Does applying for a credit card hurt your credit score?

There’s no rule against applying for multiple credit cards in one day, but doing so may hurt your credit standing as well as your chances of approval for a new credit card account. Each time you apply for a credit card, the credit card company does a hard pull, or inquiry, on at least one of your credit reports. For most people, one hard inquiry will cause a credit-score decrease of less than 5 points—not a huge impact. But even applying for 2 cards in a day could potentially bring a score down by 10 points or more. Depending on the content of the rest of your credit report, the negative impact could multiply with more hard pulls. That could mean the difference between good and fair credit, for example, or fair and bad credit. If you’re planning to apply for a mortgage or other major loan anytime soon, having a lower credit score could cost you a lot of money, too.… read full answer

A hard pull can affect a credit score for up to a year, and will drop off a report completely in 2 years. Even though the effect is temporary, it’s worth considering whether or not your score can afford that kind of drop for a year. In other words, do you need your score for anything important during that time?

If you apply for more than one card in a day, it's possible that some or all of these applications will be approved. That too would have an effect on your credit standing. A few new lines of credit will increase your total available credit, lower your overall credit utilization, and decrease the average age of your credit. The first two are good for a credit score but could quickly turn bad if you misuse your new credit. The third could also have a negative impact. A cluster of new credit lines could look like you’re desperately trying to borrow, which could be a sign of budding financial problems, making you look riskier to potential lenders.

If you’re applying for multiple cards at the same time to increase your odds of one approval before a hard pull hits your score, reconsider this approach. It will only hurt your score in the long run. If you don’t get approved for the first card you apply for, there are always lower-tier offers to consider, including credit cards with no credit check.

A good rule of thumb is to pick your credit applications wisely – measure twice and cut once, so to speak. Do some research to find the best credit cards for your needs, and choose the cards with the best approval odds based on your circumstances. Many credit card issuers let prospective customers check for pre-approval through the company’s website. Pre-approval results in a “soft pull” on your credit, with no score damage, and provides a good sense of your likelihood of approval before you apply for real. That way, you’re not wasting hard pulls on a credit card you have no chance of getting.

At the end of the day, it’s best to apply for no more than one or two credit cards per year. This allows your credit score to recover from each hard inquiry and lets you get accustomed to managing a new account. That said, people who can manage their card usage responsibly will benefit from gradually building a collection of multiple credit cards. With 2 or 3 cards, for example, you can take the Island Approach with your expenses. More cards than that can complicate due dates but will allow you to mix-and-match more types of rewards, rates and features. And be smart: set up automatic payments.