How Many Points Will A Credit Inquiry Lower My Credit Score?
Updated November 14, 2021
Credit savvy consumers know that letting too many lenders pull their credit report in a short period of time might be a bad idea. If you weren’t aware that excessive credit pulls (aka credit inquiries) have the potential to hurt your credit score, that’s okay too. Now you know.
However, the idea that inquiries lower your credit scores a particular number of points is a myth. There is nothing on your credit report which raises or lowers your credit score a fixed number of points.
A credit inquiry does not always lower your score four points (or three, five, or six points for that matter). An on-time payment does not raise your credit score five points. A late payment does not lower your scores 30 points. That is simply not the way credit scoring works.
Keep reading for a deeper look at how hard credit inquiries can affect your credit score.
How Credit Inquiries Impact Your Credit Score
Credit inquiries don’t have a negative impact upon your credit scores across the board. Some inquiries are neutral from a credit scoring perspective.
Soft inquiries, such as those which occur whenever you check your own credit, will never harm your credit scores. And not every hard inquiry triggers an automatic credit score decrease either.
A credit scoring model (like FICO or VantageScore) won’t dock your score a specific number of points per hard inquiry that occurs. Instead, it’s the total number of relevant hard inquiries listed on your credit report during the past 12 months that determines the credit score impact those inquiries may have.
CreditWriter Tip
Credit inquiries may stay on your credit report for up to 24 months. However, FICO scoring models ignore hard inquiries once they are 12 months old.
Credit Inquiries: A Visual
Here’s an example that might make the above credit scoring concept easier to understand.
Imagine a set of five buckets lined up side by side. Each bucket bears a sign representing the number of hard inquiries that appear on your credit credit report over the last 12 months.
- Bucket #1: 0 Inquiries
- Bucket #2: 1-2 Inquiries
- Bucket #3: 3-4 Inquiries
- Bucket #4: 5-6 Inquiries
- Bucket #5: More than 6 Inquiries
*NOTE: These are hypothetical categories for demonstration purposes only.
Decrypting Credit:
A base FICO® Score ranges from 300-850.
A FICO scoring model can give you the chance to earn up to 550 total points.
Confused? Consider the credit score range of 300-850. Now, subtract 300 from 850. The total is 550 — 550 points is the maximum amount you could earn from a base FICO scoring model.
Since inquiries only play a role in 10% of your FICO® Score, the most points you could earn in that category is 55. (Note: In reality, there are other factors that influence those 55 points in the “New Credit” category of your FICO Score. But we’re keeping things simple for the sake of this example.)
Here’s a hypothetical look at how credit score points might be awarded within the inquiry category of a consumer’s credit report.
- Bucket #1: 0 Inquiries = 55 points
- Bucket #2: 1-2 Inquiries = 45 points
- Bucket #3: 3-4 Inquiries = 15 points
- Bucket #4: 5-6 Inquiries = 5 points
- Bucket #5: More than 6 Inquiries = 0 points
*NOTE: These are hypothetical categories for demonstration purposes only.
The points listed above aren’t an exact. They don’t represent the real number of points a scoring model might add to your overall credit score based upon the number of relevant hard inquiries on your credit report. Yet the concept is an accurate representation of how credit scoring models calculate points within the inquiry category.
Characteristics, Variables, and Weights — Oh My!
In the credit world, the scoring process that I describe above depends on characteristics, variables, and weights. A characteristic asks your credit report a question. The variable is the answer to that question. Finally, the weight determines how many points you earn based on the answer.
- Characteristic: How many relevant hard inquiries are on the credit report?
- Variable: The total number of relevant hard inquiries on your credit report.
- Weight: The number of points a scoring model awards you (based on the number of relevant hard inquiries on your report.)
So, the buckets in the example above represent credit score variables. And the number of points hypothetically assigned to each bucket represent credit score weights.
Decrypting Credit
Credit scoring models consolidate (aka “deduplicate”) certain types of credit inquiries together if they occur within a period of 14 to 45 days. This call allow you to rate shop without fear of dropping your credit score, but (at least with FICO) only for mortgages, auto loans, and student loans.
Moving to a New Bucket
When the number of inquiries on your credit report changes, you could move to a new credit scoring bucket. As a result, your overall credit score could change as well.
In the example above, a credit report with three hard credit inquiries would earn 15 points (of the 55 available points within the category) to be added to your overall credit score. However, if you stopped allowing new hard credit inquiries, you would move to the “0 inquiry” bucket once those three inquiries became over 12 months old.
At that point, you would receive 55 points instead of the mere 15 points you previously earned. And your credit score would increase by 40 points as a result of this change.
Of course, these are make-believe numbers we’re dealing with in our example. And they’re almost certainly a bit inflated compared to how real credit scoring works.
Credit score developers typically don’t disclose all of the variables and weights working behind the scenes in their credit scoring algorithms. These details are like secret ingredients — not something they’d want to share with their competition. So, it’s impossible to know how many points you might gain if a hard inquiry ages out of credit score consideration.
CreditWriter Tip
According to FICO, most people lose less than five points when one additional hard credit inquiry shows up on their credit report.
Bottom Line
When it comes to inquiries, remember that a small number of hard inquiries tends to be better for your credit score. Soft inquiries, that typically occur when you check your own credit, are fine. They never lower your scores.
At the same time, you don’t have to be afraid to apply for financing when you want or need something. Earning good credit is somewhat pointless if you can’t use it to your advantage. As long as you don’t go overboard, the occasional hard inquiry shouldn’t make you worry.
Now that you understand that individual credit inquiries are not worth a particular number of points, congratulations! You know much more about credit scores than the average person. And, when it comes to credit, knowledge can empower you to enjoy a lot of great benefits.
Michelle Lambright Black is a leading credit expert, writer, speaker, and credit expert witness with nearly two decades of experience in the credit industry. She is an expert in credit reporting, credit scoring, financing (mortgages, credit cards, loans), debt eradication, budgeting, saving, and identity theft. She’s featured in print monthly with brands such as FICO, Forbes, Reader’s Digest, LendingTree, Experian, and more. Connect with Michelle on Twitter (@MichelleLBlack) and Instagram (@CreditWriter).
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