This article contains general information and is not intended to provide information that is specific to American Express products and services. Similar products and services offered by different companies will have different features and you should always read about product details before acquiring any financial product.
While there’s no such thing as too many hard credit inquiries, each hard inquiry can drop a credit score by a few points – and make the borrower appear riskier to lenders.
Open your mailbox — or inbox — on any given day and you might find at least one lending offer from a credit card company, bank, or car dealership promising savings, low APRs, or refinancing deals. Some may be well worth pursuing, but before filling out the paperwork, consider this: When you formally apply for a loan or credit, lenders will check your credit history with a “hard inquiry” — and every hard inquiry will usually cause a dip in your credit score.1
How many hard credit inquiries are too many? There’s no concrete answer. Depending on the situation, the more hard inquiries conducted for multiple lines of credit within a brief time window, the greater the impact on the applicant’s credit score, and the more likely a lender will deem the borrower too risky. The good news is, if the hard inquiries were incurred because you’re rate shopping to find the best loan terms, there are ways to minimize the impact.
Having your credit checked can temporarily lower your credit score, But how many hard inquiries from lenders and creditors is too much before it significantly impacts your score? Here’s what you need to know about credit checks and minimizing their effect on your credit score
What is a Hard Credit Inquiry?
A hard inquiry is when a lender checks your credit report before making a lending decision such as approving a credit card or loan application. These are also called hard pulls because the lender is pulling your credit report from one of the three major credit bureaus – Experian, Equifax or TransUnion.
Hard inquiries may lower your credit score slightly. However, they only affect your score for 12 months and then drop off your report. Too many hard inquiries in a short period can negatively impact your credit.
How Many Hard Inquiries is Too Many?
There’s no definitive number of hard inquiries considered too many. Credit scoring models account for rate shopping, when you apply for the same type of credit from multiple lenders to find the best terms. As long as the inquiries occur within 14-45 days they will only count as one inquiry.
FICO scores lump together mortgage, auto and student loan inquiries within 45 days as one. VantageScores deduplicate most types of inquiries within 14 days.
While rate shopping won’t drastically hurt your scores, too many hard inquiries from other types of credit applications may lower them. As a guideline, more than 2-3 inquiries per year could negatively impact your credit score.
Ways to Minimize Hard Inquiries
Here are some tips to avoid accumulating too many hard inquiries on your credit reports:
-
Only apply for credit you need – Don’t apply for multiple credit cards at once or take out loans for purchases you can’t afford.
-
Rate shop for mortgages, auto and student loans within a 14-45 day period to minimize the impact of multiple inquiries.
-
Get prequalified for credit cards and personal loans to see if you’ll get approved without a hard inquiry.
-
Allow 6-12 months between credit applications for revolving credit like credit cards.
-
Focus on improving other aspects of your credit – paying bills on time, lowering balances, etc.
-
Check your credit reports to make sure all inquiries are valid. Dispute any errors.
-
Sign up for credit monitoring to be notified when new inquiries occur so you can stay on top of your credit.
While the occasional extra inquiry from applying for useful credit likely won’t hurt your scores too much, having too many in a short timeframe can cause bigger damage. Monitoring your credit and only applying when you need to can help prevent unnecessary hard inquiries.
How Long Do Hard Inquiries Impact Your Credit?
Most credit scoring models only consider hard inquiries from the last 12 months when calculating your score. However, hard inquiries remain on your credit reports for 24 months before automatically dropping off.
The impact of a hard inquiry diminishes over time. A new inquiry may lower your credit score 5-10 points initially. But that effect lessens each month, and your score typically recovers in 6-12 months.
One inquiry falling off your report after 12 months isn’t likely to impact your score. But if you accumulated multiple inquiries, your score may increase once the oldest ones disappear.
Hard vs Soft Credit Inquiries
Not all credit inquiries affect your credit. Soft inquiries don’t impact your scores at all. These include:
-
Checking your own credit reports.
-
Potential lenders prequalifying you without a hard pull on your reports.
-
Background checks by employers or landlords.
-
Promotional inquiries from lenders marketing pre-approved credit offers.
Unlike hard inquiries, soft inquiries don’t appear on credit reports that lenders review. You can see them when you check your own reports, but they have no effect on your credit scores.
How Many Times Your Credit is Checked
On average, the typical US consumer has their credit report checked by potential creditors 4-5 times per year. But this varies greatly by the individual. Someone actively applying for new credit may have over 10 hard inquiries per year. Conservative borrowers with few applications may only have 1-2.
Ideally, aim to limit hard inquiries to fewer than 2-3 per year from new credit applications. Rate shopping won’t penalize your scores, so you can check with multiple lenders when applying for a mortgage, auto loan or student loan. Just keep other types of inquiries spaced apart to avoid excessive hard inquiries.
Being aware of how many times your credit is checked and the types of inquiries occurring is important. With some caution, you can apply for new credit you need without accumulating excessive hard inquiries that jeopardize your credit scores. Monitoring your credit reports is key, so you can stay informed of new activity and address any errors.
What Is a Hard Inquiry?
Whenever you or a legally authorized company, person, or organization obtains your credit information, it creates entries on your credit report known as inquiries. Those inquiries fall into two categories: soft inquiries and hard inquiries.
A hard inquiry occurs when you formally apply for credit, be it a new credit card, an auto loan, or a mortgage. In some cases, signing up for services like a cellphone account or utility may also trigger a hard inquiry. In these cases, you’re giving creditors the green light to contact one or more of the three national consumer credit bureaus — Experian, TransUnion, or Equifax — to access your credit report for details about your debts and payment history before determining whether to approve your application.1 Your credit history may also play a role in finalizing loan terms and interest rates. A hard inquiry may cause your credit score to drop temporarily by a few points.1
A soft inquiry occurs when you check your own credit report or when a business checks it without you requesting credit. For example, you might see a soft inquiry on your credit report after a credit card company sends you an unsolicited prequalification offer. Because a soft inquiry isn’t a determining factor in whether a creditor actually lends you money, it has no influence on your credit score.1 However, if and when you fill out the application for that prequalified card, a hard inquiry will ensue.
Why Rate Shopping Might Minimize the Impact of Hard Credit Inquiries
If you’re in the market for a loan and want to find the best interest rate, you’ll have to apply for quotes from multiple lenders — each of which may trigger a new hard credit inquiry. The good news is that these inquiries may be treated as a single hard inquiry as long as they’re all made within a short time span, usually 14 to 45 days depending on the credit scoring model.1 Both FICO and VantageScore models allow for this type of comparison shopping.4
Therefore, if you’re looking for a loan (e.g., a mortgage, auto loan, or student loan), rate shopping may have a nominal impact on your credit score, despite a cluster of multiple hard inquiries appearing on your credit report back to back. To boost your chances of a single-inquiry outcome, it’s a smart idea to conduct all rate shopping within a two-week window.1 To expedite the application process, make sure that you first gather all the necessary financial documents.
Note that this kind of bundled approach applies only to loans. Multiple credit card applications, even within a short window, may result in a greater negative impact, since each one will prompt its own hard inquiry.
When you fill out a loan or credit card application, the creditor will conduct a hard credit inquiry to determine your creditworthiness. Each hard inquiry may cause your credit score to drop by a few points. There’s no such thing as “too many” hard inquiries, but multiple credit inquiries within a short window of time can suggest that you might be a risky borrower. However, that’s not the case if you’re rate shopping for a loan, which is usually regarded as a single inquiry — as long as you conduct all rate shopping within a couple of weeks.
2 “How Do Credit Inquiries Affect Your FICO Score?,” myFICO
3 “How New Credit Impacts Your Credit Score,” myFICO
SHARE
Randi Gollin is a freelance writer and editor who has covered lifestyle and business topics for digital publications and tech and media brands. All Credit Intel content is written by freelance authors and commissioned and paid for by American Express.
How Many Times Do We Pull Your Credit
FAQ
How many times can you run your credit before it affects you?
The answer differs from lender to lender, but most consider six total inquiries on a report at one time to be too many to gain approval for an additional …
Is it true that every time you check your credit score it goes down?
Highlights: Checking your credit reports or credit scores will not impact credit scores. Regularly checking your credit reports and credit scores is a good way to ensure information is accurate.
Will 3 inquiries hurt my credit score?
Although a single hard inquiry might only hurt your credit scores a little, multiple hard inquiries could increase the impact. And an application can lead to a hard inquiry even if the creditor denies your application.Aug 30, 2024
Is 2 hard inquiries a year bad?
There’s no specific number of hard inquiries that’s too many or too few. Although some hard inquiries might hurt your credit scores a little, credit scoring models also ignore many hard inquiries when consumers shop for a new loan.