Inquiries

[Anonymous]

How many inquiries is too many in a 6 month period?  I heard that applying for a credit card (when a hard pull happens) will lower your score because of the inquiry, but then if you are approved, use it and pay it as you should, the score goes back up...in a short period of time?  Does anyone know if this is true?  Also, how many points does an inquiry cause your score to go down?  (Estimated is fine...I'm just trying to get some idea as I would like to apply for a card, however, I have two other recent inquiries.)

Thanks in advance!

[dragontears]

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@Anonymous wrote:

How many inquiries is too many in a 6 month period?  I heard that applying for a credit card (when a hard pull happens) will lower your score because of the inquiry, but then if you are approved, use it and pay it as you should, the score goes back up...in a short period of time?  Does anyone know if this is true?  Also, how many points does an inquiry cause your score to go down?  (Estimated is fine...I'm just trying to get some idea as I would like to apply for a card, however, I have two other recent inquiries.)

Thanks in advance!

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How many is too many depends on the profile and a person's risk tolerance. 

In my experience a HP is ~5 points and the new account is ~20 points. But my profile is most likely extremely different than yours so YMMV

[Anonymous]

Thanks for the response!  Yes, your score is what I'm hoping for in the future!    Let's say those numbers are pretty fitting...how long does it typically take to see them go back up...considering everything is done as it was before (low utilization, no more inquiries, no lates, etc.)?

Thanks again!

[HeavenOhio]

The number of inquiries that's too many depends on the lender. One or two could be too many for some. Others might let many inquiries slide.

Points lost to an inquiry are restored in a year. I don't believe that any points come back before that year is up, but someone here might have data that counters that.

Figure 3 to 5 points per inquiry, maybe up to 10 in an extreme case. Sometimes inquiries are grouped together, e.g. 1-2 inquiries are three points, 3-4 are six points, etc. Generally, as inquiries build up, one loses fewer points per inquiry.

[Anonymous]

Thank you for taking the time to respond. This is very helpful and much appreciated!

[K-in-Boston]

Scoring algorithms take many factors into account.  In general, yes points can be lost for inquiries and new accounts. Depending on how many inquiries one has and how recent it/they is/are, there may be no loss for adding one.  Depending on how a new account affects average age of accounts, aggregate utilization, number of accounts reporting a balance, how many other new accounts have been opened, credit mix, and other factors, there can be points lost or points gained.

A lot of times it's difficult to even determine exact scoring changes, because changes rarely happen in a vacuum and not everyone has access to daily scoring updates where you can pinpoint that event A caused X change in score and event B caused Y change in score.

[PNWRambler]

One or two inquiries in the last 6-12 months will have little to no effect on your score, especially when it comes to applying for a card. Having 5+ inquiries in 6 months may make you look like a risk - that you're aggressively seeking credit.

Inquiries stay on your report for up to a couple years but they really only affect you for 6-12 months. It does depend on the lender, they all have their different threshold for considering someone "risky".  It also lowers your AAoA if you get approved, which causes a temporary ding to your score.  But if your overall credit limit goes up and your overall utilization goes down, then you may see a rise in your score. Specific numbers would allow for a more specific answer.

[Anonymalous]

I don't think anybody's mentioned that the number of points lost to an inquiry also depends on the thickness of your file. When I had only 6 months of credit history (1 personal card) and 0 inquiries in Experian, my first inquiry costs me almost 20 points. You also lose points when the card reports, because it reduces the various aging metrics. In my case, my total loss from the inquiry + the new tradeline was a bit less than 50 points. Though my case is probably about as extreme as you'll ever see, because I also had an AU card with over 20 years of history, so my average age dropped precipitiously.

Also, it's the first inquiry that costs the most. My second inquiry only cost 7 points.

Inquiries remain scorable for 12 months, and then vanish off your report entirely after 24 months (which matters, because lenders look at the number of inquiries as well as your score). Aging loss only goes away as your accounts naturally age. In particular, there's supposed to be a nice bump when your youngest account hits the 1 year mark (I don't know if that's true for all scorecards).

[Trekkie0707]

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@Anonymalous wrote:

I don't think anybody's mentioned that the number of points lost to an inquiry also depends on the thickness of your file. When I had only 6 months of credit history (1 personal card) and 0 inquiries in Experian, my first inquiry costs me almost 20 points. You also lose points when the card reports, because it reduces the various aging metrics. In my case, my total loss from the inquiry + the new tradeline was a bit less than 50 points. Though my case is probably about as extreme as you'll ever see, because I also had an AU card with over 20 years of history, so my average age dropped precipitiously.

Also, it's the first inquiry that costs the most. My second inquiry only cost 7 points.

Inquiries remain scorable for 12 months, and then vanish off your report entirely after 24 months (which matters, because lenders look at the number of inquiries as well as your score). Aging loss only goes away as your accounts naturally age. In particular, there's supposed to be a nice bump when your youngest account hits the 1 year mark (I don't know if that's true for all scorecards).

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Agreed it is heavily variable based on the size of your file. If your file is thick they have a smaller impact. If it's thin they will have outsized impact because there is less the scoring model is using to calculate. 

I generally lose somewhere between 2-5 points for each inquiry. Thick file. But no revolving credit until recently. My score seems to be bouncing back though within a few months. YMMV. 

[AzCreditGuy]

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@PNWRambler wrote:

One or two inquiries in the last 6-12 months will have little to no effect on your score, especially when it comes to applying for a card. Having 5+ inquiries in 6 months may make you look like a risk - that you're aggressively seeking credit.

Inquiries stay on your report for up to a couple years but they really only affect you for 6-12 months. It does depend on the lender, they all have their different threshold for considering someone "risky".  It also lowers your AAoA if you get approved, which causes a temporary ding to your score.  But if your overall credit limit goes up and your overall utilization goes down, then you may see a rise in your score. Specific numbers would allow for a more specific answer.

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I had 2 Inq in the past year, which cost me about 6 to 10 pts, also I have a "seeking credit" mark on my reports. Makes it seem like I am risky, even with 2.