Does my credit score go down if I switch credit cards?

Impact of Switching Credit Cards on Credit Score

When considering switching credit cards, it’s crucial to understand its potential impact on your credit score. A switch can trigger a credit inquiry, which can temporarily lower your score.

Types of Credit Inquiries

• Hard inquiry: Occurs when a lender reviews your credit report to determine your creditworthiness for a loan or new credit card.
• Soft inquiry: Does not affect your credit score and is typically used by lenders to pre-approve you for offers or to monitor your own credit.

Impact of Inquiries

• Multiple hard inquiries: Can significantly lower your score, especially if done within a short period.
• Single hard inquiry: Usually has a minimal impact and will typically not damage your score unless accompanied by other negative factors.

When Switching May Trigger a Hard Inquiry

• Switching to an upgraded card (e.g., from a basic card to a rewards card)
• Requesting a higher credit limit on your new card
• Applying for a new card with a different lender

Steps to Minimize Impact

To minimize the impact of credit inquiries on your score when switching credit cards:

• Use soft inquiries: If possible, check your pre-approval offers before applying for a new card to avoid unnecessary hard inquiries.
• Limit hard inquiries: Avoid applying for multiple credit cards within a short timeframe.
• Build your credit history: A longer and consistent history of responsible credit management can help offset the impact of inquiries.
• Monitor your credit: Regularly review your credit report and dispute any inaccuracies that could affect your score.

Conclusion

Switching credit cards may trigger a credit inquiry, but its impact on your credit score will depend on the type of inquiry and your overall credit history. By understanding the potential risks and taking steps to minimize the impact, you can ensure that switching credit cards doesn’t negatively affect your credit.