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Does Applying for a Credit Card Hurt Credit?

Sometimes, applying for credit cards can be a little too easy. Here’s how this can impact your credit.

Justin Cupler

Contributing Writer at Tally

April 12, 2022

Credit can be difficult to understand, given all the variables that come into play. However, having a firm understanding can help you manage your personal finances.

With credit cards being so accessible online, it’s easy to fill out dozens of new credit card applications quickly. But does applying for a credit card hurt credit? 

Below, we outline what happens when a credit card company pulls your credit and how it can impact your credit score.

So, does applying for a credit card hurt credit?

In short, yes, applying for a credit card can lower your FICO credit score. When applying for a new credit card account, the credit card issuer performs a hard credit inquiry. This allows the credit card company to view your credit profile and determine if you qualify for the card.

Hard credit inquiries or hard pulls are part of your FICO Score calculation's “new credit” factor. The “new credit” factor accounts for 10% of your score. The more hard credit inquiries you have, the more of a negative impact on your credit score.

Hard inquiries stay on your credit report for two years, but FICO only uses them in its credit scoring model for 12 months.

What other credit inquiries can impact your credit score?

Credit card company inquiries aren’t the only inquiries that can impact your credit score. Here are some other types of credit inquiries that could cause your FICO Score to drop.

Lines of credit

A line of credit gives you access to cash you can use for various reasons, including:

  • Home improvement

  • Debt repayment

  • Business operating expenses

When applying for a line of credit, the lender performs a credit check, leaving a hard credit inquiry on your credit report and potentially lowering your credit score.

Installment loans

Installment loans, such as personal loans, debt consolidation loans and auto loans, also generally require a hard credit inquiry. This credit inquiry will continue to affect your FICO credit score for 12 months after the lender performs it.


Mortgage applications generally require a hard credit inquiry. They sometimes require multiple inquiries. 

The first credit inquiry will be for the prequalification, though this can sometimes be a soft inquiry, and the second is for the pre-approval. There could even be a third credit check around the time you finally close on the house to verify nothing has changed.

Retail accounts

Retail accounts — sometimes called store credit cards — are credit accounts issued for use at one store. For example, an Amazon card you can only use at These are easy to confuse with branded credit cards, a card with the retail store’s name but a Visa, Mastercard, Discover, or American Express logo on it, too, meaning you can use it anywhere credit cards are accepted.

These retail accounts will also require a hard credit inquiry, lowering your credit score.

What credit inquiries won’t impact your credit score?

While there are plenty of credit inquiries that may lower your credit score, there are also plenty that won’t impact you.


When you move into a new home, utility companies will often pull your credit to determine if you must submit a deposit or not. Generally, these are soft inquiries and have no impact on your credit score.

Certain loan pre-approvals

In some cases, lenders will give you a loan pre-approval with estimated interest rates and payments based on only a soft credit inquiry. These won’t impact your credit score. You can usually tell the pre-approval will be a soft inquiry because the lender advertises it won’t affect your credit score.


Car insurance

Car insurance companies use your credit history to determine premiums in many states.These credit inquiries are always soft pulls, so they won’t impact your credit score.

Identity verification

In some cases, companies simply want to verify you are who you say you are and will perform a soft credit inquiry. Generally, these companies will only ask for basic information, such as your address and the last four digits of your Social Security number.

These inquiries will never impact your credit score.

Checking your own credit

You can check your own credit in many ways: 

  • Pull your credit from the three credit bureaus — Experian, TransUnion and Equifax

  • Get a free credit report once  a year from all three bureaus at

  • Check your credit report for free any time at any of the free credit score sites, including Credit Karma or Credit Sesame

Regardless of where you get it, pulling your own credit report will never impact your credit score.

What insights do creditors get from hard credit inquiries?

Beyond looking at your credit score, lenders and credit card companies pull your credit report to get all the information needed to approve you. Here are some of the insights drawn from your report. 

Payment history

Your credit score takes your payment history into account, but it doesn’t tell the whole story. Lenders want to see a long history of on-time payments.

Many creditors, particularly mortgage lenders, will go through your payment history on your credit report and flag any late payments. They may request written explanations for any late payments. They may reject your application if they see too many, even if you’ve rebuilt a good credit score.

Collections accounts

Creditors also want to see what collections accounts are in your credit history. They may request a written explanation for these accounts or even request you pay them off before approval.

Credit utilization ratio

Your credit utilization rate is the amount of revolving debt divided by your total credit limits. Lenders want to see exactly how much of your limit you’re using on each credit card. If they see you have balances spread across too many credit cards or other red flags, they may decline you regardless of your credit score.

Credit inquiries

Lenders also want to see how active you are in searching for new credit lines, so they use a hard credit inquiry to review your hard credit pulls. If they see too many in a short period of time, they may outright reject you because you pose a credit risk. However, some lenders — generally mortgage lenders — will allow you the opportunity to explain the inquiries in writing before rejecting you.

Debt-to-income (DTI) ratio

Finally, lenders must verify that you have enough income to pay your monthly debt and living costs. They use the information from your credit report to collect all your minimum monthly payments, then divide this by your monthly income to get your DTI ratio. If your DTI ratio is too high, they may reject you, even with good credit.

Limit your credit card applications to protect your credit

Credit card application opportunities are everywhere. While having a credit card or two can be a good thing, applying for too many can result in hard credit inquiries and a lower credit score.

Instead of applying for many cards, pick one or two of the best credit cards for you and apply for those.

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