Will a Store Credit Card For Fair Credit Application Damage Your Credit Score?
Yes and No - It depends in good part on your timing.
Yes, it hurts your credit score if you've submitted other applications in the recent past. To Equifax, Experian and TransUnion - the three main credit bureaus in the U.S. - as well as potential lenders, applying for lots of credit cards in a brief period of time is viewed as desperation. Trying to open several lines of credit in the span of a few days or weeks makes them think that you've been turned down and you're scrambling to find another source.
No, a merchant credit card application really won't hurt your score if it's been weeks or months since the last time you applied for credit. If you wisely wait a few weeks or months between submitting applications, your score might take a very small hit. However, if your score is already good or better, the hit you take will be very minor and nothing to worry about.
It's helpful to remember that lenders are for-profit enterprises, and if your score is good, they'll still extend credit to you - reluctantly - in the hopes of making money from your account. However, they avoid risk like it's an infectious disease, and when someone applies for a store credit card, car loan, cellphone account, or any other line of credit in a short period, it often means one of two things to them:
- You're desperate to get anyone to extend credit to you; or
- You're the victim of identity theft, and the thief is trying to open as many credit lines as possible to defraud the lender and put you in heaps of trouble.
- How long it's been since the last credit inquiry on your name
- The time since recent openings of new credit accounts by type
- The number of recent credit inquiries (like your store credit card)
- The number of recently opened lines of credit, proportion of new accounts to total number of accounts, and type of credit account
See also freescore.com