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

In general, your credit scores may temporarily drop after you’ve applied for a credit card. Your scores might drop after you’ve opened a new credit card account as well. But small changes in your scores are normal since the information in your credit reports is updated regularly. 

Keep in mind that credit scores rely on many factors. For example, they might be different depending on which credit-scoring company calculated them and which scoring model was used.

When you apply for a credit card, it usually involves a hard inquiry, also known as a hard credit check. That happens when a lender looks at your credit reports after you’ve applied for a new credit account. 

Hard credit checks typically impact your credit scores by lowering them on a temporary basis. 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.”

Opening a new credit card could impact a number of factors that determine credit scores.

Opening a card can lower the average age of all your accounts as well as the age of your newest account. 

According to Experian®, one of the three major credit bureaus, “The age of your credit accounts and length of your credit history can directly impact your credit scores.”

But it may help to know that a reduced average account age can impact people’s credit differently. 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.

Credit utilization ratio is a measure of how much credit a person is using versus how much they have available. It applies only to revolving credit accounts, such as credit cards.

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

The CFPB recommends keeping your credit utilization ratio below 30%.

Having a mix of revolving credit and installment loans, such as a mortgage or car loan, can show a person’s experience managing different types of credit. How opening a new credit card might affect your credit mix depends on the types of loans you already have.

Total debt and payment history are two more major credit-scoring factors. They’re largely determined by how you use your credit card after you open it. 

Ultimately, responsible credit card use is the key to achieving and maintaining good credit scores. Responsible use includes things like staying below your credit limit and making on-time payments.

There’s no way to ensure that your credit scores won’t be affected when you apply for a credit card. But there are things you can do to help prepare yourself and avoid unnecessary hard inquiries, including:

• Getting familiar with your credit profile. 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. Visit AnnualCreditReport.com for information on getting free copies of your credit reports from the three major credit bureaus. You can also use CreditWise from Capital One. It’s a free credit monitoring service that won’t impact your credit scores.
• Comparing credit cards. Doing some research to narrow your options to cards that best fit your credit profile, spending habits and financial goals can help you avoid submitting multiple applications, which could result in unnecessary credit checks. You can compare Capital One credit cards and search by the credit level, card type and rewards you’re interested in.
• Getting pre-approved for a card. With pre-approval, you can 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 don’t guarantee approval. But if they involve a soft credit check, they won’t affect your credit. 
• Only applying for the credit you need. Limiting your applications for new credit cards, especially in a short time frame, may help reduce the impact on your credit scores. 

If you still have questions about how your next credit card application could impact your credit, check out these frequently asked questions.

Applying for a credit card may lead to a temporary reduction 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. 

Already confident in your credit card research and ready to apply? Before you apply, see whether you’re pre-approved for a Capital One credit card with no impact on your credit scores.

New to credit or looking for your next credit card?

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

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

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