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How Many Hard Credit Inquiries is Too Many?

Hard inquiries happen when you apply for credit or a loan. But having too many can affect your credit score. Here’s how to minimize their impact.

August 4, 2022

Whenever you apply for a loan or credit card, the lender will access your credit file. This is done to determine your creditworthiness and help the lender decide whether or not they are willing to lend to you.

In many cases, the credit check will be a “hard inquiry.” But what does this term mean, exactly — and how many hard inquiries is too many?

What is a hard credit inquiry?

A hard credit inquiry occurs when a lender pulls your credit report from one or more of the three credit bureaus. A hard inquiry may also be referred to as a “hard pull.” 

Credit inquiries can be “hard” or “soft.” Hard inquiries are typical when you apply for a loan or credit card or sometimes when you apply for an apartment lease. 

Hard credit inquiries give lenders access to your entire credit report. They can see your payment history, credit score, current balances and any negative marks on your report. 

How do hard inquiries impact your credit score?

Hard inquiries show up on your credit report for two years. This means that future lenders that pull your credit in the next two years will be able to see that you applied for credit. You don’t need to remove hard inquiries yourself — they will drop off your report automatically after two years.

If there are many hard inquiries in a short period of time, that could be a warning sign to lenders that you may be overusing credit. 

Overall, hard inquiries will have a small negative impact on your credit score, but the effect is temporary. Your score may dip by a few points, but it will usually recover quickly. According to FICO®, a hard inquiry will usually lower your credit score by no more than five points

Rate shopping and hard inquiries

If you plan to get a large loan, like a mortgage or auto loan, it’s worthwhile to shop around for the best rate. Even a slightly lower interest rate can save you a lot over the life of the loan. In fact, Freddie Mac estimates that by getting one additional rate quote on a mortgage, borrowers could save $1,500 on average over the life of the loan. 

Here’s the dilemma, however: Rate shopping can result in a flurry of hard credit inquiries, which could temporarily ding your credit score. There are a few ways to minimize these effects, however.

Ask for preapproval or prescreening: Some lenders may be able to preapprove you for a loan by conducting a soft credit inquiry, which will not affect your credit score. When applying, be sure to ask specifically whether the inquiry will be a hard or a soft pull. 

Conduct applications in a short time frame: Most credit scoring models will lump multiple inquiries for mortgage, auto or student loans together if they are made within a certain time frame and treat them as only a single inquiry. FICO uses a 45-day period, while VantageScore uses a 14-day period. To be safe, it’s best to batch applications in a 14-day window. Keep in mind that only inquiries of the same type, not including inquiries for credit card applications,  will be bunched together — so four different mortgage applications could be treated as one inquiry, but two mortgage applications and two credit card inquiries would be treated as three inquiries. 

Apply for only one type of loan at a time: If you’re shopping for a mortgage, avoid applying for any other type of credit (credit card, personal loan, etc.) at the same time. 

Ultimately, getting a lower interest rate can save you a lot of money, so it’s typically worth rate shopping, regardless of the potential negative impact on your credit. 

How many hard inquiries is too many?

There’s no definite rule as to the maximum number of hard inquiries. However, generally speaking, the more hard inquiries you have on your report, the more it can affect your credit score and your ability to be approved for credit. 

This is particularly true for hard inquiries related to credit cards and personal loans. These inquiries are always considered separately in credit scoring models. If you have several credit card hard inquiries in a period of time, this could have an effect on your ability to be approved for credit. 

Batches of inquiries for something like a mortgage might not have as much of an effect, however. Mortgage loan inquiries made within a limited time frame will often be bunched together in the credit scoring models, reducing the impact that each inquiry might have on your credit. 

How can I reduce the impact of hard credit inquiries? 

Overall, the impact of hard inquiries is typically minimal. “New credit” accounts for just 10% of your credit score, and hard inquiries are only just a small portion of that 10%. 

The best thing you can do to minimize the impact of inquiries is to improve your overall credit health. This involves learning about the factors that contribute to your credit score, and improving where you can. 

The two biggest factors in your credit score are payment history and amounts owed. If you can build a positive history of on-time payments, your score will improve. And if you have substantial debt balances, taking steps to lower your debt and credit utilization can also give a big boost to your score. 

If you do plan to lower your current balances, it’s wise to pay off the highest interest debt first. Usually, this is credit card debt.

Tally† is an app that may be able to help. Tally helps qualifying applicants consolidate multiple credit card balances into a single line of credit. Learn how Tally works

Final thoughts

How many hard inquiries is too many? It depends on the type of inquiry and your overall credit history. If you’re rate shopping for something like a mortgage, batching applications within a 14-day period can help minimize the effects on your credit score. 

Ultimately, hard inquiries do not typically have a dramatic impact on your credit. If you only apply for credit when you actually need it, you shouldn’t need to be concerned with hard inquiries impacting your credit score. 

†To get the benefits of a Tally line of credit, you must qualify for and accept a Tally line of credit. Based on your credit history, the APR (which is the same as your interest rate) will be between 7.90% - 29.99% per year. The APR will vary with the market based on the Prime Rate. Annual fees range from $0 - $300.