Inquiries may hurt your credit score, or they may do nothing. When it comes to credit repair it’s important to prioritize your efforts, and generally, inquiries may left until everything else is resolved. Even then, you may decide to ignore the inquiries, but before we dismiss them altogether let’s explore the relationship between inquiries and your credit score a bit.
Soft and Hard Inquiries
There are two types of credit inquiries, soft and hard. Soft inquiries have no effect on your scores and occur when potential creditors check your credit before sending an unsolicited offer of credit, as well as when existing lenders conduct periodic reviews. Hard inquiries occur when you apply for new credit.
In order to accommodate rate shopping, FICO treats all mortgage and auto finance inquiries in any 45 day period as if they were just a single inquiry. Further, these inquiries will not appear at all for 30 days. So, although your day of car shopping may have resulted in a dozen inquiries, the impact on your score will be minimal.
Time and Your Credit
Time plays an important role on the impact of an inquiry. As the months slip by the impact on your score diminishes quickly; after six months it is negligible. It may also be helpful to know that soft inquiries fall off your report after 12 months, and hard inquires after 24 months.
Opting Out of Inquiries
Would you like to stop unsolicited credit offers along with the soft inquiries they create? You may do so by calling (800) 5-OPT-OUT. You will be given the option of opting out for 5 years, or permanently. Just remember that you may miss out on some legitimately great offer.
The last and more urgent warning about inquiries involves the uncomfortable possibility that someone is applying for credit under your name. If you see a hard inquiry on your report you do not recognize, contact the creditor to see if there is an active or pending application in your name. Chances are it is just another stray or improperly coded entry on your report, but it is best to be sure.