Does applying for a credit card hurt your credit?

Summary

• Applying for a credit card may cause a small, temporary drop in your credit score.
• The drop is usually the result of a hard inquiry, which signals that you are seeking new credit.
• Most hard inquiries lower scores by a few points and affect scoring models for about 12 months.
• Responsible credit habits can help your score recover and continue to improve.

Applying for a credit card may lower your credit score. The impact is usually minor — often just a few points — and temporary, but it's still something to consider before you apply. A small dip might not matter if your credit is strong, but it could carry more weight if you're close to a credit score threshold or planning to take out a loan.

Knowing what changes to expect, and how long they may last, can help you decide if a new card is the right move. Let's look at the impact of credit card applications on your credit so you can make choices that align with your broader financial goals.

How applying for a credit card may hurt your credit

When you apply for a credit card, the provider reviews your credit report. That review is called a "hard inquiry" — an action that often leads to a small decrease in your credit score.

The size of the impact depends on several factors, including your credit history. The next sections explain how hard inquiries affect your credit score and how long they remain on your credit report.

How do hard inquiries affect your credit?

The credit score modeling company FICO® says a hard inquiry typically lowers a credit score between five and 10 points,¹ with most scores dropping by less than five points.² VantageScore®, another score modeling company, reports a similar impact.³

Hard inquiries may cause a drop in your score because they signal that you're actively seeking new credit. That activity introduces uncertainty for card providers because they don't know how you'll manage a new account. Scoring models reflect that risk by applying a small, temporary reduction to your score.

Risk also helps explain why a large number of hard inquiries in a short period can have a greater impact. Several credit card applications may suggest you're taking on more credit at once, which may cause concern for lenders.

You may be able to limit the impact of hard inquiries by checking for cards that offer pre-approval. Pre-approval typically involves a "soft inquiry," which does not affect your credit score.

How long do hard inquiries stay on your credit report?

Hard inquiries can stay on your credit report for up to two years.¹ However, their impact diminishes over time. According to FICO, scoring models only consider hard inquiries made in the last 12 months when calculating your score.¹

Knowing this can help you time a credit application. Applying when you have no big credit decisions on the horizon may let your score recover before new inquiries.

How to improve your credit score after applying for a credit card

Applying for a card usually causes only a brief dip in your score, and the impact may be even smaller if you manage your credit responsibly. Here are a few steps you can take to improve your credit score after you apply:

• Make on-time payments every month to build a positive payment history.
• Keep balances low to reduce your credit utilization ratio.
• Avoid additional credit applications to limit new inquiries.
• Keep older accounts open to maintain the length of your credit history.
• Monitor your credit report to confirm that the information is accurate.

With responsible use and a little time, your new card can become a tool for strengthening your credit profile.

Plan before you apply

A new credit card comes with both benefits and tradeoffs. Understanding how an application affects your credit score helps you plan for the impact and make a choice that fits your circumstances.