How Many Points Will An Inquiry Lower My Credit Scores?

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The fact that inquiries have the potential to lower consumer credit scores is not breaking news. Credit savvy consumers know that letting too many lenders pull their credit reports in a short period of time is a bad idea (with the exception of rate shopping for a mortgage, auto loan, or student loan within a 45 day period). However, the idea that inquiries lower your credit scores a particular number of points is a complete myth.

There is nothing on your credit report which raises or lowers your scores a fixed number of points. For example, an inquiry does not always lower your score 4 points (or 3, 5, or 6 points for that matter). An on-time payment does not raise your credit score 5 points. A late payment does not lower your scores 30 points. That is simply not the way credit scoring works.

How Inquiries Actually Impact Your Credit Scores

Remember, not all inquiries will have a negative impact upon your credit scores. Soft inquiries, such as those which occur whenever you check your own credit, will never harm your credit scores. Additionally, not every hard inquiry will automatically cause a credit score decrease either.

As mentioned above, your credit scores will not be docked a specific number of points per hard inquiry which occurs. Instead, credit scoring models will look at the total number of eligible hard inquiries listed on your credit report during the past 12 months to determine the credit score impact which those inquiries may have.

Imagine a set of 5 buckets lined up side by side. Each bucket bears a sign which represents the number of hard inquiries which appear on a consumer's credit report over a period of the past 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.

Since inquiries largely account for 10% of your FICO credit scores and the range of FICO scores is 300 - 850 (550 total available points) then there could be the potential for a consumer to earn up to 55 points for her credit scores in the inquiry category. 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.

While the points listed above are not an exact representation of how many points a consumer's credit score would receive based upon her number of inquiries, the concept is an accurate representation of how credit scores are calculated within the inquiry category. In the example above if Jane Doe had a credit report with 3 inquiries then she would receive 15 points (of the 55 available points within the category) to be added to her overall credit score. However, if Jane Doe stopped allowing any new credit inquiries, when those 3 inquiries became over 12 months old then she would move to the "0 inquiry" bucket and would receive 55 points instead of the mere 15 points she had received previously. In the case of this example Jane's credit score would increase by a whopping 40 points once the 3 previous inquiries aged out of credit score calculation range and she moved to the "0 inquiry" bucket.

When it comes to inquiries, just remember that the fewer hard inquiries the better for your credit scores. (Soft inquiries which typically occur when you check your own credit are fine. They never lower your scores.) Now that you understand that individual credit inquiries are not worth a particular number of points, congratulations! You understand more about your credit scores than probably 99% of the population.


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About the Author: Michelle Black is an author and leading credit expert with over a decade and a half of experience in the credit industry. She specializes in the areas of credit reporting, credit scoring, identity theft, budgeting, and debt eradication. She is featured monthly at credit seminars, podcasts, and in print. You can connect with Michelle on Twitter here.

Michelle Black

Michelle Black is a leading credit expert with over a decade of experience. She has written numerous publications regarding credit reporting, credit scoring, identity theft, budgeting, and debt eradication. She is featured monthly at credit seminars, podcasts, and in print. You can connect with Michelle on Facebook here.