How Long Does It Take Hard Inquiries to Fall Off Credit?
Understand how hard inquiries affect your credit history and their natural lifecycle on your report. Get clear answers.
A credit report details an individual’s credit history, influencing access to loans, credit cards, and rental agreements. Hard inquiries are one type of entry on these reports, and understanding their impact is important for consumers.
What Are Hard Inquiries
A hard inquiry, also known as a hard pull, occurs when a lender examines your credit report to make a lending decision. This happens when you apply for new credit, such as a mortgage, auto loan, personal loan, or credit card. Lenders require your explicit permission to perform a hard inquiry.
Hard inquiries differ from soft inquiries, which do not affect your credit score. Soft inquiries occur when you check your own credit report or when pre-approved credit offers are generated. These are not visible to other lenders and do not impact your creditworthiness.
How Hard Inquiries Affect Credit Scores
Hard inquiries can lead to a slight, temporary dip in your credit score. The impact is minor, often reducing a score by fewer than five points. This effect lessens over time, with the score impact often disappearing within a few months to a year, even if the inquiry remains on the report.
The influence of a hard inquiry on your score is less significant than other credit factors, such as payment history or credit utilization. While multiple hard inquiries in a short period could signal higher risk to lenders, a single inquiry has a minimal and short-lived effect. Timely payments and managing existing credit balances carry greater weight in credit score calculations.
When Hard Inquiries Leave Your Credit Report
Hard inquiries remain visible on your credit report for a maximum of two years from the date they were made. After this two-year period, these inquiries are automatically removed from your report by the major credit bureaus. While the inquiry stays on your report for two years, its impact on your credit score diminishes much sooner, often within 12 months.
Lenders maintain these inquiries on your report to observe recent credit-seeking behavior. This allows them to assess whether you have been applying for many new credit accounts, which could suggest increased financial risk. The presence of the inquiry provides a historical record of your applications.
Strategies for Handling Hard Inquiries
To minimize the impact of hard inquiries, consider “rate shopping” for specific types of loans, such as mortgages, auto loans, or student loans. Credit scoring models often count multiple inquiries for the same loan type within a specific timeframe as a single inquiry. This “shopping window” can range from 14 to 45 days, allowing consumers to compare offers without excessive score penalties. This exception does not apply to credit card applications, where each inquiry is treated separately.
Regularly check your credit reports for accuracy. You can get a free copy from each of the three nationwide credit bureaus annually. If you identify an unauthorized or unrecognized hard inquiry, dispute it with the credit bureaus. This involves contacting the credit bureau and potentially the company that made the inquiry, providing evidence, and requesting its removal.
To further minimize inquiries, stagger applications for different types of credit if not related to rate shopping. Apply for new credit only when genuinely needed. Prequalification processes for credit cards or loans, which involve a soft inquiry, can help you gauge eligibility without affecting your score.