Credit inquiries, also known as credit pulls or credit checks, occur when you or entity requests access to your credit report from a credit bureau or reporting agency. Credit inquiries provide information about who has accessed your credit report and for what purpose.
Hard inquiries
Hard inquiries occur when you apply for credit, such as a loan, credit card, mortgage, or other types of financing. These inquiries are initiated by lenders or creditors to assess your creditworthiness and determine whether to approve your application.
Hard inquiries can impact your credit score, typically by a few points, and they remain on your credit report for about two years. Having multiple hard inquiries within a short period of time can indicate a higher risk to lenders and may have a more significant impact on your credit score.
However, the impact of hard inquiries on your credit score dissipates within a couple of months, as long as additional hard inquiries do not occur. A regular pattern of hard inquiries can be an indication that you are a higher risk.
Soft inquiries
Soft inquiries do not affect your credit score and are not initiated by you. They occur when a person or entity accesses your credit report for informational purposes rather than for the evaluation of a credit application. Examples of soft inquiries include when you check your own credit report, when a potential employer checks your credit during a background check (with your consent), or when you receive pre-approved credit offers. Soft inquiries are not visible to lenders and do not impact your creditworthiness.
It’s important to note that checking your own credit report, often referred to as a personal or consumer inquiry, is considered a soft inquiry. It does not impact your credit score. It’s generally a good practice to monitor your credit report regularly to check for any inaccuracies or signs of fraudulent activity.
How long do hard inquiries on your credit report last?
Hard inquiries typically remain on your credit report for about two years. However, their impact on your credit score diminishes over time.
Initially, a hard inquiry may have a minor negative effect on your credit score, typically by a few points. But as time passes, the impact lessens, and after about 12 months, the inquiry is no longer considered in credit score calculations. While the inquiry itself may still be visible on your credit report for the full two years, it has less significance as time goes on.
How many points do hard inquiries take off of your credit score?
The impact of a hard inquiry on your credit score can vary depending on several factors, such as your overall credit history and the scoring model used. Generally, a single hard inquiry may cause a temporary decrease in your credit score by a few points. However, the exact point deduction can vary from person to person.
It’s important to note that the impact of a hard inquiry is typically minor and short-lived. The effect diminishes over time, and as you continue to demonstrate responsible credit behavior, any negative impact from the inquiry becomes less significant.
Furthermore, credit scoring models take into account that consumers may shop around for the best rates on loans, such as mortgages or auto loans. If multiple inquiries of the same type (e.g., mortgage or auto loan) are made within a specific timeframe (often referred to as a “rate shopping window,” typically 14 to 45 days), they are typically treated as a single inquiry for credit scoring purposes. This helps mitigate the potential negative impact on your credit score when you are shopping for the best loan terms.
Remember that while hard inquiries may have a temporary impact on your credit score, they are just one factor among many that contribute to your overall creditworthiness. Maintaining a good payment history, keeping your credit utilization low, and managing your overall credit responsibly are more significant factors in determining your creditworthiness.
Do multiple hard inquiries count as one on your credit report?
Multiple hard inquiries of the same credit type within a short period of time are counted as a single inquiry. For example, multiple inquiries from different lenders are typically counted as only a single inquiry if they’re made within the same 14 to 45 days.
The credit scoring agencies do not want to penalize you for shopping around for the best credit you can qualify for. So, they expect that when you are shopping for credit, there is likely to be more than one hard inquiry in a short amount of time.
Too many hard inquiries on your credit report over an extended amount of time can lower your credit score. It suggests that you’re a high-risk borrower.
How many hard inquiries is too many on your credit report?
Generally, having more than six hard inquiries on your credit report within a six-month period is considered too many.
While there isn’t a specific number that defines “too many” hard inquiries, having a high number of recent hard inquiries on your credit report can be seen as a red flag to lenders. It can suggest that you are actively seeking new credit and potentially taking on more debt, which could indicate financial instability or increased risk.
It’s important to note that the impact of hard inquiries on your credit score is temporary, and their significance diminishes over time. As you continue to demonstrate responsible credit behavior, the negative impact from hard inquiries becomes less significant.
In summary, while there isn’t an exact number that defines “too many” hard inquiries, it’s generally advisable to minimize the number of inquiries. You should also be mindful of rate shopping guidelines to avoid potential negative effects on your credit score.
How many is a lot of hard inquiries on your credit report?
Generally, having more than six hard inquiries within a six-month period is considered too many. Each inquiry affects your score only by a few points, but if you apply for, say, 10 credit cards within a two-month period, you can expect that to be a red flag to lenders.
However, rate-shopping for a particular loan may be treated as a single inquiry and have minimal impact on your creditworthiness.
Soft inquiries can occur when you check your own credit report or when a creditor checks your credit report for pre-approval purposes. Soft inquiries do not affect your credit score.
How do I fix too many inquiries on my credit report?
You can file a dispute with any of the three major consumer credit bureaus — Equifax, Experian and TransUnion. But only if they have an inaccurate hard inquiry recorded for you on its corresponding credit report.
Using the credit bureaus website to dispute the inquiries is easy and can solve the problem quickly. It is important to realize, though, that hard inquiries can only be removed if they are the result of identity theft. Otherwise, they’ll have to fall off naturally, which happens after two years.
In most cases, hard inquiries have very little if any impact on your credit scores—and they have no effect after one year from the date the inquiry was made. So when a hard inquiry is removed from your credit reports, your scores may not improve much, if at all.
If you have too many inquiries on your credit report and you want to mitigate their impact or have them removed, here are some steps you can take:
Focus on recent inquiries
Keep in mind that the impact of inquiries lessens over time. Older inquiries have less significance than recent ones. So, if you have a mix of recent and older inquiries, prioritize addressing the recent ones. Hard inquiries that are six months old or more are almost never worth the effort to have them removed. They simply have very little or no impact on your credit score.
Dispute inaccurate inquiries
Review your credit report for any inquiries that you believe are inaccurate or unauthorized. If you identify any errors, you can dispute them with the credit bureaus. Provide supporting documentation and explain why the inquiry is incorrect or unauthorized. The credit bureau will investigate your dispute and remove any inaccurate inquiries if they find them to be invalid.
Understand the rate shopping rules
If you have multiple inquiries for the same type of loan, such as a mortgage or auto loan, within a short period (typically 14 to 45 days, depending on the scoring model), they are usually treated as a single inquiry for credit scoring purposes. This means they have a reduced impact on your credit score.
Request removal from the creditor
While it’s not guaranteed, you can contact the creditors who made the inquiries and politely request that they remove the inquiry from your credit report. Explain your situation, such as if you were rate shopping or if you didn’t authorize the inquiry. While some creditors may not comply, it’s worth a try.
Patience and responsible credit behavior
Unfortunately, there is no immediate fix for removing accurate and authorized inquiries from your credit report. The most effective approach is to practice responsible credit behavior over time. Pay your bills on time, maintain low credit utilization, and focus on building positive credit history. As time passes and you demonstrate responsible credit behavior, the impact of the inquiries will diminish.
Remember that removing accurate and authorized inquiries from your credit report is challenging. It’s essential to focus on improving your overall credit profile by managing your credit responsibly and practicing good financial habits. Over time, the negative impact of inquiries will lessen, and you can build a stronger credit history.
How many points does a soft inquiry affect my credit score?
Soft inquiries, also known as soft pulls or soft credit checks, do not affect your credit score. When you check your own credit report or when a lender or creditor performs a soft inquiry for informational purposes, it does not impact your credit score in any way.
Soft inquiries are considered to be for informational purposes only and do not involve a review of your creditworthiness. They do not indicate that you are actively seeking new credit or taking on additional debt. As a result, they have no impact on your credit score or your creditworthiness.
It’s important to differentiate between soft inquiries and hard inquiries. Hard inquiries, which occur when you apply for credit, can have a temporary impact on your credit score. They typically result in a slight decrease of a few points. Soft inquiries, on the other hand, have no effect on your credit score whatsoever.
Monitoring your own credit report or allowing employers to perform background checks are examples of situations where soft inquiries occur. You can do so without worrying about any negative impact on your credit score.
How to remove hard inquiries from my credit report
The first thing to consider is that hard credit inquiries do not affect your credit score very much. If you are not regularly applying for new credit, the impact of hard inquiries on your credit score is likely to be minimal and that impact will lessen with each successive month. A hard inquiry will stay on your credit for 24 months. However, it’s not likely to have much impact after six months.
It is likely that it will take you just as long to remove the hard inquiry from your credit report as it would to lessen in importance over the following 90 days. Furthermore, your efforts may be wasted if you are attempting to remove legitimate inquiries that you initiated.
Steps for disputing
If you are intent on removing the hard inquiry from your credit report, you can follow these steps:
- Review your credit report – Obtain a copy of your credit report from each of the three major credit bureaus. You are entitled to one free credit report from each bureau every 12 months through AnnualCreditReport.com.
- Identify unauthorized or inaccurate inquiries – Carefully review each inquiry and make note of any that are inaccurate or unauthorized.
- Dispute unauthorized or inaccurate inquiries – File a dispute with the credit bureau(s) reporting the unauthorized or inaccurate inquiries. You can initiate a dispute online, by mail, or by phone, depending on the credit bureau’s specific process. The bureau’s sometimes limit online inquiry disputes but you can find each of them here: Experian, Equifax, and TransUnion.
- Follow up with the credit bureau – Stay in touch with the credit bureau to monitor the progress of your dispute. They should provide you with updates and inform you of the outcome of their investigation.
- Request removal from the creditor – If the credit bureau does not remove the inquiry or if the inquiry is accurate but you have a valid reason for its removal, you can contact the creditor who initiated the inquiry directly. Write a polite letter or make a phone call to the creditor. Explaining your situation and requesting that they remove the inquiry from your credit report. While it is not guaranteed, some creditors may be willing to accommodate your request.
- Be patient and monitor your credit report – Removing hard inquiries can take time, and the process may vary depending on the specific circumstances. Continuously monitor your credit report to ensure that the inaccurate or unauthorized inquiries have been removed. If they persist, you may need to escalate the matter further by contacting the credit bureau or seeking legal assistance.
Removal of accurate information is unlikely
It’s important to note that the removal of accurate and authorized inquiries is unlikely. It’s generally easier to focus on preventing unnecessary inquiries in the first place by being selective about credit applications and understanding the rate shopping rules for specific types of loans. This way, you can minimize the number of inquiries on your credit report and avoid the need for removal in the future.
Example of a letter to dispute a hard inquiry on your credit report
The following is a good template for a hard inquiry dispute letter. It covers the kind of information that you should have in the dispute.
[Your Name]
[Your Address]
[City, State, ZIP Code]
[Date]
[Credit Bureau Name]
[Credit Bureau Address]
[City, State, ZIP Code]
Subject: Dispute of Unauthorized/Inaccurate Hard Inquiry on Credit Report
Dear Sir/Madam,
I am writing to formally dispute a hard inquiry that appears on my credit report from [Creditor Name]. I have reviewed my credit report, and I believe this inquiry is inaccurate/unauthorized and should be removed from my credit history.
Below are the details of the inquiry that I am disputing:
Creditor Name: [Creditor Name]
Inquiry Date: [Date of Inquiry]
Reference Number: [Reference Number, if available]
Explanation of Dispute:
[Explain in detail why you believe the inquiry is inaccurate or unauthorized. Provide any relevant information or documentation to support your claim. For example, if you did not apply for credit with the creditor listed, mention that. Then explain how you believe the inquiry was made without your consent. If you have any evidence or supporting documents, such as letters or emails indicating your lack of involvement with the creditor, include copies of those as well.]
I request that you investigate this matter and remove the disputed inquiry from my credit report as soon as possible. According to the Fair Credit Reporting Act (FCRA), it is your responsibility to ensure that the information in my credit report is accurate and verifiable.
I also request that you provide me with written confirmation of the removal of the inquiry from my credit report once the investigation is complete. Please send this confirmation to the address provided above.
I appreciate your prompt attention to this matter and your cooperation in resolving this dispute. Please let me know if you require any further information or documentation from my end to assist in the investigation.
Thank you for your time and assistance.
Sincerely,
[Your Name]
Enclosures:
[List any supporting documents you are including, such as copies of letters or emails]
[List any additional enclosures, if applicable]
