Does applying for a credit card hurt your credit?

When you apply for a new credit card, your credit scores might temporarily drop. But if you’re approved and use your new card responsibly, having it could ultimately improve your scores. 

What you’ll learn:

• New credit card applications typically result in a hard credit inquiry, which may temporarily lower your credit scores. 

• Aside from new credit applications, applying and opening a credit card could affect other credit-scoring factors: payment history, credit utilization, credit age and credit mix.

• Multiple hard inquiries in a short time span could have a greater effect on your scores than a single inquiry.

• Checking whether you’re pre-approved before you apply for a card can help limit unnecessary hard inquiries.

Applying for a new credit card can cause credit scores to temporarily drop because it triggers a hard inquiry, also known as a hard credit check. 

Hard credit checks happen when credit card issuers review a person’s credit history to assess the risk of approving their application. The Consumer Financial Protection Bureau (CFPB) says “inquiries will impact your credit score because most credit-scoring models look at how recently and how frequently you apply for credit.”

When you apply for a new credit card and trigger a hard credit check, your credit scores could drop by a few points—sometimes less than five—according to credit-scorer FICO®. 

But as FICO explains, exactly how much your credit scores drop can depend on other factors in your credit reports. For example, someone with a strong credit history may not be as affected as someone who’s working to establish credit for the first time.

While a single hard inquiry may only have a small impact, submitting multiple hard inquiries in a short time could have a more negative impact on credit scores. 

“If you apply for a lot of credit over a short period of time, it may appear to lenders that you are dealing with financial setbacks,” the CFPB says.

Even though applying for a credit card could cause your credit scores to drop slightly, opening a new credit card could help your scores if you use it responsibly.

That’s because a new credit card account could impact some important credit-scoring factors. For example, consistent, on-time payments can help you build a positive payment history. And a credit card may make your credit mix more diverse. Plus, your new credit account would make your available credit go up, which could help you lower your credit utilization ratio if your spending remains consistent.

A credit card application denial typically won’t affect your credit scores on its own. But any hard inquiries from the application process could.

Before you apply for a credit card, there are a few things you can do to prepare for and potentially avoid unnecessary hard inquiries. They include:

• Limiting applications for new credit cards: Avoiding multiple credit card applications, especially in a short time frame, may help reduce the impact on your credit scores. 

• Getting to know your credit profile: You can check your credit scores and reports before applying for a credit card to better understand your credit situation. AnnualCreditReport.com has information on getting free copies of your credit reports from the three major credit bureaus. You can also use CreditWise from Capital One. It’s free, and using it won’t impact your credit scores.

• Seeing whether you’re pre-approved: Pre-approval tools can give you a better idea of how likely you are to get approved for a card. If they involve a soft credit inquiry, like at Capital One, checking whether you’re pre-approved shouldn’t affect your credit scores. If you decide to accept the offer, it may involve a hard inquiry, though.

Applying for a credit card may lead to a temporary drop in your credit scores. But the drop may be minor, depending on your credit history. Plus, if you’re approved, having a new credit card can help you build your credit scores if you use it responsibly.

New to credit or looking for your next credit card? Check whether you’re pre-approved with no risk to your credit scores.