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How much does a hard inquiry hurt your credit score

Frequent Contributor

How much does a hard inquiry hurt your credit score

How much does a hard inquiry hurt your credit score? Here's my situation.
 
I have just done 2 within a month because I opened up 2 new cards. Now my total credit limit climbed $10,000 within the month as well. (That was probably a 25% increase in available credit, and I have not incurred any more debt.)
 
Having said that, might my FICO actually be higher because my utilization went down, thus offsetting the hard inquiries?
 
 
Message 1 of 7
6 REPLIES
Moderator Emerita

Re: How much does a hard inquiry hurt your credit score

Yup. Especially if the inqs were on two different CRA's, i.e., one on EQ and one on EX.

Four things happen when you open a new account:

- probably a slight point drop for the inq, only on that particular CRA,
- point drop for a new account once it starts to report,
- potential point increase for higher overall credit limit and lower overall util, and
- point increase for a new tradeline with clean history.

If you pull your scores far too often (don't ask how I know this), you might see:

- maybe around 2-3 points gone on the report that had the inq,
- next maybe around 5-10 points gone (more if you have really high scores) on all three reports when the new account posts for the first time,
- at the same time, maybe a score increase if the new account really helps your util, and
- after a month or so, gradual score increases as the new, clean tradeline continues to report with clean payment history and low util.

You might not lose points for the inq if it's your only one, or alternatively, if you already had a bunch, and this is just yet another.
* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
Message 2 of 7
Moderator Emeritus

Re: How much does a hard inquiry hurt your credit score

IMO, inquiry hits are over-rated. I just added #28 on EX without any hit. In fact, absolutely for sure, of the past 10 inquiries, there has been no score change. I also just went from 0 to 1 on TU without a score change. I'm not saying inquiries don't hurt you, I do think the impact is very minimal.
 
I think that any hit people see are either utilization that they haven't factored in (assuming the new acct isn't reporting). Also, people may be seeing their score drop, but underestimate the negative impact of adding a new acct.
Message 3 of 7
Frequent Contributor

Re: How much does a hard inquiry hurt your credit score

That being said - I just applied for a new account (and was accepted) yesterday. If I want to apply for one more, should I do it right now, before it posts as a new account?
 
Thanks!
Message 4 of 7
Moderator Emerita

Re: How much does a hard inquiry hurt your credit score



ace9848 wrote:
That being said - I just applied for a new account (and was accepted) yesterday. If I want to apply for one more, should I do it right now, before it posts as a new account?
Thanks!



I did all mine in one day, pretty much for this reason. Also, if the next CCC pulls a different credit report than the other(s), they won't even know that you applied anywhere else.

It doesn't sound like you're about to go berserk with app'ing, but everyone should realize that your new accounts will probably soft you in the next month or two, so they might not know today that you opened several accounts, but they will next month. So keep your nose clean in terms of util and all. Good luck!
* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
Message 5 of 7
Senior Contributor

Re: How much does a hard inquiry hurt your credit score



ace9848 wrote:
That being said - I just applied for a new account (and was accepted) yesterday. If I want to apply for one more, should I do it right now, before it posts as a new account?
Thanks!



IF you need the account go for it now.
Message 6 of 7
Regular Contributor

Re: How much does a hard inquiry hurt your credit score

I know this post is old but in case anyone is reading it I wanted to put my two cents in. My understanding is inquiries have a bigger impact depending on what else is in your credit file. If you are fairly new to credit and you have high utilization and suddenly start applying for multiple accounts it's a big red flag. But if you have a long credit history and low utilization and then suddenly apply for several accounts it won't impact ️your score nearly as much. I could be wrong. Maybe Fico treats it the same but at least I know creditors look at it that way.



Message 7 of 7