Can Signing Up For New Credit Cards Hurt My Credit Score?

The short answer is yes, it can hurt your credit score. However, the effect signing up for a new credit card is usually a small dip in your credit score and almost always it is a temporary dip. This is because when you sign up for a credit card, banks usually do something called a “hard pull” which causes the dip to the credit score. This allows the bank or possible lender to investigate your credit history and see if you’ve been responsible with your payments, how much you use your credit cards, how many cards you have opened, and more. Whether or not you get approved for the credit card you applied for, the credit inquiry will be on your credit report for two years. After two years, credit inquiries get removed automatically in most cases.

Opening credit cards is a simple way to start building your credit. This is only true if you are responsible with your credit cards. Making sure your credit utilization is low, that is not maxing your card out monthly, and being on top of payments every month are two very important factors that play into your credit score. There are other factors like average credit history, credit inquiries, oldest account, etc.

If you get denied, you should first look at your credit history in more depth instead of just reapplying. Tools to access your credit history can be found for free online. Analyze your overall score, your recently opened cards within the last 24 months, how many cards you have overall, how often have you been signing up for cards, etc. See if you can piece together a picture to see where your weak spot(s) are. Many of the apps or website that shows you your credit history have indicators that tell you what areas of your credit profile needs work.

So yes, signing up for a credit card can dip your credit score temporarily but it is a necessary step to open doors to all the perks and benefits you can get. The negatives are only temporary, and the positives can greatly outweigh them. Just make sure you keep on top of your credit history and know your credit score before signing up for credit cards.