How many points does a credit card inquiry drop your score?

Impact of Credit Card Inquiries on Credit Score

A credit card inquiry, also known as a hard credit inquiry, occurs when a lender reviews your credit report to assess your creditworthiness before approving your application. While this process is essential for lenders to make informed decisions, it can also impact your credit score.

According to FICO, one of the most widely used credit scoring models, a single credit card inquiry typically results in a minor dip in your credit score. The impact usually ranges from zero to five points, although it can vary depending on several factors, such as your credit history and the type of inquiry.

It’s important to note that the effect of a credit card inquiry is generally temporary. The score deduction typically recovers within a few months, as new information is added to your credit report. Therefore, a single inquiry should not cause substantial long-term harm to your credit score.

However, if you have multiple credit card inquiries within a short period, the cumulative impact can be more significant. This is because lenders view frequent inquiries as a potential sign of high-risk behavior or excessive credit seeking. As a result, multiple inquiries in a short timeframe can lower your credit score more than a single inquiry.

To mitigate the impact of credit card inquiries on your credit score, consider the following tips:

• Avoid applying for multiple credit cards simultaneously. If you need to apply for new credit, space out your applications over time to minimize the number of inquiries on your report.
• Be selective in choosing which cards you apply for. Only apply for cards that you have a reasonable chance of qualifying for. If you are denied, the inquiry will still appear on your report and potentially lower your score.
• Monitor your credit report regularly. Review your credit report periodically to track any changes, including new inquiries. If you see unauthorized inquiries, dispute them immediately with the credit bureau.

By understanding the impact of credit card inquiries on your credit score and following these tips, you can minimize their negative effects and maintain a strong credit rating.