Applying for a credit card does hurt your credit score, but your score should only drop a few points and rebound within 3-6 months if you use your card responsibly. The longest the application can possibly affect your score is 12 months. After that point, it will still be visible on your credit report for another year but will have no influence on your score.
Pretty much any time you apply for new credit, whether it’s a bank loan or a credit card, the lender does a hard inquiry into your credit history. The inquiry stays on your credit report for two years. But the more responsible you are with the card, the sooner your score will turn around. However, if there are numerous hard inquiries added to your report in a short period of time, the damage will be greater and last longer.
Even though applying for a credit card can hurt your credit score, that shouldn’t stop you from getting one. There are ways to minimize the damage and make sure that a temporarily hurt credit score doesn’t actually hurt your wallet.
How applying for a credit card affects your credit score:
- Applying for a credit card usually hurts the applicant’s credit score a bit, causing it to drop by a few points for 3-6 months.
- Each credit card application results in a hard credit inquiry, which can affect your credit score for 12 months and stay on your credit report for up to 2 years.
- The more hard inquiries there are within a short timeframe, the more your score will fall.
- The fewer credit accounts you have and the shorter your credit history is, the more a hard inquiry will affect your score.
- Applying for credit can hurt your score whether you get approved or denied.
- Temporary credit score damage from a credit card application does not have to cost you money. Just wait until your score recovers before using it again for something important – like applying for a mortgage or auto loan.
- Your credit score will recover faster from a credit card application if you pay all your bills on time and keep your balances well below your credit limits on your credit card accounts.
While applying for a credit card does hurt your credit score, it’s usually not enough of a drop to worry about. Using your new card responsibly should help your score recover quickly and then go higher than it was before. You just don’t want to apply for several new cards at once or risk a hard inquiry right before another important loan application.
You can see exactly how applying for a new credit card affects your credit score by signing up for a free WalletHub account and getting free daily credit score updates. You’ll also get personalized recommendations for the best credit cards to apply for.