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How many hard inquiries are too many?
There isn’t a specific number of hard inquiries that’s considered too many. However, if you have lots of inquiries on your credit report, then prospective lenders may see you as a high-risk applicant and be less inclined to extend your credit.
Hard inquiries are an indicator that you’re looking for new credit. To lenders, they’re a warning sign that you may be in financial distress, and they’ll usually cause a drop in your credit score. For these reasons, try to minimize the number of hard inquiries on your credit reports by only applying for credit when you really need it.
How much does a hard inquiry affect your credit score?
How much a hard inquiry affects your credit score depends on the length of your credit history. Hard inquiries have a greater impact on your score if you have a short credit history or just a few credit accounts. 1
Typically, hard inquiries only take a few points off your credit score. In most cases, you’ll lose a maximum of five points off your FICO score and 5–10 points off your VantageScore credit score. 2 3
By comparison, factors like your payment history and credit utilization rate have a much larger effect on your credit score. For instance, being 30 days late on a payment can cause your FICO score to drop by over 80 points. 4
How do hard inquiries affect rate shopping?
FICO and VantageScore won’t penalize you for shopping around to find the loan with the best interest rate. Both scoring models have a grace period (sometimes called a “dedupe” period) during which multiple inquiries for the same type of credit are treated as a single hard inquiry.
In the newer FICO models, this grace period lasts 45 days, but it only applies to student loan, auto loan, and mortgage inquiries. 5 In the VantageScore models, this shopping period is 14 days, and it applies to all types of credit. 6
The models feature this grace period because FICO and VantageScore know that shopping around to find the best terms on a loan is normal behavior. It doesn’t imply that you present a risk as a borrower.
For similar reasons, hard inquiries don’t lower your credit score immediately in FICO’s model. There’s always a 30-day delay before they start affecting your score. This gives you the time that you need to shop around.
How long will a hard inquiry stay on your credit report?
Hard inquiries usually stay on your credit report for two years. 5 However, they’ll stop affecting your credit score after 3–6 months (VantageScore) to one year (FICO). 5 7 8
Unfortunately, you can’t remove a hard inquiry from your credit report early unless it’s an error (e.g., the credit bureau accidentally added someone else’s inquiries to your credit report). If you find any hard inquiries (or other negative marks) that you believe are mistakes, dispute the items on your credit report with the bureaus in question.
Managing the impact of hard inquiries on your credit
There are three ways to manage the impact of hard inquiries on your credit:
- Apply for credit only when you need it: The fewer credit accounts you apply for, the fewer hard inquiries you’ll receive and the fewer points you’ll lose. You’re also more likely to be approved for a loan if you don’t open too many accounts—seeking a lot of new credit in a short period of time may be taken as a red flag by potential lenders.
- Check if you’ve been pre-approved: If a lender has pre-approved you, it means they think you’re a good candidate for a loan or credit card. Formally applying will still trigger a hard inquiry, but if you’re pre-approved, your application is more likely to be successful, which may prevent you from needing to apply with other lenders. This will minimize the number of hard inquiries you receive.
- Monitor your credit: Use a credit monitoring service to regularly check how many hard inquiries are on your credit report. If you already have several inquiries, consider waiting before you apply for a new line of credit.
