Does Applying for a Credit Card Hurt Your Credit?

A new credit card application triggers a hard credit inquiry. A hard credit inquiry happens when a lender checks your credit report to assess whether to grant you access to credit. A hard credit inquiry can lower your score by a few points for up to a year and stay on your credit report for up to 2 years.

Does being preapproved for a credit card affect your credit?

Pre-approval can mean that a card issuer has identified you as a good candidate for a credit card.

A pre-approval often comes with a soft credit inquiry, which is when a lender simply reviews your credit and credit score to get a sense of how you’re managing debt. While soft credit inquiries can appear on your credit report for up to 2 years, they do not affect your credit score. However, if you apply for a card using that pre-approved offer, you may be subject to a hard credit inquiry as part of the application process.

Can opening a new credit card help your credit?

There can be benefits to opening a new credit card. The increase in available credit from a new card can decrease your credit utilization ratio. Your credit utilization is an important factor in your credit score. 

Additionally, opening a credit card can improve your credit mix, which is also part of your creditworthiness. For example, if you only have student loans and an auto loan, adding a credit card to the mix may show that you can handle different types of debt. 

Getting your first credit card may be an opportunity to establish a positive payment history and show you’re a responsible borrower.

Deciding whether to apply for a new credit card

When it comes to applying for a new credit card, you’ll need to assess your financial situation and needs.

It’s also useful to remember that while applying for a single credit card usually has a minimal and temporary affect on your credit score, applying for multiple credit cards or different types of debt in a short period can be a red flag to lenders. It may look like you’re taking on more debt than you can handle.

If you're looking for a new credit card, Citi offers a range of cards with different benefits. You may want to consider your spending habits and any perks and welcome offers that come with each card.

When looking for a card, understanding what you want in a new card and the potential effects on your credit score can help you navigate the application process and make smart financial decisions.

Disclosure: This article is for educational purposes. It is not intended to provide legal, investment, or financial advice and is not a substitute for professional advice. It does not indicate the availability of any Citi product or service. For advice about your specific circumstances, you should consult a qualified professional.

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