Understanding FICO® Scoring

[tennisfan78]

I have checked my credit reports and here are the number of hard inquiries :

Experian -- 0 in the past year, 2 in the past 2 years

Equifax --  3 in the past year  (score dropped from 705 to 692 because of 2 new accounts)

Transunion -- 1 in the past year (score dropped from 725 to 714 in the past 6 months after new accounts reported)

How many inquiries in a year is considered too many? And how much impact does it have on the credit score.  

I understand  having no inquiries is great, but whats the point in having 0 inquiries, great credit score and not use it for obtaining good loans, CLs etc.

What strategy should one follow?

[jsickz32]

I have between 13-19 inqs on my CRs. Believe it or not when i started my app spree back in 06/12 my scores were all in the 670s. 17 new accounts later and all those inqs and my scores never really dropped. My aaoa was low to start with so that didnt change much.

[bs6054]

For FICO, only inquiries in the last year are counted.  They stay on your report for 2 years but only impact for 1.

By many accounts, the impact is even reduced within that year, so inqs older than 6 months count less than newer ones.

I understand  having no inquiries is great, but whats the point in having 0 inquiries, great credit score and not use it for obtaining good loans, CLs etc.

Because ideally you will be at a point where you have all the credit (loans/mortgage/credit cards) you need, so no point in getting any more!   Hopefully at some stage in your financial life a new credit card offer: "$500 cash when you make first purchase" simply appears to be not worth the effort.

[visorboy1974]

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tennisfan78 wrote:

I have checked my credit reports and here are the number of hard inquiries :

Experian -- 0 in the past year, 2 in the past 2 years

Equifax --  3 in the past year  (score dropped from 705 to 692 because of 2 new accounts)

Transunion -- 1 in the past year (score dropped from 725 to 714 in the past 6 months after new accounts reported)

How many inquiries in a year is considered too many? And how much impact does it have on the credit score.  

I understand  having no inquiries is great, but whats the point in having 0 inquiries, great credit score and not use it for obtaining good loans, CLs etc.

What strategy should one follow?

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I'd say the impact on score is negligible.  Maybe a handful of points max.  I have 10 INQs on my EX report and it's score is higher than EQ, which has 0.      

[tennisfan78]

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bs6054 wrote:

For FICO, only inquiries in the last year are counted.  They stay on your report for 2 years but only impact for 1.

By many accounts, the impact is even reduced within that year, so inqs older than 6 months count less than newer ones.

I understand  having no inquiries is great, but whats the point in having 0 inquiries, great credit score and not use it for obtaining good loans, CLs etc.

Because ideally you will be at a point where you have all the credit (loans/mortgage/credit cards) you need, so no point in getting any more!   Hopefully at some stage in your financial life a new credit card offer: "$500 cash when you make first purchase" simply appears to be not worth the effort.

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Thanks. I hope to be there in the next few years!!!

[tennisfan78]

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visorboy1974 wrote:

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tennisfan78 wrote:

I have checked my credit reports and here are the number of hard inquiries :

Experian -- 0 in the past year, 2 in the past 2 years

Equifax --  3 in the past year  (score dropped from 705 to 692 because of 2 new accounts)

Transunion -- 1 in the past year (score dropped from 725 to 714 in the past 6 months after new accounts reported)

How many inquiries in a year is considered too many? And how much impact does it have on the credit score.  

I understand  having no inquiries is great, but whats the point in having 0 inquiries, great credit score and not use it for obtaining good loans, CLs etc.

What strategy should one follow?

---

I'd say the impact on score is negligible.  Maybe a handful of points max.  I have 10 INQs on my EX report and it's score is higher than EQ, which has 0.      

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Wow , thats interesting

[tennisfan78]

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jsickz32 wrote:
I have between 13-19 inqs on my CRs. Believe it or not when i started my app spree back in 06/12 my scores were all in the 670s. 17 new accounts later and all those inqs and my scores never really dropped. My aaoa was low to start with so that didnt change much.

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Thats cool to know.

[09Lexie]

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visorboy1974 wrote:

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tennisfan78 wrote:

I have checked my credit reports and here are the number of hard inquiries :

Experian -- 0 in the past year, 2 in the past 2 years

Equifax --  3 in the past year  (score dropped from 705 to 692 because of 2 new accounts)

Transunion -- 1 in the past year (score dropped from 725 to 714 in the past 6 months after new accounts reported)

How many inquiries in a year is considered too many? And how much impact does it have on the credit score.  

I understand  having no inquiries is great, but whats the point in having 0 inquiries, great credit score and not use it for obtaining good loans, CLs etc.

What strategy should one follow?

---

I'd say the impact on score is negligible.  Maybe a handful of points max.  I have 10 INQs on my EX report and it's score is higher than EQ, which has 0.      

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Are your bureaus exactly the same (AAOA, baddies, etc)?

[llecs]

IMO, inquiry damage is overrated. Usually the impact is seen when going from 0 to 1 or 1 to 2 inquiries with no new accounts and a higher FICO. I also had a high inquiries count inside a year at 30 or so each on EQ and EX back in the day (when we could pull our EX FICO on here). After a few it doesn't matter anymore and there's no damage.

[chasmith]

My impression is that over 5 there's little additional impact.

But remember, your score is the first step in being considered by a lender.  I've seen posts where a person with a decent score was rejected for "too many recent inquiries".  Barclays is said to be notorious for that.

Personally, I've reached the point where I don't need new accounts so don't choose to incur inquiries.  In th three years from BK7 I went from maniacally applying to making no applications except for my mortgage (over a year).  Now I'm gardening and hope to reach zero inquiries before I make another app.