Does Applying for Multiple Credit Cards Hurt Your Credit Score?

You’d be shocked at how many people simply don’t understand how credit scores are calculated.  There are many factors involved, but by understanding a few of the basics, you can essentially game the system and ensure you are always in a solid standing credit-wise and able to obtain financing, approval, or the go-ahead on any situation in which you need to use your credit.  Today I’ll talk about a topic most people have many questions about, and that’s how applying for multiple credit cards can hurt your credit score.Enter your text here…

The Effect on Your Credit of Applying for Multiple Cards in a Short Time Frame

applying for multiple credit cards

As a quick opening statement, I’ll go on record that one credit inquiry won’t do much to your score, but doing many of them in a short time period can give your score a serious kick backwards that could effect a lender’s decision to approve your credit application.  

The reason suggests that you could be more of a risk in comparison to someone who applies for credit less often.  If there are many applications out there, there is a red flag raised about why so much credit is needed.

This can be a nuisance when you are trying to build up credit and raise your score, something my old man taught me to do very well.  The best way to get your credit history built up is to establish it by getting a credit card and to use it very smartly.

First off, to state the obvious, you need to apply for a card.

If you desire or require more than one credit card, you need to space out the time frame in which you applied for these cards.

Prior to Applying for a Credit Card

Think about these factors:

  • No matter if you are approved, or rejected, it won’t have an effect on your credit score.  This is why it’s important to be sure that you will qualify for the card you are applying for prior to applying.  When you apply and get rejected, all you do is hurt your overall credit score, so why bother if there is a chance of rejection?
  • The impact on your credit score due to applying for credit will vary.  If you have a solid credit history with a high credit score (some people can get to 900), as well as a good history of paying on time, you’ll lose less points in comparison to someone who has a lower score and a less stellar payment history.
  • When you lose points on your credit score due to credit applications, you are likely to get the points back within about six months.  When you have a purchase such as a home, or vehicle, in mind, it’s wise to not apply for any further credit inside the six month window or until that application is fully completed and approved.

Related:  What is a perfect credit score?

There are many credit score simulators out there that echo what I’m laying out here, and if you run your credit scenario through them, you will see what I mean.  I recently had four applications for credit (as you may or may not know, I’m a points whore and jumped all over some offers, including Delta, American Airlines, and Marriott Bonvoy) and it knocked my score down over 60 points!  However, those applications are now four months behind me, and when I ran the simulator to get them in my rear view, the score returned to where it was, so I should be back there in a couple more months.

Why Does Applying for Credit Hurt Your Score?

credit cards

In short, it provides the notion of you being more of a risk.  If your credit history is short or you hardly have any open accounts, the risk is even greater in the eyes of a lender.  People go off of history and volume, think of it in that manner.

A tiny part of the equation is related to how recently you reached out for credit.

There are two types of credit inquiries:

  1. Credit Inquiry:  this is a review of your credit profile.
  2. Hard Inquiry:  only this type of inquiry will have an impact on your score.  This will happen any time you apply for a loan or credit card and it will remain on your report for two calendar years.  However, the impact on your score will only last about six months, but it will remain on your credit bureau report.

Statistically speaking, a new application can represent more risk for the card issuer. The impact is greatest if you have just a few accounts or a short credit history.

Avoiding Common Credit Mistakes

Keep in mind that your score is used as a gauge to see how trustworthy you are and what risk you will be to a lender if you borrow money.  If you have erratic behavior when it comes to repaying loans or credit cards, this will be reflected in your score.  Much like you have a record on file when you are in high school, your credit report will be the same barometer of your ability and desire to repay debt.

Myth:  checking your credit score will NOT hurt your score.  I check my score monthly, and it’s a very wise thing to do so in order to see how your creditors view you and also it allows you to monitor identity theft.

If anyone has questions about this topic, please feel free to ask them in the comments section below!  

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Tim Schmidt


Tim Schmidt is an Entrepreneur who has covered retirement investing since 2012. He started this website to share his expertise in using his Self-Directed IRA. Most recently he's been advising individuals to diversify into precious metals ahead of a certain recession. He invested with Goldco.