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Q: I am applying for a Visa and I heard that this will hurt my credit score. Is this true?
A: As with many things in life, your Visa application could hurt your credit score – or not. When you apply for a credit card – any credit card – the credit company will pull your credit report. In general, each inquiry on your credit report will ding you 5 points on your score.
In most cases, though, this isn’t going to have a long term effect on your credit score. Here’s why:
- The damage from credit inquiries only stays on the report for 30 days.
- Most scores are between 300 and 850. If you have good credit, that 5 points won’t make a significant difference.
If you are planning to apply for a large loan or attempting to repair a damaged credit score, stay away from new card applications to avoid unnecessary drops in your score. Limit the number of cards you apply for at any given time. Even if you have good credit, card companies see multiple requests as a sign of desperation – never a good thing.
It’s important to know you will not be dinged for pulling your own credit report. You won’t be dinged for the initial credit checks that go along with those mass-mailing card offers unless you actually apply for the cards. If you have your information pulled by one company several times, it will not count against you until you have four or more checks within the same 45 day period.
Remember that opening credit cards, using them and paying them off is a good way to build credit. Open only what you need, however, and make sure to be responsible with your cards at all times. Missed payments and high balances will do far more to hurt your credit than a single card application.