Impact of Credit Inquiries on Your Credit Score

Do Credit Inquiries Hurt My Score?

Your credit score is a vital component of your financial health, influencing your ability to secure loans, credit cards, and even housing.

One often overlooked aspect that can affect your credit score is credit inquiries. Understanding the impact of credit inquiries on your credit score can help you manage your credit more effectively and make informed financial decisions.

Let’s delve into what credit inquiries are, the different types, and how they can influence your credit score.

What Are Credit Inquiries?

Credit inquiries, also known as credit checks, occur when a lender or other entity checks your credit report.

These inquiries are recorded on your credit report and can affect your credit score depending on the type and frequency.

Types of Credit Inquiries

Credit inquiries are categorized into two main types: hard inquiries and soft inquiries. Each type has a different impact on your credit score.

1. Hard Inquiries

Hard inquiries occur when a lender checks your credit report as part of their decision-making process for lending you money. These inquiries are typically associated with applications for loans, credit cards, mortgages, and other forms of credit.

Key Characteristics:

  • Impact on Credit Score: Hard inquiries can slightly lower your credit score. Typically, a single hard inquiry can reduce your score by a few points.
  • Duration on Credit Report: Hard inquiries remain on your credit report for up to two years but usually only affect your credit score for the first year.
  • Multiple Inquiries: Multiple hard inquiries in a short period can have a more significant impact. However, credit scoring models often group multiple inquiries for the same type of loan (e.g., auto or mortgage) within a short period as a single inquiry to minimize the impact.
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2. Soft Inquiries

Soft inquiries occur when you or someone else checks your credit report for non-lending purposes. These can include background checks by employers, pre-approved credit offers, and personal credit checks.

Key Characteristics:

  • No Impact on Credit Score: Soft inquiries do not affect your credit score. They are only visible to you and not to potential lenders.
  • Common Occurrences: Checking your own credit report, employer background checks, and pre-qualification checks for credit offers are typical examples of soft inquiries.

How Hard Inquiries Affect Your Credit Score

The impact of hard inquiries on your credit score is generally minor, but understanding the specifics can help you manage them effectively.

1. Minor Score Reduction

Each hard inquiry typically reduces your credit score by a few points. While this might seem negligible, multiple inquiries in a short period can add up.

2. Temporary Effect

The impact of a hard inquiry diminishes over time. Most of the negative effect on your credit score wears off after a year, although the inquiry remains on your report for two years.

3. Multiple Inquiries and Rate Shopping

When shopping for the best rates on loans such as auto loans, mortgages, or student loans, multiple hard inquiries are often treated as a single inquiry if they occur within a specific timeframe (typically 14-45 days).

This practice, known as “rate shopping,” minimizes the impact on your credit score and encourages you to find the best loan terms.

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Managing Credit Inquiries

To maintain a healthy credit score, it’s important to manage credit inquiries wisely. Here are some strategies to help you do that:

1. Be Selective with Applications

Only apply for credit when necessary. Each application results in a hard inquiry, so avoid applying for multiple credit cards or loans simultaneously.

2. Monitor Your Credit

Regularly check your credit report to stay informed about the inquiries listed and ensure there are no unauthorized checks. offers free credit reports from each of the three major credit bureaus once a year.

3. Use Pre-Qualification Offers

Many lenders offer pre-qualification processes that involve a soft inquiry instead of a hard inquiry. This allows you to check your eligibility for credit without affecting your credit score.

4. Time Your Applications

If you need to apply for multiple types of credit, try to space out your applications to avoid the cumulative effect of multiple hard inquiries.

5. Understand Rate Shopping Windows

If you’re shopping for a mortgage, auto loan, or student loan, do your rate shopping within a short timeframe. This ensures that multiple inquiries are treated as a single inquiry, minimizing the impact on your credit score.


Credit inquiries are a normal part of financial management, but understanding their impact on your credit score is crucial. While soft inquiries have no effect, hard inquiries can slightly lower your score, especially if they occur frequently.

By being selective with your credit applications, monitoring your credit report, and timing your inquiries wisely, you can manage the impact of credit inquiries and maintain a healthy credit score.

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Awareness and proactive management of your credit inquiries are key to safeguarding your financial health and securing the best terms on future credit.

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D. Jessica

D. Jessica is a mum to two sweet little boys. She hoards children's books and sunglasses, and is a sucker for anything bright and shiny.

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