Waiting about six months between credit card applications can increase your chances of getting approved. Apply more frequently than that, and issuers may see you as a riskier bet and reject your application.
The exception? If you have excellent credit, a high income and a history of on-time payments, you can probably apply for new credit cards more frequently and still get approved. That’s because you’re the kind of customer that card issuers see as having a low risk of defaulting on future payments.
On the other hand, if your credit is average or worse, you might need to wait even longer between credit card applications to increase your chances of approval. Fortunately, credit scores typically only take into account inquiries made within the last 12 months.
Credit card issuers view multiple card applications in quick succession as a sign of financial distress. It raises red flags about your ability to make future payments and keep your accounts in good standing.
However, FICO says that “hard inquiries” associated with applying for new credit only account for about 10% of your score. There are more important factors in your risk profile than the number of credit applications, such as whether you pay your bills on time and your overall debt burden.
That’s why people with great credit can get away with more frequent applications and still get approved. If you have excellent credit, waiting three months between card applications is a good guideline, but it’s not a hard-and-fast rule.
A few special circumstances require extra caution when it comes to timing your credit card applications:
If you’ll be applying for a mortgage in the near future, take extra care to space out your credit card applications at least six months apart. Each credit card application typically knocks a few points off your score. You don’t want to risk lowering your score, even a little, when it could increase the cost of your mortgage. Even a slight increase in your mortgage rate could cost you thousands of dollars over time, so you want your credit score to be as high as possible when you apply. Wait until after you’ve signed the mortgage to apply for a new credit card — no matter how good the sign-up bonus is, a higher rate on a mortgage will cost you more.
If your credit has been damaged in the past, you’ll want to re-establish it slowly and carefully. You’ll also want to avoid temptations that may have gotten you into trouble before. Even if you think you could get approved, wait at least six months between applications to make sure you won’t raise any red flags.
Having 5 points knocked off your score because of a credit card application isn’t a huge deal if your score is above 780. It’s a much bigger problem if your score is below 720. If you have poor credit or no credit, you should apply for new cards less frequently than someone with excellent credit. Also, only apply for cards appropriate for your credit score. Rewards credit cards and those with generous 0% interest offers are generally aimed at customers with good to excellent credit. Others, such as secured credit cards, are designed with credit builders in mind.
Your instinct might be to immediately apply for several other cards, but doing so could further hurt your chances of approval. Instead, consider calling the card issuer to ask why your application was rejected. You may learn something that you can address, such as fixing an error on your credit report or establishing a longer period of on-time bill payments.
You can then work toward improving your credit by paying bills on time and reducing your outstanding debt. Then, after waiting at least six months, try applying again with a stronger chance of approval.
Kimberly Palmer is a credit card and personal finance expert at NerdWallet. She has been featured on the "Today" show and in The New York Times. She recently spoke at FinCon 2019, a national personal finance conference. She is also the author of three books about money: "Smart Mom, Rich Mom," "The Economy of You" and “Generation Earn.” Previously, she was a money editor at U.S. News & World Report and AARP. She’s always looking for new ways to teach her three kids about how to be smart with money. Email: [email protected] Twitter: @KimberlyPalmer.
Lindsay Konsko is a former staff writer covering credit cards and consumer credit for NerdWallet.