Hard inquiries

[Anonymous]

We applied for a car loan through Kia and they ran our credit six times! We ended up not even buying a car because the payments were rediculous. From what I understand hard inquiries stay on your report for 2 years. I have heard that they only affect your score or hurt you for 12 months. Is this true? I guess I don't understand how if they stay on your report for two years how it's only one year they impact or hurt your score. 

[Anonymous]

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@Anonymous wrote:

We applied for a car loan through Kia and they ran our credit six times! We ended up not even buying a car because the payments were rediculous. From what I understand hard inquiries stay on your report for 2 years. I have heard that they only affect your score or hurt you for 12 months. Is this true? I guess I don't understand how if they stay on your report for two years how it's only one year they impact or hurt your score. 

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Here's some information that might help: http://www.myfico.com/credit-education/credit-checks/credit-report-inquiries/

From what I've learned, and take this with a grain of salt cuz I'm no expert, auto loan inquiries are lumped together as one inquiry as long as the inquiries are made in a 30 day period. Basically even though they checked your credit multiple times it still will only count as one. Most scoring models do this because they know when it comes to big purchases like auto, mortgage and student loans consumers will typically shop around to get the best rate.

[Anonymous]

I had a Kia dealership in my area run HP as the dealer when they specifically stated they weren't doing a HP

[RobertEG]

The CRAs choose, for various reasons, to keep inquiries in your file/credit report for two years.

However, Fair Isaac has determined that they are no longer part of their risk analysis after one year, and discontinue their use in scoring after one year.

Entirely different considerations and uses.  The CRAs must preserve record of some inquiries for possible legal purposes if requested, but FICO is concerned only with risk assessment analysis, and sees no substantive impact after one year.

FICO also recognizes that consumers shop around for credit on higher principal loans, such as auto, mortgage, and student loans, and thus score multiple inquiries made within a certain window as only one inquiry for scoring purposes.  All hard inquiries that are made still appear in your credit report, but FICO looks at them as one if they meet the criteria for that version of FICO, such as made within the last month or within a slding 14 day window.

[Anonymous]

I don't know why the dealer told you it wouldn't be a hard inquiry, maybe he didn't understand what you meant. In most cases when a dealership reviews your credit it's a hard pull.

[800goal800]

So from a Fico score point, the score after 12 months is not taking into account a HP despite it being still on there ?  Phrased another way, I have several HPs coming off next month...all things being equal, I should expect no score increase since it's after 12 months ?

[Anonymous]

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@800goal800 wrote:

So from a Fico score point, the score after 12 months is not taking into account a HP despite it being still on there ?  Phrased another way, I have several HPs coming off next month...all things being equal, I should expect no score increase since it's after 12 months ?

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A scoring increase may be seen when an inquiry reaches the 1 year mark, as it is not longer a "scorable" inquiry by FICO.  A scoring increase will not be seen when an inquiry comes off, as that happens at the 2 year mark and all adverse impact to scoring ends a year earlier at the 1 year mark.