Does Applying for Credit Cards Affect Your Credit Score?

If you’re angling for cheaper travel and hoping credit card rewards are your ticket to freedom, you’ve probably wondered how signing up for new cards might affect your credit score. And you’re right to worry. Your credit score, which is the three-digit manifestation of your credit health, can play a bigger role in your future than you think.

While good credit can help you qualify for a loan to purchase a home or car – or even cause you to pay higher insurance rates, poor credit can prevent you from achieving certain important life goals. Good credit also makes it easier to sign up for all the travel credit cards offers you crave, whereas bad credit can keep you from getting approved altogether.

How is Your Credit Score Determined?

What exactly goes into a credit score? While there are several different credit scores out there, the most popular type of the score is the FICO score. This score, like the others, uses several different factors to determine how creditworthy you are.

Your FICO score is figured based on the following factors:

  • Payment history (how often you pay your bills on time) – 35 percent
  • Amounts owed (how much debt you have) – 30 percent
  • Length of credit history (the average length of your credit accounts) – 15 percent
  • New credit (how much new credit you’ve applied for) – 10 percent
  • Credit mix (the balance of credit types in your portfolio) – 10 percent

FICO scores range from 300 – 850 with higher scores being seen as preferential. According to, any FICO score over 800 is considered exceptional. Scores in the 740-799 range are considered very good, while scores from 670 to 739 are considered good. Fair scores are considered anything from 580 to 669, while poor credit is considered any score that’s 579 or lower.

Keep in mind that these scores aren’t set in stone (these are just average ranges to go by), and that your score can change over time. We’ll talk about some of the best ways to boost your score in a minute.

How to Check Your Credit Score

By now, you’re probably curious about how your credit score looks today – at this moment. Several different websites let you get a free credit score online. These services provide an estimate of your score and offer some insight into how your credit stands today, plus what factors may be lowering your score.

The Truth About Rewards Credit Cards and Your Credit Score

So, you want to know exactly how credit cards – and specifically, rewards credit cards – will affect your credit score in the short-term and over the long run. Unfortunately, the answer to this question is complicated because there are so many factors at play.

For starters, you should know that signing up for new credit cards can absolutely affect your credit score in ways that are both good and bad. The impact of new cards can play out in different ways based on your unique credit situation. For example, signing up for a new travel credit card can actually boost your credit score in some cases. Why? Because opening a new line of credit can add to your available credit and lower your credit utilization or “amounts owed” as a percentage.

Does signing up for multiple credit cards hurt your credit score?

If you open several cards at once, the act can temporarily damage your credit score. As we mentioned above, “new credit” makes up 10 percent of your FICO score. The amount of new credit you have is typically seen as a negative for lenders, and may cause them to see you as “risky” borrower.

Opening even one new card results in a hard inquiry that can temporarily damage your score and lead to the loss of a few points. Fortunately, the impact of this damage is usually temporary.

How soon can I close a credit card without damaging my credit rating?

Since a lot of Travel Rewards Credit Cards offer signup bonuses as an incentive, it’s tempting to sign up for new cards all the time. But since many charge annual fees, you may be wondering about the impacts of opening then closing cards too often.

While it’s hard to predict the exact impact to your score when you close a credit card, it’s important to note that the card closure itself shouldn’t be problematic. If you see a ding to your credit score after closing a credit card, it’s likely the result of the card closure reducing the average length of your credit score or reducing the amount of available credit you have.

As a rule, we typically wait at least 8 months before closing a credit card. If the card has no annual fee, or if it has compelling benefits that make up for the annual fee (as most of the cards on our site do), then we leave the card active, even if we’re not using it a lot.

How can I keep my credit in the best shape possible?

If your goal is keeping your credit score high regardless of how many credit cards you sign up for, the best thing you can do is keep in mind how FICO scores are determined. As we mentioned, the top two determinants of your credit score (making up 65 percent) are your payment history and amounts owed. By paying all your bills on time and keeping debt at a minimum, you can give yourself a leg up.

What can I do if my credit rating is bad?

If your credit score is poor or even fair, you may not be able to qualify for the top rewards credit cards or travel offers. In that case, the best thing you can do is work on improving your credit with the strategies already mentioned. By taking credit seriously, paying all bills early or on time, and keeping debt at a minimum, you should be able to slowly improve your score over time.

If your credit is truly bad, you can also consider signing up for a credit card that that accepts people with bad credit ratings. Obtaining a credit card and making regular payments to your full balance can quickly improve your credit rating. You may need to sign up for a secured card that requires a cash deposit as collateral, however. is an excellent credit card comparison website that can tell you which cards to apply for depending on your credit score. They have sections for excellent credit, good credit, fair credit, bad credit, or limited/no credit. This page is kept up-to-date at all times, and can even help you find cards that include bonus rewards, such as cashback or travel points.

Some of the best options on the market include:

Capital One Platinum Secured Credit Card

  • No annual fee
  • Can qualify with bad credit

Discover it® Secured Card

  • No annual fee
  • Earn up to 2 percent cash back

Citi® Secured Mastercard®

  • No annual fee
  • Can qualify with bad credit

The Thrifty Gist

  • Your credit score is determined using a wide range of factors, including how many credit cards you sign up for.
  • The best way to keep your credit in good shape is to pay bills on time, keep debt levels low, and treat your credit with care.
  • Try to keep your card active for at least 8 months before cancelling.
  • If your credit is poor, it’s important to take steps now to improve it. Obtaining Credit Cards for Bad Credit and paying your bills on time is the fastest way to improve your credit rating.

Thrifty Nomads has partnered with CardRatings for our coverage of credit card products. Thrifty Nomads and CardRatings may receive a commission from card issuers. Opinions expressed here are author's alone. Responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.