When you apply for credit (CC, auto loan, mortgage), the lender is required to report this to the CRA whose report was pulled. That makes it a hard inquiry.
Soft inquiries can occur with your current lenders, who are checking to see if you're getting in trouble with other lenders, or if they might want to increase your CL, or decrease it, or offer you a new product, or shut you down like a bad Broadway play. There is also a subtype of softs called promo inqs, where a potential lender just gets the general demographic info on consumers who might meet their qualifications, so that they can send you junk mail. This is the sort of thing that is blocked when you "opt out."
All hard inquiries
display for two years.
Hard inquiries are
used in scoring by FICO for one year.
So they affect your score for a year, but they're visible to lenders for two years. Also, you need to remember that it's not the total number of inqs, but the number per CRA that matter. If you have 15 total inqs, but only 3 on Equifax, and a new lender pulls EQ, they're going to see 3.
Mortgage inqs and auto loan inqs are
"de-duped" (de-duplicated) and counted as one per CRA if they are made within a certain time frame. They display, but for scoring purposes, they are counted as one inq.
From the experience of some major app-a-holics here on the forums, we have found that inqs really don't hurt your score after a certain number, maybe a half dozen, per CRA. But potential lenders (and current lenders) might react negatively, wondering what on earth you're up to, and if you're in financial difficulties and scrambling to find credit anywhere you can.
Many credit decisions are initially made by computer these days, and computers don't know about de-duping. So there's a good chance that you might initially be denied for something for "too many inquiries." Be prepared for this, and have a copy of the credit report that your would-be lender pulled. Call them up, ask for a credit analyst or specialist, and go over the inquiries with them. Front-line CSR's (those that you get when you first call in) and some supes don't grasp that 8 inquiries for a house don't indicate that you were trying to buy 8 different houses, so you need to make nice and help them see that this is different from 8 inqs from 8 different credit card companies.
This is a great reason why those who are thinking of buying a car/ truck/ etc ought to go to a credit union or local bank first and line up their financing, and then go tire-kicking. This will save you from being shopped by auto dealers. Most of us are pretty cynical about the trustworthiness of dealers (my apologies to any dealers out here; I know that there are good ones), and this cynicism should definitely be extended to any promises they might make you in terms of "helping" you find credit.
There's a lot of info to be found on the Education tab up above, although IMO, it has changed and become a bit confusing. So read through it, and especially If you haven't already done so, please read
Understanding Your FICO ® Score and
Credit Scoring 101 (at least the first post.)
These will give you the background knowledge you need to understand what you read here on the forums.
* 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
