Your credit score may go down a few points after a hard credit inquiry, but only for a short time. How many points does one inquiry really cost you? Let’s take a closer look.
What Is a Hard Credit Inquiry?
A hard credit inquiry, also known as a hard pull or hard credit check, happens when a lender checks your credit report before approving you for new credit, such as a credit card, loan, or mortgage. This type of inquiry becomes part of your credit history and can be seen by other lenders viewing your report.
Soft credit inquiries, on the other hand, occur when you check your own credit or a lender does a preliminary check before pre-approving you These do not affect your credit score.
How Much Does One Hard Inquiry Drop Your Score?
A lot of people are afraid that a hard inquiry will really hurt their credit score. But most of the time, it doesn’t have much of an effect, especially if you have a long history of good credit.
Most people use FICO to figure out their credit scores, and they say that a single hard inquiry only lowers scores by about five points. And if you have good credit, it might not hurt you as much.
VantageScore, another popular credit scoring model, says one inquiry can lower your score by up to 10 points. But again, the actual impact often smaller.
That being said, one inquiry won’t really hurt your score, but too many in a short amount of time can add up and become a problem.
Why Do Inquiries Lower Your Credit Score?
When lenders review your credit report, they want to see responsible credit behavior. An influx of inquiries may make them question whether you’re taking on more debt than you can reasonably manage.
From their perspective, a high number of inquiries suggests:
- You may be desperate for new credit or short on cash
- You may be overextending yourself with new accounts and payments
- You may not be able to keep up with repayment obligations
None of these are positives in a lender’s eyes. Too many new inquiries can indicate greater risk, making you look like a less reliable borrower.
How Long Do Inquiries Impact Your Credit Score?
The good news is that hard inquiries don’t ding your credit forever. Their impact decreases over time.
According to FICO, inquiries can stop affecting your credit scores within as little as six months. But it’s more typical for the impact to fade after about one year.
Yet inquiries can remain on your credit reports for two years from the date they occurred. Even if you no longer see the score impact after 12 months, other lenders can still view inquiries up to 24 months old when reviewing your report.
Tips to Minimize the Impact of Hard Inquiries
If you need to apply for new credit, there are a few strategies that can help minimize scoring dips from hard inquiries:
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Space out applications. Avoid applying for multiple credit accounts in a short period. Spreading out applications gives previous inquiries time to “age” and fall off your reports.
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Prioritize your credit health. Only apply when you’re confident you’ll get approved, rather than submitting multiple speculative applications that generate inquiries but no new credit.
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Shop for big loans wisely. For mortgages and auto loans, credit scoring models count multiple inquiries from rate shopping as just one inquiry over a designated window of time (typically 14-45 days). So limit applications to a narrow shopping period.
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Lean on existing credit. Using existing accounts responsibly helps offset inquiry impacts. So avoid new accounts unless absolutely necessary.
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Request credit limit increases. Asking your current card issuer for a higher limit results in a soft inquiry that doesn’t affect your score. Higher limits help keep utilization low as card balances grow.
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Improve your credit history. Payment history and credit utilization have a much bigger influence on your scores than inquiries. Keep balances low and make payments on time.
The Takeaway
A single new credit application and resulting hard inquiry is unlikely to dramatically damage your credit score, particularly if your credit history is otherwise solid. But letting too many inquiries accumulate can negatively impact your credit standing.
Being strategic about new credit applications allows you to protect your credit scores while still accessing new accounts as needed. By understanding exactly how much one inquiry can cost you, you can make informed decisions about applying for credit.
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Generally speaking, the stronger your credit history and credit scores, the less you need to worry about the impact from a single inquiry. If your credit scores are marginal and you are looking to improve them, here are some things you can do:
- Make all payments on time. Your payment history is the biggest factor in your credit scores. The best thing you can do for your scores is to make sure every payment is on time and to bring any past due accounts current.
- Keep your credit card balances low. Your utilization rate is also an important factor in credit scores. The lower your balances on revolving accounts, the lower your utilization rate will be. Low utilization rates are good for credit scores.
- Sign up for Experian Boost®ø. Experian offers a free tool called Experian Boost that can help you increase your FICO® ScoresΠinstantly by giving Experian permission to link to your bank account and add your monthly utility and cell phone payments to your credit report. Signing up is fast and easy, and youll get your new credit score right away.
Thanks for asking, Jennifer White, Consumer Education Specialist
Quick AnswerYou can expect a hard inquiry to temporarily decrease your credit score by five points or less, according to FICO. But if you have good credit, your score may drop less than that.
According to FICO, a hard inquiry from a lender will decrease your credit score five points or less. If you have a strong credit history and no other credit issues, you may find that your scores drop even less than that. The drop is temporary. Your scores will bounce back up again, usually within a few months, assuming everything else in your credit history remains positive.
There are two types of inquiries on a credit report, often referred to as “hard” and “soft:”
- Hard inquiries occur when a lender checks your credit report because of an application for goods or services, so they may affect your credit score.
- Soft inquiries are usually initiated by others, like companies making promotional offers of credit or your lender conducting periodic reviews of your existing credit accounts. Soft inquiries also occur when you check your own credit report or when you use credit monitoring services from companies like Experian. These inquiries do not impact your credit scores.
When you are shopping for a new loan, such as for a home or a car, your information may be sent to multiple lenders to try to find you the best rates and loan terms. You will see a separate inquiry on your credit report from each of these lenders, but your credit score wont be penalized for each one. Most credit scores will count multiple inquires for mortgage or auto loans as one if they are made within a certain period of time (14-30 days). Some scores do the same for other types of lending.
Possibly. It depends on the lender and their policy for how they treat that request. Some lenders may treat it as an application for new credit or additional credit and require a new credit report be accessed, which will then display as a hard inquiry. Others may approve the request without pulling your credit report or by doing whats called an “account review,” which will appear on your report as a soft inquiry. If you are concerned, its best to ask your lender before applying for a higher credit limit.
How long Hard Inquiry Stays on YOUR Credit Report (& how long a Hard Pull affects YOUR credit score)
FAQ
What is a hard inquiry?
A hard inquiry, also called a hard pull or hard credit check, requires your consent. It starts when you try to get credit for things like a mortgage, credit card, auto loan, student loan, or personal loan. It doesn’t happen if you are only looking for pre-qualification to decide whether to apply.
How many points does a hard inquiry deplete a score?
A single hard inquiry will drop your score by no more than five points. Often no points are subtracted. However, multiple hard inquiries can deplete your score by as much as 10 points each time they happen. Is it OK to have 3 hard inquiries?.
How much does a hard inquiry affect your credit?
How much a hard inquiry hurts your credit depends on many things, such as what your credit score was before the inquiry. Experian notes that on average, a hard inquiry can bring your score down 5-10 points. If you have excellent credit and no other issues, the drop might be even less.
What happens if you get a hard inquiry from a lender?
According to FICO, a hard inquiry from a lender will decrease your credit score five points or less. If you have a strong credit history and no other credit issues, you may find that your scores drop even less than that. The drop is temporary.
How long does a hard inquiry stay on your credit report?
A hard inquiry will remain on your credit report for about two years, but it stops affecting your credit score in less than a year. When your score changes, our app tells you why — and suggests what to do in the future. How does a hard inquiry affect your credit score? A single hard inquiry can shave up to 5 points off your FICO score.
What is a hard or soft inquiry?
Any inquiry that may impact your credit scores is known as a “hard” inquiry. These inquiries are shown to others who order your credit reports. Other inquiries are only shown to you when you order your own credit reports. They are not used when credit scores are calculated. They are called “soft inquiries. ” Soft inquiries include credit checks by:
Why did my credit score drop 40 points for a hard inquiry?
You applied for a new loan, which resulted in a hard inquiry. You’ve increased your credit utilization, perhaps by maxing out your credit cards. Often, a sudden 40-point decrease in your credit score is the result of two or more of these actions happening all at once or close together.
How bad is 3 hard inquiries?
There’s no specific number of hard inquiries that’s too many or too few. Although some hard inquiries might hurt your credit scores a little, credit scoring models also ignore many hard inquiries when consumers shop for a new loan.
How many points is a hard inquiry for a car?
Key Differences Between Hard and Soft Pulls for Auto LoansFeatureHard PullImpact on Credit ScoreCan cause a small dip (5-10 points)When it HappensWhen applying for an auto loan or financingVisibility to LendersVisible to other lendersDuration on Credit ReportStays for up to 2 years.
Can your credit score go up 100 points in a month?
For most people, increasing a credit score by 100 points in a month isn’t going to happen. But if you pay your bills on time, eliminate your consumer debt, don’t run large balances on your cards and maintain a mix of both consumer and secured borrowing, an increase in your credit could happen within months.