myFICO: How to Shop for a Credit Card and Minimize the Impact to Your Credit
July 30 2024 - 12:34PM
Business Wire
Losing several FICO® Score points after applying for a credit
card is not uncommon. This happens because a new credit application
usually triggers a credit inquiry, which accounts for 10% of your
FICO Score.
To get the best credit card deal, it's important to shop around
and compare offers. Naturally, you also want to protect your credit
during this process — losing too many points could affect your
chances of getting approved. Here are a few tips to shop for a
credit card while minimizing the impact on your credit, from
myFICO:
For more credit education, visit myFICO’s blog at
https://www.myfico.com/credit-education/blog
Know Where You Stand
Credit cards have different FICO® Score requirements. While most
issuers don't publicize the exact score ranges, being familiar with
your score can give you a general idea of the kinds of credit cards
you may qualify for. For instance, you typically need excellent
credit to qualify for top-tier rewards credit cards. On the other
hand, if you have a low score, you may focus on secured credit
cards to begin rebuilding your credit.
Checking your FICO® Scores before you start shopping can help
you narrow your search to the cards you're most likely to be
approved for.
Shop Before You Apply
There are several kinds of credit cards to choose from: cash
back, travel, balance transfer, low interest rate, and new to
credit, to name a few. Understanding your financial goals and
spending habits can help you hone in on the credit cards that are
tailored to your needs.
As you review credit cards, consider fees, interest rate,
benefits, and rewards for each card and note your favorites. By
narrowing your choices to your ideal credit cards, you can keep
your credit card applications to a minimum.
Take Advantage of a Preapproval Offer
Your credit card might choose you first. Some card issuers
prescreen potential customers and, if they think you're a good
match, they'll send a preapproved offer to invite you to apply.
Approval isn't guaranteed, but you do have a higher chance of being
approved.
Don't jump at the first card offer you receive. Review the
benefits, rewards, costs, and other terms to determine whether the
card might be right for you. It also helps to check similar credit
card offers online to be sure you're getting the most competitive
deal.
Get Prequalified
Most major credit card issuers offer an online tool that shows
whether you prequalify for one of their credit cards. The
prequalification tool only does a soft pull on your credit, so you
can submit multiple prequalification requests without hurting your
FICO® Scores.
As with prescreened offers, getting prequalified doesn’t
guarantee approval. It simply means the card issuer thinks you have
a high likelihood of being approved. Once you complete and submit
the full application, the card issuer will do a full credit check
to evaluate your application.
Minimize Your Credit Card Applications
Use these tips to shop for a credit card and narrow down your
credit card options so you only have to make one or two
applications. This keeps your new credit inquiries at a minimum and
limits the impact to your credit. The fewer credit cards you apply
for, the better it is for your credit.
About myFICO
Get your FICO® Score from the people that make the FICO Scores,
for free. Plus, free Equifax credit monitoring and a free Equifax
credit report every month. No credit card required. For more
information, visit
https://www.myfico.com/products/fico-free-plan-a
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version on businesswire.com: https://www.businesswire.com/news/home/20240730115991/en/
Elizabeth Warren ElizabethWarren@fico.com