How Long Do Hard Inquiries Stay on Your Credit Report?

A credit inquiry is a formal request to view your credit report. Financial institutions, like banks or credit card companies, initiate these requests to assess your creditworthiness. The type of inquiry determines its impact on your financial standing.

Types of Credit Inquiries

Credit inquiries are categorized into two main types: hard inquiries and soft inquiries. A hard inquiry occurs when you apply for new credit, such as a mortgage, auto loan, personal loan, or credit card. Lenders perform these checks to evaluate your ability to manage debt. Hard inquiries appear on your credit report and are visible to other lenders.

In contrast, a soft inquiry happens when your credit report is reviewed for purposes other than a new credit application. Examples include checking your own credit score, pre-approved credit card offers, or certain background checks for employment or insurance. Soft inquiries do not affect your credit score and are typically only visible to you on your credit report.

Duration of Hard Inquiries on Your Report

Hard inquiries remain on your credit report for up to two years from the date of the inquiry. While visible for this duration, their impact on your credit score typically diminishes after 12 months. Credit scoring models, such as FICO, often only consider inquiries from the most recent 12-month period when calculating your score.

When you shop for certain types of loans, such as a mortgage, auto loan, or student loan, multiple inquiries from different lenders within a short timeframe are often treated as a single inquiry. This process, known as “rate shopping,” allows consumers to compare interest rates without multiple negative impacts on their score. This grouping period can range from 14 to 45 days, depending on the credit scoring model used.

Impact on Your Credit Score

A hard inquiry can cause a slight reduction in your credit score. This impact is usually temporary and less significant than other factors that determine your credit score, such as your payment history or the amount of debt you carry. The inquiry remains on your report for two years, but its effect lessens over time.

A high number of recent hard inquiries can signal increased risk to lenders, suggesting an individual is seeking a substantial amount of new credit. This perception can lead lenders to view you as a higher risk borrower. Therefore, it is advisable to apply for new credit only when necessary.

Disputing Incorrect Hard Inquiries

Consumers have the right to dispute hard inquiries that they believe are fraudulent or incorrect. This includes instances where an inquiry appears from a lender you never applied to or if you suspect identity theft. You cannot remove legitimate hard inquiries, but erroneous ones should be addressed.

To dispute an incorrect hard inquiry, first review your credit report from each of the three major credit bureaus: Equifax, Experian, and TransUnion. Gather supporting evidence, such as documentation proving you did not apply for the credit. Then, contact the credit bureaus directly through their online dispute centers, by phone, or by mail to initiate the dispute process.