls.

How do credit card issuers determine my eligibility for a card?

Credit card issuers typically look at your credit, income, employment status, and debt-to-income ratio. They may also consider your history of making on-time payments, the number of open accounts, and the type of credit accounts you have.

Is it a good idea to close old credit cards when I get new credit?

Closing old credit cards can decrease your available credit and increase your credit utilization ratio, which might negatively impact your credit. It’s often recommended to keep old accounts open, especially if they have a long history, to maintain a positive credit history.

How can I use a credit card responsibly?

Using a line of credit responsibly involves paying the full balance on time every month, not maxing out your credit limit, regularly checking for unauthorized transactions, and understanding the card’s terms and fees, including credit card processing fees. It’s also wise to avoid making impulsive purchases and to have a budget in place.

What’s the difference between a primary cardholder and an authorized user?

A primary cardholder is the individual who applies for the line of credit and is responsible for paying the bills. An authorized user is someone added to the account by the primary cardholder. They can use the card but aren’t legally responsible for the debt.

How can I increase my chances of approval when applying for new credit?

Before applying for new credit, ensure your credit is accurate, pay down existing debts, avoid applying for multiple credit cards in a short span, and consider pre-qualification offers which can give you an idea of your approval odds without a hard credit check.

How do balance transfers affect my credit score?

Balance transfers can temporarily impact your credit due to the hard inquiry from the new credit card issuer. However, if used wisely, they can help you pay down debt faster and improve your credit utilization ratio in the long run.

Is it better to have a single line of credit with a high limit or more than one credit card with smaller limits?

Both scenarios have pros and cons. A single card with a high limit can be easier to manage, but multiple credit cards can offer diverse rewards and benefits. The key is to maintain a low credit utilization ratio across all cards and pay off balances in full each month.

How often should I check my credit report after getting a new credit card?

It’s advisable to check your credit at least annually. After getting a new credit card, you might want to check within a few months to ensure the account is reported correctly and there are no unauthorized inquiries or accounts.

What should I do if I’m denied a credit card?

If denied, credit issuers are required to provide a reason. Review the reason, check your credit for inaccuracies, and consider improving the areas that led to the denial before reapplying. It’s also beneficial to wait a few months before applying again to avoid multiple hard inquiries in a short period.

A Word From CreditNinja About Credit Cards and Your Credit 

The bottom line is that while other factors impact your credit more, applying for too many credit cards too close together can hurt your credit score. The lender checking your score will always view too many inquiries as a credit risk. This is why every CreditNinja suggests only applying for a line of credit when you need it and are sure you have a score good enough for lender approval. If you would like a loan instead of a line of credit, consider a personal loan from CreditNinja! CreditNinja offers industry wide competitive rates, which means you may be able to get a lower rate than you would with some credit cards or other bad credit loans. Head over to the easy online application to see if you qualify today! 


  1. Number of credit cards in use in the United States 2013-2028
  2. Does Getting Denied for a Credit Card Hurt Your Score? | Capital One
  3. Does Applying for Credit Cards Hurt Your Credit? – Experian
  4. Does Applying for a Credit Card Hurt Your Credit Score? | Discover
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