Does Opening a Credit Card Hurt Your Credit? | Capital One (2024)

Opening a new credit card can be a way to find a low interest rate, earn travel rewards or take advantage of an introductory offer. When you open a new credit card account, you might see a brief dip in your credit scores. But if you use your credit card responsibly, it could give you the opportunity to boost your credit in the long run.

Here’s what you need to consider before opening a new credit card—and some of the benefits you may experience with your new card.

Key takeaways

• Applying for and opening a new credit card may cause a temporary dip in your credit scores.
• Getting pre-approved for a credit card only requires a soft inquiry, which won’t impact your credit scores.
• A new credit card might help reduce your credit utilization ratio and improve your credit mix—which could have a positive impact on your scores over time with responsible use.

Applying for a new credit card can trigger a hard inquiry, which involves a lender looking at your credit reports. According to credit-scoring company FICO®, hard inquiries can cause a slight drop in your credit scores.

Keep in mind that hard inquiries usually stay on your credit reports for two years. However, they may not have an effect on your scores for that long. For example, credit-scoring companies may only consider hard inquiries for up to 12 months. But experts don’t advise opening several new credit accounts in a short period of time.

The age of your credit accounts is also typically a factor in calculating your credit scores. Having a longer credit history can be helpful. But when you open a new credit card, it could bring the average age of your credit accounts down and affect your credit scores.

When you open a new credit card, your available credit increases. This could improve your credit utilization ratio. This ratio refers to how much total available credit you’re using and it’s a factor in calculating your credit scores. Experts recommend keeping your credit utilization ratio below 30%.

If you avoid charging large purchases and keep your balance low, you could maintain a low credit utilization ratio.

Your new card could improve your credit mix—or the different types of credit accounts you have. Mortgages and student loans are common kinds of what might be considered good debt, or debt that helps borrowers build wealth. Credit card issuers like to see that borrowers can responsibly manage these different types of debt—making payments on time and in full.

But revolving credit may start to be considered bad debt if there’s a history of late or missed payments. Carrying high monthly credit card balances each month can increase your debt-to-income (DTI) ratio. And lenders may consider your DTI ratio when reviewing future credit applications.

Opening a new credit card could also help you:

• Take advantage of introductory offers and sign-up bonuses.
• Establish or build a strong credit history with consistent, on-time payments.
• Use a balance transfer to help pay off high-interest debt at 0% or low introductory rates.
• Find a card with a great rewards program.

Pre-approval offers can help you explore your options before you apply for a new credit card. The good news: Pre-approval doesn’t affect your credit scores. But if you choose to apply for a pre-approval credit card offer, the application will trigger a hard inquiry, which can impact your scores.

Checking whether you’re pre-approved before applying for a credit card could minimize the number of hard inquiries on your credit report. And that’s because receiving a pre-approval offer often means you have a good chance of being approved for that specific card.

Focusing on applying for cards you’re pre-approved for could help you avoid application rejections. You can use tools like Capital One’s pre-approval tool to check your potential eligibility without hurting your credit scores.

It’s hard to pinpoint exactly how opening a new credit card could impact your credit scores. But responsibly using a new card could give you a credit-building opportunity with lots of benefits.

Introductory offers, rewards programs, interest rates and eligibility requirements are a few important factors to consider. The Consumer Financial Protection Bureau (CFPB) recommends only applying for the credit you need. So focusing on the credit card features best suited to you can help you narrow down your search. And looking at your pre-approval odds helps you explore your options before you apply—without affecting your scores.

When you open your new credit card, a small and temporary drop in your credit scores is possible. But using your card responsibly can help offset this impact. Making consistent on-time payments and avoiding high balances can have a positive impact on your credit scores over time.

Remember that you may be able to see whether you qualify for new credit before triggering a hard inquiry. Get pre-approved for a Capital One card quickly and easily with no impact to your credit scores.