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Last update: January 5, 2024

8 minutes read

Does Applying for a Credit Card Hurt Your Credit Score: Learn the Truth

Find out how applying for a credit card impacts your credit score, understand key factors, and learn how to keep your financial health strong.

By Brian Flaherty, B.A. Economics

Edited by Rachel Lauren, B.A. in Business and Political Economy

Wondering how applying for a credit card affects your credit score? With credit scores playing a big role in our financial lives, it's crucial to understand what kind of impact this action could have. In short, yes, applying for a credit card can temporarily hurt your credit score, but don't worry just yet. By the end of this blog post, we'll dive deeper into how much of an impact this has and the bigger financial picture you need to consider.

Key takeaways

  • Applying for a new credit card can temporarily affect your credit score
  • The effect of a hard credit inquiry is usually small and temporary
  • The two most crucial factors influencing your credit score are payment history and credit utilization ratio - managing these properly could boost your score

    Does applying for a credit card hurt my credit score?

    The short answer is yes, applying for a credit card can temporarily hurt your credit score. But it's not as bad as it sounds. This effect is typically small and can be outweighed by responsible credit usage.

    What happens to my credit score when I apply for a new credit card?

    First off, when you apply for a new credit card, the bank performs a hard credit inquiry. A hard inquiry, which is when your credit report is checked, always slightly affects your credit score. Its impact is small if it’s just one inquiry, but it definitely exists. However, having lots of credit inquiries in a short period of time may have a bigger impact.

    • A single hard inquiry may nudge your FICO score down
    • The more credit cards you apply for within a short timeframe, the bigger the impact
    • This effect gradually fades over time

    Opening a new credit card can have other effects too. It influences 3 factors within your FICO score calculation: credit mix, credit utilization, and the length of credit history. These make up 10%, 30%, and 15% of your score, respectively.

    • Credit mix: Refers to how many credit lines you have, across different types of debt (like auto, mortgage, personal loan, etc)
    • Credit utilization: Refers to the percentage of your total credit limit that you're using, across all your credit lines.
    • Length of credit history: This looks at the age of your oldest account, your newest account, and an average of all your accounts' ages. Typically, a longer credit history is better for your credit.

    How can a new credit card influence my credit utilization ratio?

    Here's some good news. The 2 most crucial factors affecting your credit score are your payment history and credit utilization ratio. They account for 65% of your FICO score. Interestingly enough, a new credit card could actually help improve your credit utilization ratio, which makes up 30% of your overall FICO score.

    Here's how:

    • Your credit utilization ratio calculates your total outstanding credit card debt against your total available credit
    • The lower this ratio, the better for your credit score
    • Applying for a new card increases your total available credit, thereby reducing your credit utilization ratio if your spending habits remain consistent. A lower credit utilization is good for your credit score.

    Consider this scenario: you have a credit card with a limit of $10,000 and a current balance of $2,000. With these numbers, your credit utilization ratio is 20%.

    If you apply for a new card and get approved for another $10,000 credit line, your new total credit limit is $20,000, and your usage ratio drops from 20% to 10% ($2,000/$20,000). By simply doubling your available credit and maintaining your existing spending habits, you can effectively halve your credit utilization ratio!

    What about my credit mix?

    The last variable in your credit score is your credit mix, accounting for 10% of your score. This looks at the diversity of your credit history – essentially, how many different types of credit accounts you've managed responsibly.

    • Having a variety of credit types (credit cards, mortgages, student loans, etc.) contributes positively to your credit mix
    • If you don't already have a credit card, getting one will affect this factor positively, further countering the negatives of opening a new account

    Is it bad to open a new credit card?

    Applying for a new credit card isn’t a bad move, even though it might seem worrying at first. Yes, your credit score might take a tiny, temporary hit. But if you're responsible with your new credit, this move could boost your overall credit health. Consider exploring our list of top-notch credit card offers for a start.

    So, does applying for a credit card hurt your credit score? In the short term, yes, but in the long run, smart money habits can strengthen your credit profile. It's all about balance, responsible usage, and a keen understanding of how credit works. Remember, good habits lead to good credit.

    Last year, I knew I wanted another credit card in my wallet. When I applied for the new card, my credit score took a small hit. But when I was approved, my total credit limit jumped, which caused my credit utilization ratio to fall and my credit score to improve.

    Take it from me - sometimes, you have to take a small step back in order to take a big leap forward.

    Do’s and don'ts of applying for a new credit card

    Applying for a new credit card can be intimidating, especially considering the impact it could have on your credit score. But, with the right approach, you can reduce the potential drawbacks and boost your credit profile. Let's outline crucial do’s and don'ts in the table below:


    • Understand your credit profile

    • Use the new card responsibly

    • Maintain low credit utilization

    • Diversify your credit mix


    • Apply frequently

    • Max out your new card

    • Ignore your payment history

    • Open multiple new accounts at once

    How credit card applications affect credit scores: data digest

    Understanding the statistics related to credit card applications and credit scores can help put things in perspective for you. Let's look at these facts in the table below:

    Facts & Figures

    • Average FICO score in the U.S.

    • Percentage impact of payment history

    • Percentage impact of credit utilization

    • Percentage impact of new credit

    • General impact of a hard inquiry

    Descriptive Statistics

    • 718

    • 35%

    • 30%

    • 10%

    • 5-10 points

    Advantages and disadvantages of applying for a new credit card

    When considering getting a new credit card, the pros and cons can significantly sway your decision. By understanding these, you can make an informed decision.

    Advantages of applying for a new credit card

    • Boost to credit utilization ratio: More available credit can mean a lower credit utilization ratio, provided your spending habits remain unchanged. This can have a positive impact on your credit score.
    • Increased credit mix: If a credit card is a new addition to your credit portfolio, it could improve your credit mix, boosting your overall score.
    • Access to new perks & rewards: New credit cards often come loaded with perks, rewards, or introductory offers, enabling you to make the most of your spending.

    Disadvantages of applying for a new credit card

    • Short-term credit score impact: The immediate impact on your credit score, although typically small and temporary, is something to be ready for.
    • Potential for increased spending: The temptation of additional credit could lead to overspending, which can damage your credit score and financial health.
    • Longer credit history may suffer: Your length of credit history could take a hit, as opening a new account reduces the age of your latest account.

    How TuitionHero can help you

    At TuitionHero, we're all about teaching you about money, especially when it comes to private student loans, student loan refinancing, scholarships, FAFSA help, and, of course, credit cards. If you're a student or parent and you’re feeling nervous about getting a new credit card, relax! We're here to help you at every turn.

    We offer lots of support on managing your credit wisely. This means understanding how getting a new credit card affects your score, how to keep your credit use low, and how to use different tools to improve your credit.

    When you team up with us, you're getting expert advice on your journey to better financial health, making that new credit card less scary and more empowering.

    Final thoughts

    As you continue to learn about credit, keep in mind that while the very short-term effects of applying for a new credit card might not look great, you can very quickly raise and even boost your score with factors that have a stronger impact on your credit, like credit utilization and credit mix.

    Just remember to be smart with your credit, understand your financial situation, and make informed decisions. If you ever need more help with your finances, we at TuitionHero are always here to help.

    Frequently asked questions (FAQ)

    While applying for multiple credit cards within a short period isn't inherently bad, it may raise red flags to potential lenders. They might see you as a higher risk, which can affect your credit score. It's always good to spread out your credit card applications and only apply for what you need.

    Before applying for a new credit card, we advise you to check if you're likely to get approved. This way, you avoid unnecessary hard inquiries. Some credit card issuers offer a soft inquiry pre-approval, giving you a sense of your odds without a hard hit on your score.

    Yes! Applying for a new credit card can positively affect your credit score in the long run, especially if you maintain responsible credit habits. This includes timely payments, low credit utilization, and maintaining a healthy mix of credit. Our team at TuitionHero can walk you through the steps for establishing responsible financial habits here.

    A hard inquiry can stay on your credit report for about two years. However, its impact on your credit score decreases over time. Usually, the effect fades after a year, even if the inquiry still shows up on your report.



    Brian Flaherty avatar

    Brian is a graduate of the University of Virginia where he earned a B.A. in Economics. After graduation, Brian spent four years working working at a wealth management firm advising high-net-worth investors and institutions. During his time there, he passed the rigorous Series 65 exam and rose to a high-level strategy position.


    Rachel Lauren avatar

    Rachel Lauren is the co-founder and COO of Debbie, a tech startup that offers an app to help people pay off their credit card debt for good through rewards and behavioral psychology. She was previously a venture capital investor at BDMI, as well as an equity research analyst at Credit Suisse.

    At TuitionHero, we're not just passionate about our work - we take immense pride in it. Our dedicated team of writers diligently follows strict editorial standards, ensuring that every piece of content we publish is accurate, current, and highly valuable. We don't just strive for quality; we aim for excellence.

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