Why Hard Inquiries Hurt Your Credit Score

There are two kinds of credit inquiries: hard inquiries and soft inquiries. Hard inquiries can hit your credit report “hard” causing you to lose points on your credit score. These types of inquiries can come from applying for a loan, applying for a credit card or applying for a mortgage.

While hard inquiries are necessary for certain financial actions, they should be limited as much as possible. While one hard inquiry will usually just knock a few points off your credit score, more than one in a short time frame may be detrimental to your credit score. It generally takes up to two years for hard inquiries to fall off your credit report.

Best rule of thumb: Try to keep your hard inquiries to one or two a year because on average consumers with lower numbers of hard credit inquiries have higher credit scores.

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