How many points does your credit score go down with a hard search?

Hard Credit Inquiries and Credit Score Impact

When you apply for new credit, lenders often perform a hard credit inquiry to assess your creditworthiness. This involves pulling your credit report from one or more of the major credit bureaus. Hard inquiries can temporarily affect your credit score, but understanding their impact can help you make informed credit decisions.

How Hard Inquiries Affect Your Credit Score

A hard credit inquiry typically lowers your FICO score by less than five points. This impact is fairly minor and generally considered short-lived. The score reduction lasts for one year, after which it no longer affects your score.

Why Do Hard Inquiries Lower Your Score?

Hard inquiries indicate to lenders that you’re actively seeking new credit. Multiple hard inquiries in a short period can create the impression that you’re overextending yourself financially. This can raise lenders’ concerns about your ability to repay debt responsibly.

Managing the Impact of Hard Inquiries

While a single hard inquiry has a minimal impact on your score, accumulating multiple inquiries can be more detrimental. To mitigate this effect:

• Limit credit applications: Only apply for credit when necessary and avoid unnecessary inquiries.
• Space out applications: If you need to apply for multiple lines of credit, do so over a period of time to minimize the impact on your score.
• Identify and dispute inaccurate inquiries: If you notice hard inquiries on your credit report that you didn’t authorize, dispute them with the credit bureaus.

Other Factors that Affect Your Credit Score

It’s important to remember that hard inquiries are just one factor that affects your credit score. Other factors include:

• Payment history
• Credit utilization ratio
• Length of credit history
• Mix of credit accounts

By maintaining a good credit payment history and managing your credit responsibly, you can offset the temporary impact of hard inquiries and build a strong credit score over time.