How does it affect your score?

How many times is too many?

Who cares?

If you’ve had any doubt on this topic…
get ready to have your questions answered.

Let’s have a Q & A on running your credit report.

Q: What is this “credit inquiry” that you speak of?

A: Credit check. Credit Inquiry. Hard Knock. Hard Pull. Hard Inquiry… whatever you want to call it, it’s one and the same. When you apply for a loan, you authorize a lender to “inquire” for a copy of your credit report.

Anytime your report is accessed via a hard inquiry, it will be listed on your credit report. There are also “soft inquiries” that employers, apartment complexes, and credit card solicitors (think: junk mail) often use which give them a snapshot of your credit profile. Any “soft” inquiry will not be listed on your credit report, since they were not considering you for a loan.

Q: Will my score drop if I apply for new credit?

A: Check this out. If you are looking for an auto, mortgage, or student loan lender within a short period of time (about 30 days), even if you apply for numerous loans in that time… all of these inquiries will be treated as ONE inquiry. Yes, one.

Let’s clarify about “rate shopping”: So, you are car shopping and want/deserve the best interest rate. Any auto loan inquiries for that month will count as one inquiry, so long as you ultimately book an auto loan in that time period. So, if you apply at 3 credit unions and 3 banks, those 6 credit checks will only affect your score one single time (not six).

The bureaus understand that you’re shopping around, and you’ll never be penalized for trying to save money! Simple!

Q: Why does applying for credit affect my score?

A: Research shows that people who open several lines of credit in a short time are at a greater risk for defaulting on their loans. The more inquiries you rack up, the more “desperate” you may look to obtain credit. The more desperate you look, the bigger the risk that you may not pay them back. (exception: short-term inquiries of a “rate shopping ” nature. See the previous question). Think of it this way. If you friend asks you to borrow cash to pay a bill, you might say yes. If your friend asks you, 5 of their friends, and 10 cousins…would you still rush to help them out?

One inquiry here or there is highly normal business and will not affect your score for very long (usually a few weeks) before it returns to normal. Statistically, people with six inquiries or more on their credit report within a short window of time can be up to eight times more likely to declare bankruptcy. Moral of the story…only apply for credit when you intend to secure it. Don’t apply “to see what happens”, apply to “buy and take home today”.

Q: What if they didn’t tell me they were running my credit?

A: In some situations, you may not need to give written consent to check your credit. Often, verbal consent is perfectly fine. Legally speaking, anybody who intends to check your credit should ask for your permission in some fashion. However, I have personally witnessed many times where people “imply” they may check it without telling you, straight up, they’re going to.

Remember: If they ask for your information such as your full name, address, social security number, date of birth…, assume that they are going to run your credit. If you do not want this to happen, don’t assume that they “know” this, specifically say so. “I do not want you to pull my credit report at this time”.

If your credit report was accessed without your knowledge, and you want to dispute this, make sure to file a dispute with the three credit bureaus: Equifax, Experian, and Trans Union.

Q: I do not want ANYONE looking at my credit without my permission. What do I do?

A: Look into placing a credit freeze on your report with the three bureaus by contacting them directly. Freezing your credit report makes it inaccessible to most users, although companies which you already have loans with can still have access. Governments, private investigators, and courts of law can still access your report, too, but only for performing background checks. This is also a great tool to utilize if you know a divorce is looming.

When you want your report assessed, you will need to contact the bureaus to “thaw” your report (typically done online by username/password) and grant permission.

Q: How can I see who has accessed my credit report?

A: Once a year, visit Annual Credit and check your report on all three bureaus for errors, omissions, and corrections. Any activity, including inquiries, will be found here.

This is a “soft inquiry” and will not adversely affect your score, or report, in any way.

Q: How much does an inquiry affect my score?

A: This much.


We will cover the other areas of the pie chart in a future post, but credit inquiries only affect your score by 10%. The overwhelming majority of your credit report is composed of how well you make payments, how much you owe, and other factors.

What have we learned?

  • Do not hesitate to have your credit report reviewed if you intend to buy very, very soon.
  • If you are buying/refinancing a car, house, or getting a student loan… please check with MULTIPLE lenders to make sure you are saving the most money. Don’t let a “hard inquiry” scare you into paying cold, hard cash. Need a rundown on how interest rates affect your cash? Find it HERE.
  • Do not have your credit report reviewed constantly. Say no to the “in store” credit cards. Pass on going to the car dealership every couple of months to “see” what you can buy. Avoid checking with mortgage companies multiple times a year to “find out” how much house you can buy. Only run your credit when you are intending to make the purchase in the next 30 days.

And, as always, work to protect your own best interests.