Whenever you apply for credit, the lender will request your credit report. When the lender does so, an inquiry is marked on your credit report and will remain on your report for two years.
Inquiries have the potential to impact your credit scores. But not all inquiries are the same, and some can matter more than others. Credit bureaus record two types of credit inquiries, also referred to as "pulls": hard and soft.
How Long Do Hard Inquiries Stay on Your Credit Report?
Multiple inquiries in a short period of time may affect your FICO® Score more substantially, but as time goes by, the impact of each pull is lessened. Soft inquiries also remain on your report for two years, but they do not impact your credit scores and can only be seen by you with a couple of exceptions.
Soft inquiries on your credit report are only visible to you, except: (1) insurance companies may be able to see other insurance company inquiries; and (2) inquiries by debt settlement companies you have authorized to access your report may be shared with your current creditors.
These inquiries have no effect on your credit score as they are never considered as a factor in credit scoring models. Soft inquiries are not disputable but are available for reference.
What Is a Hard Inquiry on Your Credit Report?
A hard inquiry shows up on your report if you authorize a lender to pull your credit when applying for a loan or credit account. Hard pulls remain on your report for 24 months but typically stop impacting your score after a year.
What Is a Soft Inquiry on Your Credit Report?
Soft inquiries do not impact your credit scores and occur when a lender pulls your score without you directly applying for a loan. If you have ever received a credit card offer or pre-approval notice in the mail from a lender, those are the result of a soft pull.
Soft inquiries also occur when you request your own credit report. While soft inquiries remain a part of your credit history for two years, they can only be seen by you and do not impact your credit scores.
How Are Inquiries Counted When You Are Shopping for a Loan?
There are some exceptions to this rule, like when shopping around for the best mortgage or auto loan. Often, when these multiple inquiries happen in a certain period of time—usually around 14 days—they are counted as one inquiry.
In other cases when multiple inquiries are recorded on your report, lenders may view your repeated requests as a sign of risk. Multiple pulls in a short period of time may show that you are having financial difficulties, and lenders want to be sure you are not over-extended before they give you any new debt.
According to FICO®, the statistics show that people with six or more inquiries on their report can be up to eight times more likely to declare bankruptcy than someone with no inquiries.
How Much Does a Hard Inquiry Lower My Credit Scores?
Unlike soft inquiries, hard inquiries appear on your credit report for 24 months and can slightly reduce your overall credit score for up to a year. Inquiries are marked on your report as requests for new credit, and when you receive too many of them in a short period of time, lenders may see that as a sign of risk.
While it is better for your credit scores to limit the number of hard inquiries on your report overall, the number of hard pulls on your credit reports plays a small role in calculating your scores.The FICO® Score powered by Experian considers your payment history, amounts owed, length of credit history, different types of credit you have and new credit all when calculating your score.
Inquiries fall into the last category of "new credit," but according to the FICO® scoring method, past inquiries are not nearly as important as making on time payments and having limited overall debt.
Can Inquiries on My Credit Report Be Disputed?
Credit bureaus typically do not remove accurate hard inquiries from credit reports, however, if a company pulled your credit without your permission or by mistake, you can contact the bureau to and ask them to remove the inquiry from your file.
Hard inquiries that appear on your credit score when you haven't applied for a new loan could also be an indication that someone other than you is using your personal information. Monitoring your credit report and the number of inquiries you have can be helpful in protecting yourself from the damage of this type of identity theft.
What Should I Do to Manage My Credit Inquiries?
Beyond protecting yourself from identity theft, knowing how many hard inquiries are on your credit report can help you with other aspects of your personal finances. If you are planning on applying for a mortgage or larger loan, having fewer hard inquiries on your report might make you a more attractive applicant.
Here are some steps you can take to better manage hard inquiries and their impact on your credit score:
- Make sure all of the hard inquiries listed on your report are accurate and authorized by checking your own credit reports.
- If you are planning on applying for a large loan, limit the number of times you ask for credit in surrounding months.
- Make sure to pay bills on time and keep overall debt amounts as low as you can.