Did you know that making too many credit card enquiries can reduce your credit score by nearly 200 points? That’s what the Credit Savvy team has discovered in our latest study!

What is a credit card enquiry?

When you apply for a credit card, the lender can make an enquiry at a credit reporting body. Each time they do this it leaves a footprint on your file showing you’ve applied for credit, regardless of whether your application is approved or declined. These enquiries can stay on your credit file for five years so if you switch cards every year, you could easily end up with five enquiries on file.

What does this mean for your credit score?

Our study of 50,000 Aussies[1] suggests that multiple credit card enquiries have a negative effect on a consumer’s credit score. Australians with five or more credit card enquiries on file have an average score 128 points lower than Australians without any enquiries, while those of us with more than seven credit card enquiries on file are on average 187 points worse off[2].

When you consider that Experian credit scores are out of 1,000, and can be used by lenders to assess the risk of lending credit to someone, potentially being docked close to 200 points is something to think twice about.

How can I check my credit card enquiries?

We encourage everyone to check what enquiries they have on their credit file – you can do this for free at Credit Savvy.

Remember to apply for credit only when you need it and have done your homework to make sure the product is suited for you before you apply. Continually applying for new credit cards might not be the best idea, as it can hurt your credit score and your ability to get that card or loan a few years later.

 

[1] Study based on a sample of 50,000 Credit Savvy members as at 17/09/2015.
[2] Numbers are based on an extract of Credit Savvy members and are only representative of these members.

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6 Comments

  1. I don’t know that I did applied making too many credit card enquiries can reduce your credit score by nearly 200 points? That’s what the problem next? And my score is 585 and is okay
    What can I make my score up?

    • Melissa Ng Reply

      Hi Butrasri,

      Thanks for getting in touch. There are many ways you can improve your credit score, but it takes time and generally requires you to maintain a healthy credit history.

      You might like to check out our blog post, 5 Tips That Could Improve Your Credit Score, for more information.

      Kind regards,
      Mel from The Credit Savvy Team

  2. Brett Harris Reply

    Only 200 points eh? I have made 5 enquiries last year,4 were for the same loan purpose (none of the providers would tell me the simple technical reason why the requests failed) and I succeeded in obtaining credit once the requests were changed. The other one was a RESPONSE to an offer by an existing provider for of a small increase in a credit limit which was granted.

    My score is now 320 points – NEVER defaulted, NEVER missed a repayment, NEVER had any legal issues, NEVER bankrupt – clean record!!

    • Melissa Ng Reply

      Hi Brett,

      Thanks for getting in touch.

      Credit Savvy provides credit file information and credit scores from Experian, one of Australia’s official credit reporting bodies. Each credit reporting body has their own algorithm that uses many different factors to determine a score and each will interpret the data differently.

      How enquiries affect your credit score depends on the frequency and recentness of the enquiries, the type of credit applied for and the provider of the credit.

      There is also some further information in the following articles that you may find useful:

       
      Kind regards,
      Mel from The Credit Savvy Team

  3. So any time you apply for a credit card you are actually hurting your score?

    • Melissa Ng Reply

      Hi Katie,

      Thanks for getting in touch. Any time you apply for a credit card a credit enquiry can be recorded on your credit file. The effect of an enquiry varies depending on the type and amount of credit applied for and the credit provider you applied with. In general, a credit card enquiry will lower your score but the effect will lessen as the enquiry ages and eventually drops off your file.

      Kind regards,
      Mel from The Credit Savvy Team

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