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The store clerk asks if you’d like to save extra on your entire purchase by applying for a credit card. And who doesn’t like to save? But before you make that choice, it’s important to know about a few things that could potentially affect your credit score—whether you’re at a store or applying directly with a bank.

1. Hard inquiries

A “hard inquiry” happens when you apply for new credit. It’s when the bank or lender looks at your credit file in order to decide if you’ll be approved. In many cases, an additional credit inquiry may not affect your score at all. If it does, a hard inquiry may take only a few points off your score.


Did you know?

A soft inquiry doesn’t affect your credit score and isn’t reported to lenders.


2. New accounts

About 15% of your credit score is determined by how long you’ve actually had credit. Adding a lot of new credit will bring the average age of your credit—and potentially your score—down.

3. Multiple applications

Applying for too many credit cards within a short period of time can have a negative impact on your credit. Not only could you see a drop in your score, but credit card companies might think your financial situation has changed. Apply for only what you need.

Keep in mind that not all inquiries are created equal. If you’ve ever received a credit card pre-qualification offer in the mail, it means a bank has made one of those “soft inquiries.” While it won’t affect your score, respond to the offer and you’ll trigger a hard inquiry. So apply wisely and know how your score could be affected.

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