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Understanding Hard Inquiries and Their Impact on Your Credit Score
Hard inquiries on your credit report can affect your credit scores, but there’s no definitive rule for how many inquiries are too many. The impact of hard inquiries varies based on the reason for the inquiry and the type of credit score. Some hard inquiries may have minimal effect on your score.
Even when they do impact your scores, hard inquiries are generally a minor factor. To minimize their potential impact, it’s crucial to understand how, when, and which hard inquiries will affect your scores.
What Is a Hard Inquiry?
A hard inquiry occurs when someone checks your credit report before making a lending decision. These are also known as hard pulls because companies request and “pull” your credit report from one or more of the credit bureaus—Experian, TransUnion, and Equifax.
Credit bureaus only provide credit reports to companies with a legally defined permissible purpose, such as in response to a credit application.
Key Facts About Credit Inquiries
- They generally happen after you apply for credit.
- They only get added to the report that’s checked.
- They’re a minor scoring factor.
- Some hard inquiries won’t hurt your scores.
- Others will see them.
- They aren’t permanent.
How Do Hard Inquiries Impact Your Credit Score?
Hard inquiries can have no impact or a relatively small negative impact on your credit score, such as a drop of 10 points or less. The exact impact depends on your entire credit report and the type of credit score (FICO® Score or VantageScore®).
FICO® Scores and Hard Inquiries
- Considers hard inquiries from the past 12 months.
- Applies a 30-day buffer for student, auto, or home loan applications.
- Deduplicates specific hard inquiries within a 45-day window.
VantageScore Scores and Hard Inquiries
- Counts inquiries from the previous 24 months.
- Deduplicates most hard inquiries within a 14-day window.
How Many Hard Inquiries Is Too Many?
There’s no strict number of hard inquiries that’s too many, especially considering the credit scoring models’ rules for rate shopping. For example, if you’re buying a new car and apply for auto loans from multiple lenders within a 14-day period, FICO and VantageScore will treat all the inquiries as a single hard inquiry.
How to Avoid Too Many Hard Inquiries
To avoid having too many hard inquiries that hurt your credit scores, understand how credit scores treat hard inquiries and strategically apply for credit.
- Rate shop during a 14-day period.
- Get preapproved for personal loans and credit cards.
- Focus on other important scoring factors like paying bills on time and reducing credit card balances.
How to Remove Inaccurate Inquiries From Your Credit Report
You can’t dispute or remove legitimate hard inquiries. However, if you notice hard inquiries that don’t align with your credit applications, investigate further. Sometimes, a company may use an unfamiliar name or abbreviation, which isn’t necessarily an error.
If the hard inquiry is the result of identity theft, you have the right to dispute the inquiry and related fraudulent information. You can dispute most inaccurate information on your Experian credit report online, but you’ll need to contact Experian by phone or mail to dispute inaccurate hard inquiries.
Monitor Your Credit for New Inquiries
Check your Experian credit report for free and get complimentary credit report monitoring with real-time alerts, including notifications of new hard inquiries. You’ll also receive your FICO® Score for free, allowing you to track how new actions affect your score. If you’re looking for a new credit card or loan, you can get matched with offers based on your credit profile without a hard inquiry.
For any mortgage service needs, call O1ne Mortgage at 213-732-3074. We’re here to help you navigate your mortgage options with ease and confidence.
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