Every time you apply for credit, a notation appears on your credit report. These inquiries affect your credit score and are displayed for anyone who pulls your credit. According to MyFICO, a person opening multiple lines of credit at once presents a greater credit risk. Fewer inquiries give the appearance of a lesser risk, as the consumer isn't looking for credit. Often, the inquiry immediately appears on your report -- and is definitely there within 30 days.
Types of Inquiries
Your credit report shows two types of credit inquiries: hard and soft. Hard inquiries appear every time you apply for credit. Soft inquiries occur when your existing creditors pull your credit during account reviews or for preapproval offers. You also see soft inquiries when you pull your own credit. Soft inquiries don't show on your credit report for your future creditors consideration.
Your Credit Score
According to MyFICO, a single credit inquiry can take up to five points off your credit score. As the number of inquiries increases, your credit score shrinks. Each inquiry stays on your credit report for two years from the date it appeared. An inquiry is generated at the time the creditor pulls your credit report -- however, it could take longer to show up on your credit report. Your FICO score does not include the inquiry from that pull in the credit score your lender gets.
Your FICO score does not penalize you for shopping for the best interest rate. When you're shopping for a mortgage, student loan or an auto loan, the scoring system discounts any inquiries made within the prior 30 days. The inquiry still shows on your credit report, but doesn't affect your score. The inquiry must have the same code such as auto or mortgage. Any credit card inquiries within the same time period are factored into your score.
With advances in electronic communication, expect your credit inquiries to appear in real-time on your credit report. Even if the reporting system lags behind, you aren't in for any nasty surprises with your credit score. When reviewing your credit report, you may notice duplicate or inaccurate inquiries. Inaccurate inquiries may be removed through the credit reporting agency’s dispute process.
- Bankrate: When Do Credit Inquiries Hit Score?
- MyFICO: Credit Inquiries
- Credit Karma: Hard Inquiries and Soft Inquiries
- Fair Isaac Corporation. "Credit Checks: What Are Credit Inquiries and How Do They Affect Your FICO Score?" Accessed May 30, 2020.
- Federal Trade Commission. "Fair Credit Reporting Act § 604. Permissible Purposes of Consumer Reports." Pages 10-12. Accessed May 30, 2020.
Leigh Thompson began writing in 2007 and specializes in creating content for websites. She has been published online in various capacities. Thompson has an associate degree in information technology from the University of Kansas and is working on a bachelor's degree in business and personal finance.