Does applying for a credit card hurt your credit?

When you apply for a new credit card, your credit scores might temporarily drop. Hard credit checks, which happen when lenders review a person’s credit history, are a big reason why. But there are strategies to help minimize the effects.

What you’ll learn:

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

• If you’re approved, a new card could affect other credit-scoring factors, such as credit age, credit utilization ratio and credit mix.

• Pre-approval can give you a better idea of how likely you are to get approved for a card.

• Comparing cards based on your credit profile can help you apply only for cards that are a good fit.

When you apply for a credit card, it usually involves a hard inquiry, also known as a hard credit check. Hard credit checks typically lower your credit scores temporarily. The Consumer Financial Protection Bureau (CFPB) explains: “These inquiries will impact your credit score because most credit-scoring models look at how recently and how frequently you apply for credit.”

A new credit card account could impact some factors that determine credit scores.

Consistent, on-time payments for your new credit card are crucial to building and maintaining positive credit scores. To stay organized and avoid missing payments, consider automatic payments or electronic reminders.

Generally, the higher the average age of your credit accounts, the better your credit scores. So getting a new card may lower your scores. The actual impact can vary depending on individual circumstances. 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.

Your credit utilization ratio is a measure of how much credit you’re using versus how much you have available. It applies only to revolving credit accounts, such as credit cards.

Establishing a new credit account makes your available credit go up, which could be a good thing. But your credit utilization ratio changes based on how your card is used. If you’re maxing out your credit card, it could hurt your scores. 

The CFPB recommends keeping your credit utilization below 30%.

Your credit mix is made up of the different types of credit accounts you have. It takes into account your revolving credit, like credit cards, personal lines of credit and home equity lines of credit, as well as your installment loans, like car loans, student loans and mortgages.

Your credit mix is important because it shows how much experience you have with handling different types of credit. Adding a credit card may make your credit mix more diverse. But keep in mind that a diverse credit mix won’t help your credit scores if you don’t use your credit responsibly.

Applying for a new credit card can cause your credit scores to temporarily drop because it triggers a hard inquiry. That may only have a small impact, but submitting multiple hard inquiries in a short time could have a more negative impact on your 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.

Limiting applications for new credit cards, especially in a short time frame, may help reduce the impact on your credit scores. Before you apply, there are a few other things you can do to prepare for and avoid unnecessary hard inquiries. They include:

• 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 and what cards you may be eligible for. 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 to monitor your credit. It’s free, and it won’t impact your credit scores.

• Comparing your credit card options. Doing some research to find cards that best fit your credit profile, spending habits and financial goals can help you avoid submitting multiple applications. You can compare Capital One credit cards and search by the credit level, card type and rewards you’re interested in.
• Seeing whether you’re pre-approved. Get a better idea of how likely you are to get approved for a card, typically without damaging your credit scores. Pre-approval and pre-qualification offers may not guarantee approval. But if they involve a soft credit check, they shouldn’t affect your credit scores.

Check out the answers to these frequently asked questions.

Applying for a credit card may lead to a temporary drop in your credit scores. But there are ways to prepare and avoid unnecessary inquiries. They include comparing credit cards, getting pre-approved, only applying for the credit you need and using your new card responsibly.

New to credit or looking for your next credit card?

• Check for pre-approval offers with no risk to your credit scores.

• Earn unlimited 1.5% cash back on every purchase, every day, with a Quicksilver card.

• Explore Capital One’s credit cards for building credit with responsible use.