Score effect of inquires

[Anonymous]

I read somewhere that while hard inquires remain on your CR for 24 months they only affect your score for 12 months. I've also read that there effect on your score decreases rapidly, with no specific numbers on how fast is "rapidly". Can anyone chime in on the accuracy or inaccuracy of these statements.

[Anonymous]

It's a tough metric to call because in a matter of six months lets say all your existing trade lines Age an additional 6 months. I also think that people put too much stress on them, as the worst of the worst (me for example) you only lose a possible 10% with excessive numbers. Increase in new accounts will bottom out of score much faster and much more significant.

[Anonymous]

For me, applied for 3 cards last month (Chase Sapphired Preferred and Freedom, Amex SPG), only cost me 8 points I believe.The score went up 15 points after the 2 Chase cards shows up on the CRA this weekend.

[Anonymous]

I've got 15 inquiries showing right now on one of CR and 11 one the other two. Largely a result of 2 occurrences, one was looking into a auto refinance 10/2015, I applied with an online lending solutions place which sent it out about 7 other lenders, then I went car shopping in Jan 2016, applied for a loan at the dealership which resulted in 6 more inquires as it was sent out to different lenders. I was approved on that one, but didn't like the terms so I walked away. The other 2 inquires are individual runs on my credit for a Wells Fargo card in 12/2015, approved 3k line and for a chase freedom card in 04/2016, approved with 6k line.

[Anonymous]

Regarding your question, most inquiries loses its effect on score after a year. I'm not too sure but that is the rumor around the board. 

[Anonymous]

I've also read that some lenders view all inquiries within a 14 day range as a single inquiry so that you don't get penalized when rate shopping with multiple lenders for something such as a auto or home loan.

[RobertEG]

The FICO scoring algorithm only includes inquiries under year in its scoring.

That is not a rumor or a creditor decision, it is a fact.

The CRAs have an administrative policy that is not mandated by the FCRA to delete inquiries from consumer files once they reach approx 24 months.

It is not a statutory requirement, and could occur earlier or later, but the millions of inquiries clog up their datatbases, and they dont keep them for any extended period.

The scoring of multple inquiries made within a certain window that are related to auto, mortgage, or student loans is also a part of the FICO algorithm.

The size of the window in which the inquires are made is a sliding window, and varies by scoring model.

All inquires still show in your credit report, but FICO internally scores such mutiple inquiries as only one.

It does not apply to inquires other than auto, mortgage, or student loans, or those made outside of the sliding window.

Fair Isaac refers to the counting of multiple inquires as only one as "de-duping"

[Imhotrodcrazy]

I have had gains of 3-4 points after a single inquiry falling off at the end of two years,   with everything else being the same.  I have very uneventful reports since I rarely apply for cc's or loans of any kind. 

[Anonymous]

Great response as always by RobertEG.  One additional observation about rate shopping and de-duping:

Suppose you go rate shopping for a car.  22 inquiries are made within a very small window.  In theory they will be counted by FICO as if they were only one inquiry.   But, in order to do that, the 22 creditors would have had to coded each of their inquiries as type AUTO.  Suppose that most of them (16) did that, but 6 of them did not.  The 16 inquiries would count as 1 inquiry and the other 6 would each count seperately, for a total of 7 inquiries.

This kind of thing is not common, but it isn't rare either.  Bear in mind too that any time a car dealer asks you for your social security number, it means they are about to run a large number of inquiries on you, whether they say that or not.

I am not saying rate shopping is a bad idea, just bear in mind that there can be drawbacks to it too.  Some of us therefore choosing to get our financing lined up with a CU before we walk into a dealership so that we can aggressively negotiate for the lowest price.

[EW800]

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@RobertEG wrote:

The FICO scoring algorithm only includes inquiries under year in its scoring.

That is not a rumor or a creditor decision, it is a fact.

The CRAs have an administrative policy that is not mandated by the FCRA to delete inquiries from consumer files once they reach approx 24 months.

It is not a statutory requirement, and could occur earlier or later, but the millions of inquiries clog up their datatbases, and they dont keep them for any extended period.

The scoring of multple inquiries made within a certain window that are related to auto, mortgage, or student loans is also a part of the FICO algorithm.

The size of the window in which the inquires are made is a sliding window, and varies by scoring model.

All inquires still show in your credit report, but FICO internally scores such mutiple inquiries as only one.

It does not apply to inquires other than auto, mortgage, or student loans, or those made outside of the sliding window.

Fair Isaac refers to the counting of multiple inquires as only one as "de-duping"

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RobertEG, as always, you are such a wealth of information.  I did not realize that length of inquiries on our reports was not mandated by FCRA, instead being something that the CRA's do on their own.  I have an inquiry on TU that will celebrate its 2nd birthday tomorrow.  I am looking forward to seeing at what point it actually falls off.  

Thanks once again for the great info!