How Long Do Hard Inquiries Stay on Your Credit Report?
If you want to protect your credit score and ensure it stays as high as possible, then it’s important to know how different credit inquiries can appear on your credit report and change your credit score. Find out the difference between a soft inquiry and a hard inquiry and how to avoid exhausting your credit with too many credit applications.
Hard Queries vs. Soft Queries: What’s the Difference?
A credit inquiry occurs when a business runs a credit check to consider lending you money or offering you a line of credit. An inquiry can take place with your knowledge — such as when a car dealership runs your credit to check your rate — or without your knowledge, like when a credit card company checks your score to see if you’re eligible for a promotional offer.
Credit reporting agencies classify inquiries as either soft or hard. Whereas some credit bureaus list soft inquiries on credit reports, soft inquiries never impact your credit score. Hard inquiries, on the other hand, do appear on your credit report and can affect your credit score.
Soft inquiries are credit inquiries that don’t involve your credit being reviewed by a potential lender. Examples of soft credit inquiries include:
- Checking your own credit score
- Credit checks run by businesses to offer consumers special rates, such as a promotional credit account
- Inquiries by businesses that you have an existing credit account with, such as when you apply for new credit cards
Hard inquiries occur when a potential lender reviews your credit history to determine whether they’ll let you open a new account. Hard inquiries occur when you apply for credit, such as in the following examples:
- Auto loan
- Personal loan or student loan
- Mortgage loan
- Credit card
Transferring a balance of credit card debt might also incur a hard inquiry in your file.
How Do Credit Inquiries Affect Your Credit Score?
Inquiries make up 10% of your credit score, so their impact is relatively small. How much you can expect your score to change depends on your credit history. An inquiry might have a greater impact if you have few credit accounts or short credit history, or you have numerous inquiries. But most consumers see their score drop five points or less per inquiry, according to Fair Isaac, the company that created the FICO scoring model.
Although hard inquiries can affect your credit score for up to a year, their impact lessens within a few months, according to Experian.
Soft inquiries have no impact on your credit score.
Good To Know
Staying on top of the factors that impact your credit most will minimize the effect of inquiries on your scores. Payment history and credit utilization each account for 30% of your score, so paying on time and keeping balances low are vital to protecting your credit.
How Long Do Credit Inquiries Stay on Your Credit Report?
Hard inquiries stay on your credit report for two years. They only impact your credit score for one year, but creditors will see them and can use them to make credit decisions for as long as they remain in your credit report.
Whether lenders see soft inquiries in your report depends on the credit bureau.
How Do Hard Queries Affect Your Credit?
If you’re shopping for the best rate on a mortgage, student loan or car loan, the credit bureau will consider all inquiries made within a 14- to 45-day period, depending on the credit scoring model, as a single inquiry. Credit bureaus understand that you are trying to shop for the best rate, not open up several new lines of credit.
Multiple inquiries for credit cards or personal loans — or a variety of credit types — are treated differently because they indicate that you might be having financial difficulties. These inquiries appear individually and may impact a lender’s decision, according to Equifax.
How To Remove Hard Inquiries From Your Credit Report
If you find hard inquiries on your report that you didn’t authorize, dispute the error by calling or writing to the creditor to have it removed from your report. Otherwise, you can’t remove the inquiries, but you can minimize their impact.
Most importantly, avoid applying for credit you don’t need. When you do need it, research a few lenders ahead of time so you can apply to all of them at the same time — the longer the time between applications, the more they can impact your score.
Daria Uhlig contributed to the reporting for this article.
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