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Every time someone checks your credit report, the inquiry is logged.

That’s important because too many inquiries over an extended period of time can spell trouble for your credit score.

But what exactly are credit inquiries?

Types of credit inquiries

There are two types of credit checks: “hard” and “soft.” A credit inquiry’s impact on your credit score depends on the type of check and the interval between each inquiry.

 

Soft inquiries occur when a lender:

  • Prescreens you for credit.
  • Reviews your current account.
  • Performs a check for insurance purposes.

Soft inquiries also include background checks by prospective employers or when you request your own credit report.

Hard inquiries occur when you:

Having several hard inquiries bunched together — meaning within 45 days of each other — is better for your credit score than having many inquiries spread out over a long period of time.

Banks don’t count hard inquiries against you as harshly if they’re grouped together. It usually means that you are having your credit report checked as you make a major purchase, such as a house or car.

Lenders do not even see a soft inquiry on your credit report, making this type of credit search more desirable.

The good thing about a hard inquiry is that you have to authorize it. If you notice any unauthorized hard inquiries on your credit report, notify the company that made the inquiry, as well as the Federal Trade Commission and the three credit bureaus.

This could signal identity theft. In addition, you should dispute any unauthorized hard inquiries on your credit report with the three credit bureaus to have them removed.

How credit inquiries affect your credit score

How an inquiry affects your credit score depends on the type — hard or soft.

Hard inquiry

Hard inquiries cause your credit score to go down slightly, but if multiple hard checks are performed in a short span of time, the inquiries only count as one in their effect on your credit score.

A hard inquiry takes 24 months from the time it is initiated to come off of your credit report. Keep in mind that a hard inquiry only negatively affects your FICO score for the first 12 months after a lender makes the inquiry.

Soft inquiry

A soft inquiry occurs when someone runs a background check on you, such as when you’re trying to rent a home or hook up utilities.

In addition, a soft inquiry does not require your permission. Luckily, soft inquiries have no effect on your credit score.

How to get credit inquiries off of your credit report

There is really no quick way to get a hard inquiry off your credit report. A hard inquiry takes 24 months from the time it is initiated to come off of your credit report.

Keep in mind that a hard inquiry only negatively affects your FICO score for the first 12 months after a lender makes the inquiry.

To be sure, if you go to several lenders to get your credit checked for a major loan, make sure to do it around the same time — usually within 14 to 45 days of each other.

Keep in mind that applying for a credit card is considered an inquiry that is not grouped.

For best results, try to limit any hard inquiries to no more than two in a 24-month period. Hard inquiries add up over time, with anything over three negatively impacting your credit.

Having six or more hard inquiries can seriously affect your credit and label you as a major credit risk.

Conclusion

Make sure you know the type of inquiries that are being made on your credit so you understand the impact.

It’s especially good to keep track of the number of hard inquiries made on your credit, because they have a greater effect than soft inquiries.

Controlling the number of hard inquiries on your credit report can keep such checks from negatively affecting your credit and allow you to get the credit you need.

 

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