It seems like everything these days can hurt your credit score. You might be wondering if applying for a new credit card will lower your score, or if having too many cards will make you look desperate to lenders.

So what’s the deal? Can applying for a credit card hurt your credit score?

In this article, we will dive deep into the world of credit scores to answer this question once and for all. You might be surprised by what actually does and doesn’t affect your score.

So sit back, relax, and get ready to learn everything you need to know about credit scores.

Does Applying for a Credit Card Hurt Your Credit Score?

Applying for a new credit card will not cause your score to drop immediately. However, it will result in a hard inquiry on your credit report. This can cause your score to drop by a few points when the credit bureaus process the inquiry. But don’t worry, the effect is usually temporary and your score will rebound within a few months.

How Does Applying for a Credit Card Affect Your Credit Score?

When you apply for a new credit card, the issuer will do a hard inquiry on your credit report. This will result in a small drop in your score when the inquiry is processed by the credit bureaus. However, the effect is usually temporary and your score will rebound within a few months.

The bigger problem occurs if you are denied for the credit card. This will result in a hard inquiry on your credit report, as well as a negative mark that can stay on your report for up to seven years.

If you are denied for a credit card, it’s important to find out why so you can improve your chances of being approved in the future.

What Can Affect a Credit Score?

When it comes to credit scores, there is a lot of misinformation out there. It can be hard to figure out what actually affects your score and what doesn’t. So let’s set the record straight.

Below are the factors that can affect your credit score:

Your credit utilization ratio:

This is one of the most important factors in your credit score. It measures how much of your available credit you are using at any given time. The lower your credit utilization ratio, the better.

The length of your credit history:

This one is pretty self-explanatory. The longer you have been using credit, the better your score will be. However, even if you have a short credit history, you can still have a good score as long as the other factors are in your favor.

Your payment history:

Payment history is also another important factor that can affect your credit score. It measures how often you make your payments on time. The more consistent you are, the better your score will be.

Your credit mix:

This factor measures the different types of credit you have. For example, if you have a mix of both revolving and installment loans, it will be better for your score than if you just had one or the other.

Financing your car or having retail credit cards are both good ways to diversify your credit mix. But don’t start applying for loans just to get a better credit mix! That will actually have the opposite effect.

Credit inquiries:

Every time you apply for a new credit card or loan, it will show up as a credit inquiry on your report. Too many inquiries can actually hurt your score and cause it to drop significantly.

So if you are planning on applying for a new line of credit, make sure to space out your applications.

In many cases, the effects of the above factors won’t show up on your credit report for months. If you notice a recent drop in your score, it could be due to something that happened months ago.

What Doesn’t Affect Your Credit Score?

Now that we’ve gone over some of the factors that can affect your credit score, let’s talk about what doesn’t affect it.

Below are a few things that will not impact your score:

Your income:

Whether you make $30,000 a year or $300,000 a year, you’ll still fall within the same credit score range. Your income doesn’t have any bearing on your credit score.

Your age:

Although age doesn’t affect your credit score, it can still be a factor in whether or not you’re approved for a loan or credit card. Lenders often prefer to work with borrowers who are of a certain age, usually 25 or older.

Your employment status:

Similar to your income, your employment status doesn’t have any impact on your credit score. Whether you’re employed, unemployed, or self-employed, your score will be the same.

Race or ethnicity:

This is another one that doesn’t affect your credit score but can still be a factor in lending decisions. Lenders are not allowed to discriminate based on race or ethnicity, but it can still happen.

Now that you know what does and doesn’t affect your credit score, you can start working on building a good credit history. Remember to use your credit responsibly and always make your payments on time. If you do that, you’ll be well on your way to a great credit score.

Frequently Asked Questions

Below are some of the most frequently asked questions about applying for new credit cards and how they can affect your scores.

How long for your credit score to rebound after applying for a credit card?

It can take a few months for your credit score to rebound after applying for a credit card. The important thing is to use your credit responsibly and make your payments on time. Doing so will ensure a faster recovery and greater improvement in your scores.

How many new credit cards can you apply for before it starts to hurt your credit score?

Your score will get affected even after applying for a single credit card. However, you won’t see the impact on your score until the bureaus update their reports, which may be more than 30 days.

Does applying for a secured credit card hurt your credit?

You’re almost guaranteed approval when applying for a secured credit card, and they’re one of the best ways to rebuild your credit.

While opening a new account will result in a hard inquiry, which can temporarily lower your score, the long-term effects will be positive if you use the card responsibly.

The Bottom Line

Applying for a credit card will definitely have some impact on your credit score sooner or later.

But if you use your credit responsibly and make your payments on time, the effects of applying for a new credit card will eventually wear off and your score will rebound. Just remember to space out your applications and don’t open too many new accounts at once.

If you have any more questions about how credit scores work or what you can do to improve yours, feel free to ask in the comments below!