But getting denied doesn't directly hurt your credit scores. Instead, applying may lower your credit scores—usually by just a few points, according to credit-scoring company FICO®—because applying for a credit card will trigger a hard inquiry.
While the exact impact may vary from case to case, generally speaking, you can expect your score to drop by about five points each time you apply for a new credit card.
When you apply for a credit card, the company will check your credit report as part of the approval process. A hard inquiry will appear on your report showing that the company requested it. You may see a slight drop in scores at first, but a single inquiry for a credit card is not likely to have a substantial effect.
Getting rejected for a loan or credit card doesn't impact your credit scores. However, creditors may review your credit report when you apply, and the resulting hard inquiry could hurt your scores a little.
You can't decline a credit card after being accepted, but you can always cancel your new credit card if you don't want the new credit account.
While the number of credit cards you should have is up to you and you can apply for new lines of credit as often as you want, it's a good idea to wait at least 90 days between new credit card applications—and it's even better if you can wait a full six months.
Having more than one credit card may help you keep your credit line utilization ratio per card lower than the recommended 30% by spreading charges. There are potential benefits to having multiple cards, such as pairing various types of rewards cards to optimize earnings on all categories of spending.
Rossman notes that when people open a new credit card, doing so essentially lowers the average age of their credit accounts. “I would say for most people, the total impact is probably not going to be more than 10 to 20 points and probably shouldn't linger more than like three to six months,” says Rossman.
FICO credit scores, the industry standard for sizing up credit risk, range from 300 to a perfect 850—with 670 to 739 labeled “good,” 740-799 “very good” and 800 to 850 “exceptional.” A 700 score places you right in the middle of the good range, but still slightly below the average credit score of 711.
Although ranges vary depending on the credit scoring model, generally credit scores from 580 to 669 are considered fair; 670 to 739 are considered good; 740 to 799 are considered very good; and 800 and up are considered excellent.
A 700 credit score meets the minimum requirements for most mortgage lenders, so it's possible to purchase a house when you're in that range. However, lenders look at more than just your credit score to determine your eligibility, so having a 700 credit score won't guarantee approval.
The best-known range of FICO scores is 300 to 850. Anything above 670 is generally considered to be good. FICO also offers industry-specific FICO scores, such as for credit cards or auto loans, which can range from 250 to 900.
Experts say you need a minimum credit score of 620 to be approved for a conventional mortgage loan. As a result, a credit score of 790 should make a mortgage approval highly likely.
Depending on where you're starting from, It can take several years or more to build an 800 credit score. You need to have a few years of only positive payment history and a good mix of credit accounts showing you have experience managing different types of credit cards and loans.
A FICO score of 650 is considered fair—better than poor, but less than good. It falls below the national average FICO® Score of 710, and solidly within the fair score range of 580 to 669.
There is no universal number of credit cards that is “too many.” Your credit score won't tank once you hit a certain number. In reality, “too many” credit cards is the point at which you're losing money on annual fees or having trouble keeping up with bills—and that varies from person to person.
If you don't use your credit card, the card issuer may close your account., You are also more susceptible to fraud if you aren't vigilant about checking up on the inactive card, and fraudulent charges can affect your credit rating and finances.
The standard advice is to keep unused accounts with zero balances open. The reason is that closing the accounts reduces your available credit, which makes it appear that your utilization rate, or balance-to-limit ratio, has suddenly increased.
Nothing is stopping you from applying for two or more credit cards in a short period of time, or even at the same time. But multiple credit card inquiries can hurt your credit score and raise a red flag for future creditors.
That's not a huge hit, but the news gets better from there. Because even though the “credit inquiry” that gets generated when you apply for a new credit card account will stay on your credit report for two years, most credit scoring models only factor it into their scores for roughly the first three to six months.
New Credit Applications
New credit applications—like for credit cards—could have an impact on your credit scores. That's because a new credit application generally creates a hard inquiry, which can cause your credit scores to drop by a few points and stay on your credit report for up to two years.
The credit scores and reports you see on Credit Karma should accurately reflect your credit information as reported by those bureaus. This means a couple of things: The scores we provide are actual credit scores pulled from two of the major consumer credit bureaus, not just estimates of your credit rating.
A 740 credit score is Very Good, but it can be even better. If you can elevate your score into the Exceptional range (800-850), you could become eligible for the very best lending terms, including the lowest interest rates and fees, and the most enticing credit-card rewards programs.