Should I Be Worried About Hurting My 803 Credit Score if I Apply for a New Credit Card? – Technologist

Credit scores are polarizing. Some people have no clue what their score is and never check it. Others obsess about even the smallest of changes month over month.

The best possible score: 850. But there’s a psychological barrier at 800 points. Many of those watching their credit scores like a hawk fixate on that figure.

It doesn’t hold any real-life, practical significance, though. Money expert Clark Howard says a score of 760+ will get you almost all the benefits of a good credit score, while reaching 780+ is plenty good for anything you want.

Five main factors account for your score:

• Credit history (35%)
• Amounts owed (30%)
• Credit history length (15%)
• Credit mix (10%)
• New credit (10%)

Today we’ll evaluate how applying for new credit can impact your score.

Should I Be Worried That New Credit Will Hurt My 803 Credit Score?

“New credit” amounts to 1/10th of your overall credit score. But what is it, exactly?

The category refers to credit that you’ve applied for that results in an inquiry to your credit history. When you apply for credit, even if you’re approved, your score drops a bit. But it doesn’t take much time to recover.

According to Discover, “Hard inquiries stay on your credit report for up to two years. However, depending on which credit scoring model a major credit bureau uses, most only apply the previous 12 months to your score.”

So should you worry about the consequences to your credit score if you apply for a new credit card — especially if you’ve breached the psychological anchor of an 800 credit score?

That’s what a listener recently asked Clark.

Asked Chris in North Carolina: “I currently use a Prime Visa rewards credit card. It’s OK, but I feel I would benefit from a different rewards program such as the Wells Fargo Autograph Card because the rewards cater more toward my spending habits.

“I pay my balance off weeks before it is due and my credit score is around 803. I don’t want to damage that by opening a new account but I feel I could maximize my points with a new card. What are your thoughts?”

Clark isn’t concerned at all about the hit to your score if you apply for a new credit card. Especially if your score sits over 800. The only exception is if you’re going to apply for a mortgage soon.

“The only reason you wouldn’t get the card from Wells that you’re interested in is if you’re planning on buying a home in the next six months. You want no new applications for credit at all in the six months leading up to a home purchase,” Clark says.

“If that’s not part of your life, and you’re in the 800s, the impact to your score is very temporary and tiny for that new application of credit.”

Should I Trust a Wells Fargo Credit Card?

Clark hates what he calls the four monster mega banks. Chief among them for Clark, due to all the legal and criminal cases for poor behavior is Wells Fargo. He generally despises Wells Fargo as a banking option.

However, credit cards are a clear exception. Wells Fargo makes our list of the best 2% cash back credit cards. We’ve also written favorably about the Wells Fargo Autograph^SM Card that Chris referenced.

“We’ve had a history of customer service complaints about Wells Fargo. And there’s been some dishonesty there. Criminal behavior over the years,” Clark says.

“To my knowledge, we have never had a complaint about a user of the Wells Fargo Autograph Card.”

Do I Even Need Another Credit Card?

Clark’s first recommendation is to get a 2% cash back credit card (all categories) with zero monthly or annual fees. But he doesn’t want you to stop there.

He says everyone needs at least two credit cards from two different issuers. Partially to improve your credit mix. But mostly to protect yourself if one of the companies fires you as a customer or severely limits your line of credit.

The Best Credit Card for Your Wallet

Want to figure out the best cash back credit card for your wallet?

You can start with our credit card tool at Clark.com, Clark and podcast producer Christa mentioned during the episode in response to Chris.

“If you can see your pattern – put what you see as your pattern of use [into our credit card tool],” Clark says.

“If you’ve got it down to the numbers, it’ll be even more precise information. And we’ll show you the best rewards or cash back card out there for your exact situation.”

Final Thoughts

Know that any time you apply for credit resulting in a hard inquiry, it will impact your credit score.

But keep it in context. It’s a small impact, as new credit makes up just 10% of your overall credit score. And it’s unlikely to impact your score at all within one year of the inquiry.

If your score is greater than 760, and especially if it’s greater than 800, you should not hesitate to apply for a new card if you have good reason to do so. Just be wary about applying for any type of new credit if you’re going to apply for a mortgage soon.

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