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How Credit Inquiries Affect Your Credit Score

One of the most common questions I receive is how an inquiry can affect a credit score.  It’s interesting that people focus on this particular area given that, compared to paying bills on time and keeping credit balances relatively low, inquiries have relatively little impact on your credit score.

First point—there are many different types of inquiries and they don’t all count.

By submitting an application when you apply for credit, you typically give the lender permission to request a copy of your credit report, which helps them make their credit approval decision (check the fine print on the application).  This is called a credit inquiry, and those credit inquiries in which you initiate the request for credit may affect your credit score. These types of credit inquiries are often referred to as hard inquiries .

You may notice other types of inquiries on your report.  Inquiries associated with pre-approved credit card offers, an employment check, when you ordered a copy of your credit report, or ones posted by your current bank when they conduct a quarterly customer review update—these are all considered non-consumer initiated requests for credit—or soft inquiries —and are not factored into your score calculation because they do not reflect that you are proactively seeking new credit.

Second point—only recent inquiries are considered.

Inquiries remain on your credit report for 24 months.  However, most credit scores only consider more recent inquiries—those taking place in the last 12 months, for example.

Third point—credit scores include special logic to accommodate for rate shopping.

For credit that commonly involves rate-shopping (such as mortgage, auto and student loans), most credit scores have special logic to treat these types of inquiries uniquely.  This logic was created to accommodate for the way the credit-seeking and lender review processes work for these certain industries.

Using the FICO score as an example, the scoring model uses a special inquiry logic that incorporates a buffer period and an inquiry de-duplication process to eliminate duplicate or related inquiries when you rate shop for the best deal on a mortgage, auto or student loan.

1. The model will ignore any inquiries related to mortgage, auto or student loans that have been posted on your credit report in the last 30 days.

2. In addition, the score looks at your credit report for rate-shopping inquiries older than 30 days. If it finds some, it counts those inquiries that fall in a typical shopping period as just one inquiry when determining your score (14-day span for older FICO versions and 45-day span for the newest versions of the score).

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Tom Quinn is Vice President of Scores at FICO (Fair Isaac), and has more than 25 years of experience in the credit industry with previous positions at FICO, Nomis Solutions, MDS (now known as Experian) and Citibank.

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Why are soft inquiries allowed? I have many of these on my credit report from businesses I have never heard of and some are even located out of my home state. Businesses that I have absolutely no connection or interest with their product have made soft inquiries and this concerns me as to how they get permission. Talk about invasion of privacy, this is the worst in my opinion.

Chim — Soft inquiries like these are marketing inquiries and you actually have the right to “Opt Out.”

To “opt out” of prescreen offers and remove yourself from unsolicited marketing mailings, visit or call 1-888-5OPTOUT (1-888-567-8688). You’ll have two options — you can opt out for five years, or you can opt out permanently. To opt out for five years, simply follow the instructions online or call the toll-free number. To opt out permanently, you’ll need to sign and return a Permanent Opt-Out Election form as part of the online request process.

I was told that when I test drive a new car & have to leave my drivers license with the dealership that this affects my credit rating. I have not committed to buying a vehicle just a test drive. Thanks Credit Experts

Hi Rebecca — Each lender varies on when they report updates to the credit reporting agencies but with credit card issuers specifically, they usually update once a month around the same time your statement drops. You can read more about this here:

If you want to be sure, though, the only way to know when a lender reports is to contact the lender directly and ask when they’ll report the update to the credit reporting agencies.

As soon as the information is updated in your credit report, the credit score will reflect the change — credit scores are based on the information in your credit report at that particular moment in time. As the information in your credit report changes, your credit scores will reflect those changes.

Paying off all of your revolving credit card debt will absolutely have an impact on your revolving utilization percentage and help your scores. How much it will help really depends on how high your current utilization is and the reason codes (the reasons provided that tell you why your score wasn’t higher). These reason codes are returned in the order of importance so the first reason code tells you where you lost the most points, the second where you lost the second to most points, and so on.


I’m 20 and trying to build my credit so I’ve applied for and been approved for 3 department store cards and 1 amazon visa rewards card. (This was all in 2 months time) will it hurt me getting that many in a short amount of time?

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