| How does applying for a credit card hurt my credit | | | | abuse your newly available credit. |
| score? | | | | If your credit application gets approved, then your |
| Every time you apply for a credit card, the credit card | | | | score will rise fairly quickly because the additional line |
| company makes an inquiry into your credit report. | | | | of credit will give you a boost. Along with this, your |
| These are also known as hard pulls. Each of these | | | | 'debt is to available credit' ratio will also improve and |
| credit inquiries or hard pulls, take away around 5 points | | | | that will help boost your score too. |
| from your credit score. | | | | Be aware of the credit application spiral |
| The rationale behind taking away points from your | | | | The people who are worse hit are the people whose |
| credit score when you apply for credit, is that, it is | | | | credit application gets rejected. When their application |
| harder to control multiple lines of credit when | | | | gets rejected, their score goes down. However, since |
| compared to just a few. It also shows a tendency that | | | | their application has been rejected, they apply again |
| leans towards getting excessive credit and then | | | | thereby reducing their score further and chances are |
| getting into a spending spiral, which may become | | | | that they will get rejected once again. This is a vicious |
| difficult for you to get out of and as a result your | | | | circle and if you get into this kind of thing four or five |
| chances of default become high. | | | | times, then your credit score takes a bigger hit. |
| These inquiries show on your credit report for a period | | | | So be careful, and next time you are tempted to apply |
| of one to two years, but the dent in score itself will be | | | | for that store credit card that will give you $10 off on a |
| rectified in about a couple of months, if you do not | | | | new shirt, think twice! |