Does Applying for a Credit Card Affect Your Credit Score?

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A man is holding a credit card by his phone and laptop.
A man is holding a credit card by his phone and laptop. (Image: Rostislav_Sedlacek/iStock/Getty Images)

Applying for a new credit card affects your credit score, but generally not by much. Inquiries fall into the “New Credit” category according to Fair Isaac, and new credit factors into about 10 percent of your FICO credit score. Each credit card inquiry usually will cost you less than five points off your credit score, though the impact can be more pronounced in certain cases.

Hard Inquiries

When you apply for credit, you authorize the lender to get a copy of your credit report. This hard inquiry is listed on the report for two years. However, they only figure into your credit score for 12 months. Businesses also are allowed to check that report without checking with your first, such as when they want a list of potential customers. This "soft" inquiry doesn't stay on the report. The only inquiries that have an impact on your credit score are those you initiate through applications.

Minor Decline

Fair Isaac reports that one application for a credit card or another form of credit takes less than five points off a person's credit score. The negative impact on the score occurs because it indicates a willingness to take on more debt. FICO scores range from 300 to 850. While creditors define "good" and "bad" credit scores differently, a score above 730 is generally considered good, while scores below 650 make it difficult to get credit cards at reasonable rates.

Additional Impact

Inquiries for a credit card can cost you more points if there are a lot of them. People with six credit inquiries or more on their credit report can be up to eight times more likely to declare bankruptcy than people with no inquiries, according to Fair Isaac. Having too many credit card inquiries can indicate a desperation for credit. Moreover, while you can seek multiple lenders for a home or auto loan and only have it count as a single inquiry, each credit card application counts as a separate inquiry.

When it Matters More

Credit history plays a major role in the impact an inquiry can have on the score. The negative effect of a credit card application increases if you have a short credit history and few accounts. The lack of other items on your credit report may give an inquiry more weight, although it’s still unlikely to be severe. The effect also can be more pronounced if you’re about to apply for a mortgage or auto loan, where a few points on a credit score can affect your interest rates.

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