How Do Credit Inquiries Affect Your Credit Score?

Written By:

It’s a common misconception that all credit inquiries — or any time your credit report is pulled — hurt your credit score. This isn’t true, however. Only “hard inquiries” will take a toll on your score. Hard inquiries are occasions when your credit report is pulled for the purposes of extending you credit or a loan offer. So when you open a new credit card account or apply for a loan, a “hard inquiry” will be made on your credit report.

Build Better Credit

Sign up for our email newsletter, as building credit starts with understanding how credit works and how it affects your personal finances.
  • This field is for validation purposes and should be left unchanged.

A hard inquiry may negatively affect your credit score, but usually not by a lot. The exact amount of points isn’t known for sure, as credit bureaus closely guard the complex mathematical formulas they use to determine your credit score. However, about 10 percent of your score is determined by “new credit,” which includes credit inquiries. It’s quite common to see a 3-5 point deduction from your score for each hard inquiry.

There is an exception with hard inquiries, however, and that’s when you’re shopping for a home loan or car loan. If your credit report is pulled by several lenders within a short amount of time — generally within 30 days prior to scoring — those inquiries may be grouped together as one inquiry when it comes to your score (although they may be listed individually in the credit inquiry section of your credit report). So even though you may have had seven different lenders pull your credit report, your score will only get dinged once. Check out Bankrate for more info on loan shopping and credit.

In contrast to hard inquiries, “soft inquiries” also exist and will NOT affect your score at all. This is when you go directly to a credit bureau or a credit-related website like Quizzle and pull your credit report for your own educational purposes. The inquiry itself may show up on a future credit report, but it’s a soft inquiry and is not factored into your score.

[Free Resource: Check your free credit report and score]

If you’ve had a hard inquiry or two made on your credit report recently, don’t fret! If you use your credit responsibly, your credit score will rebound fairly quickly. Just continue to pay at least the minimum payments on ALL your credit cards and loans every month, and your score should fare well.

Find out what your credit score is now with your free (soft inquiry) credit report from Quizzle.