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Need Education on Inquiries

Established Member

Need Education on Inquiries

Fairly new here and I have learned quite a bit from you all. My weak point is inquiries and the difference between soft and hard inquiries.

 

How long do hard inquiries affect your score? In addition, can they be disputed?

 

I know this may sound like dumb questions - I know what they are just now how they affect you. I've apped a few times in the past week which is why I'm curious.

 

Thank you!

FICO 8 - May 2018
EX 643 / EQ 646 / TU 652
CapOne QS $1250
Amex Green
Amex BCE $500
Message 1 of 6
5 REPLIES
Community Leader
Super Contributor

Re: Need Education on Inquiries

Soft inquiries are invisible to creditors and therefore have no effect on your score.

 

Hard inquiries do appear on your reports and stay there for two years.  After an inquiry becomes 12 months old, all FICO models ignore it.  If a creditor pulled your reports manually and saw 50 inquiries from 14 months ago, that might affect his decision about extending you credit -- but aside from that corner case, you can generally assume that inquiries older than 12 months will have no effect on lending decisions.

 

Hard inquiries that are all of the same type (auto, student loan, mortgage -- but not credit card) will be grouped together and counted as one by FICO if they are done in the same short period of time.  This enables people to "shop" for the best deal on a loan without affecting their score too much.  At least in theory.  The inquiries have to be correctly coded as being of the same type, and that doesn't always happen.  A number of us think that it makes more sense to line up your financing ahead of time (with a local CU say) so that you can go in and bargain for a reduction in the total sticker price, rather than letting the salesman sell you a "low monthly payment."

 

Each hard inquiry typically lowers the score from that report by about 5 points.  That's a decent rule of thumb.  It could be more or less depending on how young or thin your profile is.  And when you get enough inquiries they stop having as much impact.  But frankly if a person has so many inquiries (e.g. 12-15) on a report that FICO is blunting the impact of more, that in itself would be a worry to me.  I.e. I'd ask a friend like that why he is applying for that many cards or loans -- the mindset of wanting card after card is likely to be a dangerous one, apart from the scoring impact.

Message 2 of 6
Established Member

Re: Need Education on Inquiries


@CreditGuyInDixie wrote:

Soft inquiries are invisible to creditors and therefore have no effect on your score.

 

Hard inquiries do appear on your reports and stay there for two years.  After an inquiry becomes 12 months old, all FICO models ignore it.  If a creditor pulled your reports manually and saw 50 inquiries from 14 months ago, that might affect his decision about extending you credit -- but aside from that corner case, you can generally assume that inquiries older than 12 months will have no effect on lending decisions.

 

Hard inquiries that are all of the same type (auto, student loan, mortgage -- but not credit card) will be grouped together and counted as one by FICO if they are done in the same short period of time.  This enables people to "shop" for the best deal on a loan without affecting their score too much.  At least in theory.  The inquiries have to be correctly coded as being of the same type, and that doesn't always happen.  A number of us think that it makes more sense to line up your financing ahead of time (with a local CU say) so that you can go in and bargain for a reduction in the total sticker price, rather than letting the salesman sell you a "low monthly payment."

 

Each hard inquiry typically lowers the score from that report by about 5 points.  That's a decent rule of thumb.  It could be more or less depending on how young or thin your profile is.  And when you get enough inquiries they stop having as much impact.  But frankly if a person has so many inquiries (e.g. 12-15) on a report that FICO is blunting the impact of more, that in itself would be a worry to me.  I.e. I'd ask a friend like that why he is applying for that many cards or loans -- the mindset of wanting card after card is likely to be a dangerous one, apart from the scoring impact.


Got it! Thank you - now I understand. I have been getting denied for CLI because of high inquiries. Back in october I had a auto dealership run my credit by 26 banks for an auto loan that I ended up backing out of ultimately. Im pissed! Thats helpful info thank you!

FICO 8 - May 2018
EX 643 / EQ 646 / TU 652
CapOne QS $1250
Amex Green
Amex BCE $500
Message 3 of 6
Established Contributor

Re: Need Education on Inquiries


@Zave wrote:

@CreditGuyInDixie wrote:

Soft inquiries are invisible to creditors and therefore have no effect on your score.

 

Hard inquiries do appear on your reports and stay there for two years.  After an inquiry becomes 12 months old, all FICO models ignore it.  If a creditor pulled your reports manually and saw 50 inquiries from 14 months ago, that might affect his decision about extending you credit -- but aside from that corner case, you can generally assume that inquiries older than 12 months will have no effect on lending decisions.

 

Hard inquiries that are all of the same type (auto, student loan, mortgage -- but not credit card) will be grouped together and counted as one by FICO if they are done in the same short period of time.  This enables people to "shop" for the best deal on a loan without affecting their score too much.  At least in theory.  The inquiries have to be correctly coded as being of the same type, and that doesn't always happen.  A number of us think that it makes more sense to line up your financing ahead of time (with a local CU say) so that you can go in and bargain for a reduction in the total sticker price, rather than letting the salesman sell you a "low monthly payment."

 

Each hard inquiry typically lowers the score from that report by about 5 points.  That's a decent rule of thumb.  It could be more or less depending on how young or thin your profile is.  And when you get enough inquiries they stop having as much impact.  But frankly if a person has so many inquiries (e.g. 12-15) on a report that FICO is blunting the impact of more, that in itself would be a worry to me.  I.e. I'd ask a friend like that why he is applying for that many cards or loans -- the mindset of wanting card after card is likely to be a dangerous one, apart from the scoring impact.


Got it! Thank you - now I understand. I have been getting denied for CLI because of high inquiries. Back in october I had a auto dealership run my credit by 26 banks for an auto loan that I ended up backing out of ultimately. Im pissed! Thats helpful info thank you!


If that dealership ran inquires properly meaning it was coded as auto and done withing a short time frame then they should only be counted as one inquiry by FICO.


FICO 8 Starting Score
,
Current Scores


Quicksilver SL $300 - CL $3,300, Discover SL $11,500 - CL $13,000, Amex BCE SL $6,000 - CL $18,000, Amazon Prime Rewards SL $8,500, Citi Double Cash SL $7, 900 , Lowes (AU) CL $13,000, State Farm Bank - Auto Loan
Message 4 of 6
Frequent Contributor

Re: Need Education on Inquiries

The 26 inquiries, iff they were run properly, will only be counted in the FICO calculation as 1 inquiry (de-duped) BUT everyone else still sees it as 26 inquiries. They will remain for 24-25 months...

 

Of course, manual review would likely reveal the obvious, both good and bad.


Current Score: EQ753 TU769 EX778
Goal Score: 800's once again


Note to self: Garden. Must garden till 3rd Qtr, 2018
Message 5 of 6
Highlighted
Established Contributor

Re: Need Education on Inquiries

Your best course would be to call the lenders that denied the CLIs and request reconsideration; during the recon process you will be able to explain the reason for the large number of inquiries.  Other than that, you'll just have to wait a year until there's no longer a scoring impact, or two years for them to fall off your credit reports.

 


@Zave wrote:

@CreditGuyInDixie wrote:

Soft inquiries are invisible to creditors and therefore have no effect on your score.

 

Hard inquiries do appear on your reports and stay there for two years.  After an inquiry becomes 12 months old, all FICO models ignore it.  If a creditor pulled your reports manually and saw 50 inquiries from 14 months ago, that might affect his decision about extending you credit -- but aside from that corner case, you can generally assume that inquiries older than 12 months will have no effect on lending decisions.

 

Hard inquiries that are all of the same type (auto, student loan, mortgage -- but not credit card) will be grouped together and counted as one by FICO if they are done in the same short period of time.  This enables people to "shop" for the best deal on a loan without affecting their score too much.  At least in theory.  The inquiries have to be correctly coded as being of the same type, and that doesn't always happen.  A number of us think that it makes more sense to line up your financing ahead of time (with a local CU say) so that you can go in and bargain for a reduction in the total sticker price, rather than letting the salesman sell you a "low monthly payment."

 

Each hard inquiry typically lowers the score from that report by about 5 points.  That's a decent rule of thumb.  It could be more or less depending on how young or thin your profile is.  And when you get enough inquiries they stop having as much impact.  But frankly if a person has so many inquiries (e.g. 12-15) on a report that FICO is blunting the impact of more, that in itself would be a worry to me.  I.e. I'd ask a friend like that why he is applying for that many cards or loans -- the mindset of wanting card after card is likely to be a dangerous one, apart from the scoring impact.


Got it! Thank you - now I understand. I have been getting denied for CLI because of high inquiries. Back in october I had a auto dealership run my credit by 26 banks for an auto loan that I ended up backing out of ultimately. Im pissed! Thats helpful info thank you!


 

08/20/17 FICO 8: EQ 663; EX 644; TU 643
06/01/18 FICO 8: EQ 752; EX 726; TU 728


Message 6 of 6