The formula that generates a FICO credit score is made up of several components.

Some of these components you would expect to see, such as paying your bills on time. But there is one component that takes a lot of people by surprise: credit inquiries.

A credit inquiry is recorded every time somebody “inquires” about, or gets a copy of, your credit report. This can happen, for example, when you apply for a credit card or loan.

New creditors pull a copy of your credit file to evaluate your loan application. Existing creditors also pull your credit report from time to time. They do this to see if there have been any significant changes to your credit history.

So, why should we care about credit inquiries? Because some inquiries can lower your FICO credit score. And this raises several questions:

  • When does an inquiry lower your credit score?
  • By how much does an inquiry lower your credit score?
  • How long do inquiries remain on your credit report?
  • How can you determine what inquiries are currently on your credit report?
  • Does shopping around for credit result in multiple, negative inquiries?
  • Does getting a copy of your own credit file lower your score?

We’ll take a look at each of these questions. But first, let’s address a fundamental issue: why do credit inquiries have an effect on our FICO scores at all?

Why Credit Inquiries Matter

First, we need to understand what the credit score formula is all about in the first place. Credit scoring formulas like FICO’s are all about one thing: protecting lenders.

The goal of any credit score is to calculate how likely any one consumer is to default on new credit extended to them. So, if you have a low score, you’re statistically more likely to default on a loan than someone in the 800+ range.

(This, by the way, is why on-time payments are so important. If you have a habit of making late payments, you’re much more likely to keep doing that in the future!)

Once you understand that, the issue of credit inquiries and why they matter makes a whole lot more sense.

Related: 8 Top Reasons Why Your Credit Score Changes

Imagine you run into some financial troubles. To help pay the bills, you apply for several credit cards in a short period of time.

Sure, you may bounce back quickly and be able to repay the debt easily. But applying for that many cards in a small time frame isn’t a good sign of solvency. That’s why inquiries can lower your FICO score.

Of course, just because somebody applies for multiple credit lines in a short period of time doesn’t mean they are in financial trouble. As we’ll see below, the FICO formula attempts to distinguish between inquiries that reflect financial strain, and those that do not. Fair Isaac, the company behind the FICO score, explains the rationale as follows:

When does an inquiry lower your credit score?

A credit inquiry shows up on your credit report every time you apply for a credit account. When you apply for credit, you authorize creditors to ask or “inquire” for a copy of your credit report from the major credit bureaus. Whether you are denied or approved for the credit account does not matter. But what does matter is the type of inquiry.

There are two general types of credit inquiries: “soft” inquiries and “hard” inquiries. These are also referred to as soft pulls and hard pulls (pull comes from the creditor “pulling” your credit report).

  • A soft pull, also known as an involuntary inquiry, occurs when creditors want to send you pre-approved offers. That credit card solicitation you received in the mail was probably the result of a soft pull on your credit. Other soft pulls include potential employers checking your credit report. When an existing creditor checks your report, that’s also a soft pull. And if you check your own credit score, that’s also considered a soft pull, too. The key here is that a soft pull does not affect your credit score in any way.
  • A hard pull, also known as a voluntary inquiry, occurs anytime you actively seek credit by filling out an application. The lender will run your credit report and determine whether to approve your credit application and under what terms. A hard pull on your credit report will affect your credit score.

Related: Credit Inquiries 101: A Complete Guide to a Hard vs. Soft Pull

By how much does an inquiry lower your credit score?

Several factors determine the effect an inquiry has on a FICO score. Some relate to the nature of the inquiries, and some relate to your credit history. The good news is that generally, inquiries have a small impact on your FICO score.

For most people, a single inquiry will reduce their FICO score by a very small amount.

But here’s the thing: different types of hard inquiries affect your score differently. Applying for multiple revolving accounts (like credit cards) in a short amount of time could be a bigger risk. So, this move could negatively affect your score more heavily.

But what about non-revolving accounts, such as car loans or mortgages? These are the types of loans for which you’re more likely to rate shop. In fact, it’s pretty irresponsible to take out something as big as a mortgage without comparing rates from at least a couple of lenders.

So, what does this mean for your credit score?

Old Scoring vs. New Scoring

Actually, it kind of depends. FICO (and other score formulas) has changed the way it deals with rate shopping recently. Since potential lenders can still get copies of your credit score based on older scoring models, it’s important to understand how rate shopping works under both the old and new methods.

  • Both old and new models ignore inquiries made in the previous 30 days. Say you apply for a mortgage with Company A on the 1st and Company B on the 15th. The inquiry with Company A won’t show up on your credit report, muddying the waters when Company B pulls your score.
  • Older FICO scoring models give you 14 days to rate shop. This means that any applications for the same type of credit made within a 14-day period will be treated as a single hard inquiry.
  • Newer FICO scoring models give you 45 days to rate shop. Now, you’ve got a much longer time period for shopping before your inquiries are lumped together here.

The problem is that you can’t actually choose which scoring model your potential lender will use. If you rate shop over a 30-day period but they pull an older FICO score, they may see multiple hard inquiries. Again, inquiries aren’t a huge factor in your score. So, this is likely not a big deal.

But if you want to keep your score as high as possible, rate shopping over a two-week period is the best bet.

Credit Effects Vary By Score

It’s also important to remember that credit inquiries (and anything else related to your credit!) are just one part of your holistic score. An inquiry’s impact will depend on what accounts you have, your current credit score, the length of your credit history, etc.

Learn More: 5 Ways to Build Your Credit Without Going In the Hole

Want to find out how a credit inquiry is likely to affect your score? Try a free credit scoring option like Credit Karma. It has a credit simulator that will let you look at how your score might change if you apply for credit and are denied.

What About the Long Term?

Credit inquiries shouldn’t affect your credit score for long. They’ll typically factor out of your report after 1-2 years, depending on the scoring model. But finding yourself in the type of situation where you’re applying for a lot of credit could affect your score over the long term.

New credit card accounts increase your available credit, which is helpful as long as you don’t max out those cards. If you pay off your balance every month, the effect of a credit line increase could well outweigh the effect of the hard pull.

But what if you apply for several new credit cards and then give into the temptation to overspend? In this case, carrying new balances — even with increased credit limits — could seriously damage your credit score.

Maybe You Need A Bare Bones Budget…

Applying for new credit isn’t necessarily a bad thing. As long as you’re holistically managing your finances well, it shouldn’t negatively affect your FICO score much.

But if you’re fighting for every point’s worth of improvement to your score, pay attention to those credit inquiries.

Lastly, if you want a quick and easy way to increase your credit score, give Experian Boost a try. This service can track your monthly payments including your utility bill and mobile phone bill. When you make your payments on time, your FICO Score may see a boost. Start now for free.

Learn More: Experian Boost Review


  • Rob Berger

    Rob Berger is the founder of Dough Roller and the Dough Roller Money Podcast. A former securities law attorney and Forbes deputy editor, Rob is the author of the book Retire Before Mom and Dad. He educates independent investors on his YouTube channel and at