There are several important things to understand about credit inquiries and how they affect your credit.
The following topics will help you better understand how credit inquiries work and what you can do about them.
Table of Contents:
What Are Hard Inquiries?
There are two types of credit inquiries.
A hard inquiry occurs when you are actively applying for some kind of loan. For example, when you apply for a credit card or mortgage, the lender will ask if they can pull your credit report and this will show up as a hard inquiry.
A soft inquiry occurs when either you pull your own credit or a creditor pulls your credit without your permission.
Do Hard Inquiries Hurt Your Credit?
Soft inquiries don’t negatively affect your credit score so it doesn’t matter how many are on your credit report. However, multiple hard inquiries can negatively affect your credit score because it indicates that you’re looking for credit.
How Long Do Hard Inquiries Stay On Your Credit Report?
Hard inquiries stay on your credit for 2 years. However, that doesn’t mean a hard inquiry negatively affects your credit for 2 years. Rather, a hard inquiry will only affect your credit for up to 12 months. Even then, hard inquiries only hurt your credit if you have several.
While hard inquiries can remain on your credit report for up to 2 years, I’ve seen them fall off after only 12 months.
You might be wondering what happens when you’re shopping for credit and your credit is pulled multiple times. An example of this is when you shop for the best mortgages rates and multiple lenders pull your credit.
Don’t worry about this because as long as they are pulled within 30 days, it will essentially only count as one hard inquiry.
How Does A Hard Inquiry Affect Your Credit Score?
A single hard inquiry isn’t going to hurt your credit score. In fact, even a couple probably won’t have any impact on your credit score. So, how many inquiries is too many? Well, once you hit 3 hard inquiries within 12 months, you’ll start to see a small hit on your credit score.
The point is that hard inquiries don’t have a huge impact on your credit score and you really shouldn’t worry about them. You’re better off dealing with negative entries on your credit report and removing collections and late payments.
Can I Remove Hard Inquiries From My Credit?
If you see a hard inquiry on your credit report that you don’t recognize you can probably have it removed from your credit report. Start by finding out who logged the inquiry by getting a copy of your credit report.
Next, write a letter to whoever is listed on the hard inquiry entry stating that you didn’t authorize them to pull your credit report and to remove it right away. In order to make sure you have everything in writing send the letter via certified mail.
Hard Inquiries Should Be the Least of Your Worries
Quite honestly, you shouldn’t worry much about hard inquiries because unlike other entries on your credit report they only remain for 2 years rather than 7 years. Additional, they only can hurt your credit score for up to 12 months.
That said, if you have other negative items on your credit report such as collections, charge offs, or late payments, I would recommend getting these removed from your credit report.
You can either do this yourself or hire a professional to remove the negative items. For this, I suggest you check out Lexington Law Credit Repair. They’ll take care of you. Give them a call at 1-844-764-9809 or Check out their website.