When you’re working on credit repair, or just trying to keep your credit score in good condition knowing how hard inquiries impact your score is important. Hard inquiries are also known as “hard pulls” and generally occur when a financial institution checks your credit when making a lending decision. Most commonly they take place when you apply for a mortgage, loan, or credit card. In most cases, you have to authorize them.
Hard Inquiry Credit Impact
A hard inquiry contributes a 10% negative impact toward your credit score. It can remain on your credit report for two years. The greatest impact is seen during the first 90 days. How much of a negative impact the inquiry has varies from person to person. The amount of positive data that is reporting and the length of time the credit files have been open are determining factors. An inquiry may impact you by 4 points, and another person by 6 points.
Hard Inquiries & Credit Cards
It’s important to know that applying for credit cards within a 90-day period can have a significant negative impact as your credit score will get “dinged” by every inquiry. A good rule to follow is to wait 90 days between each credit card you apply for.
Mortgage, Auto, and Student Loans
The good news is mortgage, auto, and student loan inquiries are looked at differently than all other types of credit inquiries. The credit score models take into consideration that consumers may want to “shop around” with these types of loans. Even though multiple inquiries will show on your credit report – mortgage, auto, and student loan inquiries within a 45-day period only count as one hard inquiry against your credit score.
Your credit score has a big impact on your financial well-being. Before applying for credit, take time to build your credit score. When you have strong credit, you improve your chances of being approved for the financial products you want at the best possible terms and rates. Working with a credit repair company can help you fix bad credit scores and put you in a position for long-term success with all of your credit-related decisions.
Give us a call today. We’d be more than happy to discuss any questions you may have.