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News: How Applying for Multiple Credit Cards Affects Your Credit Score - Credit-Land.com

It is not forbidden to submit several credit card applications for different credit cards. It may even make sense to apply for two or more credit cards to get the best one. However, multiple credit card inquiries can lower your credit score and raise a flag for future creditors.

Here's what you need to know about applying for a new credit card and how it may affect your credit score.

When you apply for several credit cards, each card account you apply for will result in a separate inquiry and each will affect your credit score. While inquiries do not lower credit scores much, the unwanted effect will become noticeable when you have multiple inquiries in a short period.

It's hard to say how much your credit score will drop with each inquiry, as every scoring model has its own formula. With the FICO® Score®, for example, one additional inquiry will usually decrease your credit score by fewer than five points.

There is another thing to consider, though. Data shows that people who have multiple credit inquiries in their reports tend to overextend themselves and default on their debts. For creditors, that's enough to get suspicious and red flag you. That means, you may be offered less favorable credit terms, notably higher interest rates and lower credit limits, because of the added risk. Some issuers may even deny your credit card application.

Thus, when you are considering getting more than one credit card, check your credit reports and credit scores first. If you see any recent credit inquiries in your credit reports, consider waiting three to six months before you apply for a new credit card. Once you know your current credit score, make sure you choose the card that fits your credit history to minimize the risk of being denied.

Weigh all the benefits and drawbacks of having multiple inquiries and opening several credit cards in the short term. For example, this tool may give you an idea of how your credit score may change if you apply for new credit cards.