It basically works like this. When you apply for a credit card the credit card company will notify the credit reporting agency. Then general understanding is that each time you apply you loose around five points of your total credit score.
The more applications you make the worse it gets and worse it looks. Let me explain why this occurs. Let’s say you are the bank manager and someone comes to you to get a credit card which is basically a short term loan.
Once you look at their credit you see that there has been multiple inquiry’s over a short period of time. This raises a red flag, A/ because if they were given the loan from their previous applications they would not be sitting in front of you looking for money.
B/ it indicates that they are desperate for money and this normally means that their financial circumstances may not be very good. As a result of this you, the banker, would proceed with caution.
You would do this by examining their credit report in greater detail. You would also want far more documentation in terms of employment and references. Besides that due to numerous applications the credit score would be going down indicating further risk.
So understand why credit scores are there and how they are calculated. Furthermore understand that making multiple inquiries over a short period of time will do nothing but run your credit score down and reflect poorly on your ability to pay back the loan.
Last but not least, understand that credit means one thing and that is debt, if you have no debt you essentially have no credit.