Your credit score plays a huge role in your financial life—it determines whether you’ll get approved for loans, what interest rates you’ll pay, and sometimes even whether you can rent an apartment or land a job. But many people don’t realize that something as small as a credit inquiry can influence their credit score.
Table of Contents
If you’ve ever applied for a credit card, auto loan, mortgage, or even a cell phone plan, you’ve likely encountered a credit inquiry. While inquiries are just one of many factors that affect your score, understanding how they work can help you make smarter financial decisions.
In this guide, we’ll explore:
- What credit inquiries are
- The difference between hard and soft inquiries
- How credit inquiries affect your score
- How long do inquiries stay on your report
- Myths vs. facts about inquiries
- Tips to minimize negative impact
By the end, you’ll have a complete understanding of how inquiries influence your credit profile and how to manage them wisely.
What Are Credit Inquiries?
A credit inquiry happens when someone checks your credit report. This can be you, a lender, an employer, or a landlord. The inquiry is recorded on your credit report, but not all inquiries affect your score.
There are two main types of credit inquiries:
- Soft Inquiry (Soft Pull):
- Doesn’t impact your credit score.
- Examples: checking your own credit, pre-approved credit card offers, and background checks by employers.
- Hard Inquiry (Hard Pull):
- It can affect your credit score.
- Happens when a lender checks your report as part of a credit application (credit card, car loan, mortgage, etc.).
Understanding the difference between these two is key to knowing how your score is affected.
Hard Inquiries vs. Soft Inquiries
| Feature | Soft Inquiry | Hard Inquiry |
|---|---|---|
| Impact on score | None | May lower score temporarily |
| Who sees it | Only you | Lenders, creditors, and you |
| Common situations | Pre-qualification, background checks, checking own score | Duration of report |
| Duration on report | Not shown to lenders | Visible for 2 years |
How Do Credit Inquiries Affect Your Score?
Hard inquiries can slightly lower your credit score because they signal that you’re seeking new credit. The impact depends on several factors:
- Number of Inquiries:
- One hard inquiry usually lowers your score by 5 points or less.
- Multiple inquiries in a short period can have a bigger effect.
- Credit Profile Strength:
- If you have a long credit history and a strong score, inquiries affect you less.
- If you’re new to credit or have a weak profile, inquiries can have a larger impact.
- Timing of Inquiries:
- FICO and VantageScore consider multiple inquiries for the same type of loan (e.g., mortgage shopping) within a short time frame as one inquiry to encourage rate shopping.
Example:
- Applying for one credit card = -5 points.
- Applying for 4 credit cards in a week = potential -20 points.
- Shopping for a mortgage with 5 lenders within 30 days = treated as one inquiry.
How Long Do Inquiries Stay on Your Credit Report?
- Hard inquiries: Stay for 2 years, but their effect on your score usually fades after 12 months.
- Soft inquiries: Not visible to lenders, only to you, and don’t affect your score at all.
Do Inquiries Mean You’re Risky?
Not necessarily. Inquiries alone don’t label you as risky, but too many inquiries in a short period can suggest you’re desperate for credit, which lenders might see as a red flag.
For example:
- One or two inquiries per year = normal.
- 10 inquiries in 3 months = risky behavior, signaling financial instability.
Myths vs. Facts About Credit Inquiries
Myth 1: Checking your own credit hurts your score.
Fact: Checking your own credit is a soft inquiry and has no impact.
Myth 2: All inquiries are bad.
Fact: Only hard inquiries can lower your score, and even then, only slightly.
Myth 3: Inquiries ruin your chances of approval.
Fact: One or two inquiries are harmless if the rest of your credit report is strong.
Myth 4: Closing accounts removes inquiries.
Fact: Closing an account doesn’t erase the inquiry. It remains for up to 2 years.
How Much Do Inquiries Really Matter?
Credit inquiries only make up about 10% of your FICO score. That means:
- Payment history (35%)
- Amounts owed (30%)
- Length of credit history (15%)
- Credit mix (10%)
- New credit (10% – includes inquiries)
So while inquiries do matter, they’re much less important than paying your bills on time or keeping your balances low.
How to Minimize the Impact of Credit Inquiries
- Apply for Credit Only When Necessary
Don’t apply for multiple credit cards or loans at once. Be selective. - Shop Smart for Loans
- If you’re rate shopping for mortgages, auto loans, or student loans, do it within a 14–45 day window.
- This way, multiple inquiries count as one.
- Check Pre-Qualification Offers
Many banks offer pre-qualification with only a soft inquiry. This helps you see your chances without hurting your score. - Space Out Credit Applications
Apply for new credit every 6–12 months instead of all at once. - Build a Strong Credit Profile
With excellent payment history and low debt, the effect of inquiries will be minimal.
What to Do if You Have Too Many Inquiries
- Wait it out: Most impact fades within 12 months.
- Focus on other factors: Keep balances low and pay on time.
- Dispute unauthorized inquiries: If you didn’t authorize a hard inquiry, you can request removal by contacting the credit bureau.
FAQs About Credit Inquiries
Q1. How many inquiries are too many?
More than 5–6 in a short period (3–6 months) can raise concerns.
Q2. Can employers see my inquiries?
Employers may see a version of your report, but not your score or most inquiries.
Q3. Will inquiries affect my ability to get a mortgage?
One or two won’t matter much, but several recent credit card inquiries could raise questions.
Q4. Do all lenders treat inquiries the same?
No. Some lenders are stricter than others, especially for credit cards and personal loans.
Q5. Can I remove old inquiries myself?
Only inaccurate or unauthorized inquiries can be removed. Legitimate ones must stay until they expire.
Real-Life Example
Imagine Sarah, who applies for:
- 2 credit cards in March
- 1 car loan in April
- 1 personal loan in May
That’s 4 inquiries in 3 months. Her score drops by about 20 points. However, since she pays her bills on time and keeps balances low, her score recovers within 6–8 months.
Moral: inquiries have a short-term impact, but long-term credit habits matter most.
Conclusion
Credit inquiries are a normal part of financial life. A single hard inquiry might lower your score slightly, but it won’t ruin your chances of getting approved if you have a solid credit history. The real key to strong credit is responsible borrowing—paying bills on time, keeping balances low, and applying for new credit only when needed.