It’s best to apply for a credit card about once a year, assuming you need or want a card in the first place. And you shouldn’t apply for more than one card at the same time. If you apply more often, the repeated hard inquiries on your credit history will hurt your credit score. Creditors will also see you as desperate to borrow, making you a greater risk and less likely to be approved for a loan or line of credit.
What you should know before applying for a credit card:
How applying for a credit card affects your credit score: Every time you apply for a credit card (with only a few exceptions), the issuer will do a hard pull of your credit, which temporarily lowers your credit score. Normally, this isn’t a big deal, because your score will bounce back after a few months of responsible credit use (e.g. paying on time, low utilization, etc.).
However, hard pulls become problematic when there’s a bunch at the same time. The damage is more significant and lasts longer. And that can wind up costing you a lot of money if you need the best possible credit score in the near future.
Careful planning is important: This holds true in terms of both which card you apply for and when you apply. If you’re rejected for a card, one option is to wait until your credit score rebounds before trying again. And you can track your credit score for free on WalletHub. Alternatively, you could apply for a card with lower requirements.
Credit card options: People with limited or damaged credit may want to consider a secured credit card. They require you to make a security deposit that acts as your credit line. This collateral also gives secured cards the highest approval odds of all credit cards. As long as you can fund the deposit and make minimum payments, your chances are decent no matter what your credit score is.
If you’re not approved for a secured card, there are other ways to get your hands on credit. For instance, you can become an authorized user on someone else’s account or try to find a cosigner to apply with.
You should wait six months to one year between credit card applications. Applying for a credit card triggers hard inquiries which can lead to a slight dip in your credit score, especially when you apply repeatedly within a short period of time. And that’s a bad thing from a lender’s perspective. More importantly, applying in bulk tells lenders that you are desperate to borrow, which doesn’t bode well for your ability to pay.… read full answer
There is an exception though: if you have excellent credit, a high income and a record of on-time payments, you have a good chance of getting approved even if you apply more often. That’s because lenders see a low risk of you defaulting on future payments.
The fastest ways to improve your credit score are to pay down your balances, dispute incorrect information on your credit report, make more frequent payments, and reduce credit utilization. Credit utilization (how much of your credit limits you use each month) contributes to a portion of your credit score that accounts for 20% - 30% of your overall score. So, an adjustment there can result in a big credit boost pretty quickly. Similarly, you can dispute incorrect information with a quick online request or phone call. You won’t always get an immediate credit score increase, but correcting errors on your credit report is a great place to start.… read full answer
There are a few other ways to increase your credit score quickly, from becoming an authorized user to increasing your credit limit. They may not all be equally effective for everyone, as it can take years to build a consistently good or excellent credit score. In fact, some strategies could send your credit score in the wrong direction before leading to an increase. For example, requesting a credit limit increase can result in a hard inquiry that damages your credit a bit in the short-term, but having more credit available could produce long-term gains if used responsibly.
Here’s how to improve your credit score fast:
Pay down your balances. If you aren’t eligible for a credit limit increase, focus on paying down existing debt. Paying down a large chunk of debt at once will help your credit utilization ratio and bump up your score. If you can’t make a large payment all at once, try to pay more than just the minimum monthly amount. If you have multiple debts, start by making payments on the debt that has the highest interest rate so you can limit interest charges.
Dispute incorrect information on your credit report. You should file a dispute for any incorrect negative info on your report. Once the dispute goes through, incorrect items will drop off your file, and your score should improve. You may have to wait 30 days for the credit bureau to review your dispute before you see any changes.
Make more frequent payments. Credit utilization is calculated based on the statement balance on each of your credit cards. You can reduce these balances, thus decreasing your credit utilization and increasing your credit score, by making payments before the end of each billing period. Then, pay off the remaining balance by the due date to avoid interest charges and credit-score damage.
Become an authorized user. If you’re just starting out, or your credit report has a string of negative marks, a good move would be to become an authorized user on someone else’s credit card and build your credit over time. Just make sure the primary holder is responsible and pays their bills on time.
Add new payments to your credit file. There are new services that can add positive information, like on-time utility payments, rent payments, and positive bank balances to your credit report. Not all of these programs apply to all credit bureaus, and some cost money to utilize, but they could boost your credit score over a few months.
Increase your credit limit. A higher credit limit can reduce your credit utilization ratio, assuming your spending does not increase. The only potential problem is that asking for a credit limit increase usually results in a hard credit inquiry, which would temporarily hurt your credit score a bit. But if you get a credit limit increase without asking, or you have a few months before you need the highest credit score possible, a higher limit could definitely help.
Everyone’s credit situation is different, so not every option will be relevant or available to you. The best way to find out exactly what you can do to quickly improve your score is to check out the personalized advice in the Credit Analysis section of your WalletHub dashboard.
No, there is no rule against applying for multiple credit cards in one day. However, 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, it will result in a hard inquiry on your credit reports. And even though one hard inquiry may not have a huge impact, applying for 2 cards or more in a day could potentially bring a score down by several points.… read full answer
Depending on the content 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.
Things to Know Before Applying for Multiple Cards in One Day
Credit card applications result in a hard inquiry. 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.
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. This 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 credit card 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.
What to Do Before Applying for a Credit Card
Pick your credit applications wisely. 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.
Check for pre-approval. 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. Plus, it 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.
Keep tabs on your credit score. Make sure you know where you stand before applying for a credit card. You can check your credit score for free, right here on WalletHub.
Note that 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. You can also take advantage of the Island Approach and use two or three credit cards, based on your financial needs. More cards than that can complicate due dates but will allow you to mix-and-match more types of rewards, rates, and features. Setting up automatic payments can help you pay down your credit cards without missing a due date.
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