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Credit Card Basics

How Much Does Applying for Multiple Credit Cards Affect Credit?

Applying for multiple credit cards in a short period of time can affect credit scores for several reasons.

  • First, suddenly taking on a lot of potential new debt is a strong sign of risk, so scores could dip.
  • Second, there will be an ongoing risk that you could use the new credit to charge more than you can repay, even if you don't do so right away.
  • Third, when you apply for a credit card an inquiry will be added to your credit report. An inquiry is simply a record that a lender has checked your credit report in response to your application.

The inquiry indicates that there may be a new debt that doesn't show as an account on your report yet; therefore, it represents potential risk and can affect credit scores a little bit.

FICO® says each inquiry may lower your score five to 10 points, but the effect on your scores is temporary and should lessen after a few months.

By then there will be a new account showing in your report representing the debt, so the inquiry becomes less significant. Conversely, if you do not open a new card and no new debt appears on your report, the inquiry will no longer represent risk.

People often worry about inquiries, but they are in fact the least important factor in credit scores.

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Scoped on: 07/07/2016

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