Does Applying For A Credit Card Affect Credit Score

Consider this scenario: you apply for a credit card, get approved and the card arrives a few days later. But, you forget to activate it, or have second thoughts about activating it and put it off.

See If You're Pre-Approved Before You Apply. There's no impact to your credit. Check Now

What happens if you decide to hold off on activating the card, until you're sure you want to use it? Does a never-activated credit card affect your credit score, even if you don't technically activate it or make any purchases with it? The simple answer is: yes.

There are some key points to consider about not activating a credit card:

Simply Applying for Credit Can Impact Your Credit Score
Not Activating Your Card May Have Consequences
Responsible Use Is Beneficial

1. Simply Applying for Credit Can Impact Your Credit Score

First, even though you need to activate the card in order to make purchases with it, whether or not you activate a credit card does not have an effect on your credit score. By going through the process of applying for a new credit card and opening the new account, you have already been approved for a certain credit limit, even if you never activate the card.

The key action that affects your credit score is applying for that card in the first place. During the process of applying for a new credit card account, your credit history has already been pulled and checked by the credit card issuer, and that "hard inquiry" may have an effect on your credit score.

2. Not Activating Your Card May Have Consequences

If you don't activate your card, there are a few things to watch out for that could sneak up on you.

Your card issuer may contact you if you haven't activated your card after a certain amount of time (typically 45 to 60 days) to determine if you received it. If you wait longer than that time period, you may need to request a new card.

Another thing to consider is of your card charges an annual fee. The fee is often charged on your first bill, and repeats annually on the anniversary of your account opening. If you forget about it, the fee can become a missed payment and can hurt your credit score.

Finally, if you don't activate a credit card and don't use the card, your account may be closed. Card issuers typically close accounts that aren't used within a certain time period, usually over a year. If this happens, it can impact your credit score.

3. Responsible Use Is Beneficial

Once you have the new credit card, any impact on your credit score — as a result of applying for the new credit account — has already occurred. So, as far as your credit score is concerned, any impact to your credit score happens as a result of applying for the card, not as a result of activating the card.

In many cases, it's how you use a credit card that really matters.

In some cases, opening a new credit account can give you a higher total credit limit, which can improve your credit utilization ratio — the percentage of your total available credit that you're using — so long as you don't rush to max out the new card.

Using your credit card responsibly to make occasional small purchases and paying the bill on time and in full can help you build credit history without incurring interest charges on purchases.

Closing your new credit card account might actually hurt your credit score, because it would reduce your total available credit and thus make your credit utilization ratio look higher to the credit reporting agencies.

If you're having doubts about whether you actually want your new card, you can always cancel it. But if you are confident that you can use the new card responsibly, and pay it off on time without accumulating debt, go ahead and activate it and proceed to use it wisely.

Instead of looking at a never-activated credit card as a possible threat to your credit score, think of the potential to use the card to help build your credit. The credit card issuer has already decided that you are creditworthy enough to receive the new card. As long as you can use your new credit limit responsibly, your new card can be a source of convenient spending, cash flow management, and can even help you build your credit over time.

Published June 27, 2017.

Updated September 10, 2021.