If you take out a loan for a car or get a new credit card, these credit pulls are reported as “hard inquiries” by the lender to the credit bureaus. If you have too many hard inquiries on your credit report, you are more likely to be turned down for a mortgage or other loans. So, it is crucial to know how long hard inquiries stay on your credit report.
In general, hard inquiries will fall off your credit report after two years. However, many lenders will not care about hard inquiries after the one-year mark, even if they are still on your report.
Prevention Is Worth a Pound of Cure
The best way to prevent having too many hard inquiries on your credit is to keep track of how many hard pulls you have in your credit history. You can easily keep a list for each time you apply for a new loan or credit card, mortgage or apartment lease. You want to keep your number of credit inquiries to less than 6 per year.
So if you rent an apartment, buy a washing machine and dryer on store credit, buy a car, and apply for two credit cards and a store credit card in the same month, you will not likely qualify for a student loan from a private lender anytime soon. It will also most likely be at least a year before mortgage companies will want you to buy a home.
What Does a Lender Look For?
Lenders want to know that you will pay back your loan. The best predictor of your future behavior is your past behavior. So, the underwriters will look at your past spending habits. If your patterns reflect the current models that predict bankruptcy or repossessions as likely, you will not get a loan. People with six inquiries or more on their credit reports can be up to eight times more likely to declare bankruptcy than people with no inquiries on their reports.
In addition to your report, the market changes can affect whether you will get loans in the future. If bankruptcy rates are high and even good credit risks are getting into debt trouble, you are less likely to get a loan regardless of your credit pulls.
How Much Do Credit Pulls Affect My Credit Anyway?
The fact is that hard credit inquiries do not affect your overall credit score as much as you might think. According to FICO, “The impact from applying for credit will vary from person to person based on their unique credit histories. In general, credit inquiries have a small impact on your FICO Scores. For most people, one additional credit inquiry will take less than five points off their FICO Scores.”
Credit pulls can affect you more if you have less of a credit history. Inquiries only make up about 10% of your score.
The Other 90%
Paying bills on time and keeping your debt to income ratio low makes up 90% of your credit score. Your ratio should be at no greater than 30% debt that you pay from your total income each month. You should also pay every bill on time and dispute any wrong information on your credit report.
You can get free credit reports from each of the credit bureaus every two weeks through 2025, so take advantage of that by keeping track of your credit each month when you sit down to pay your bills.
Make Disputes When Needed
The fact is that you can tell a car dealer not to do a credit check on you, but many will do it anyway. Always keep track of your credit pulls and dispute them if necessary. Especially if you are trying to buy a home, know that mortgage lenders are incredibly picky about any hard credit inquiries on your report.
Help For Consumer Credit Issues
If you are struggling with credit issues, including learning how to use credit, debt collectors, student loan debt, medical or other debt, we are here to help. Our network of consumer credit attorneys is knowledgeable and cares about the little guy. We know that big businesses and lenders often take advantage of consumers, so we fight for your rights against unethical credit practices. Contact us for a free consultation to see if we can help. If we take your case, you don’t pay until you win.