How Long Do Credit Inquiries Stay on Credit Report

Not too long ago I wrote a post about how credit card utilization ratios impact your ability to qualify for business credit lines. In today’s post we are going to address credit inquiries, how long they stay on your credit reports, how they impact your ability to obtain new credit and more importantly how to remove them.

As you know, inquiries happen when someone checks your credit. Anytime you authorize a lender, bank or other credit grantor to review your credit it triggers a “hard “inquiry on your personal credit report.

Now keep in mind, a “hard inquiry will only show up on the credit report that the lender or credit grantor pulls from. For example, if you apply for a credit card and the card issuer pulls from Transunion then that “hard” inquiry will only show on your Transunion report. Sometimes a credit grantor may check your credit from all three major credit reporting agencies resulting in a “hard” inquiry showing up on all three of your reports.

“Hard” inquiries may impact your FICO® scores because it signifies that you’re actively looking for new credit and according to FICO®, the data shows that individuals applying for credit may be more of a risk than those who are not. For example, having 1-4 “hard” inquiries in a 12 month period is not nearly as bad compared to having 5-10.

However, not all “hard” inquiries have the same impact on a credit report. According to myFICO.com, “the impact from applying for credit will vary from person to person based on their unique credit histories.” The impact that “hard” inquiries have on your credit depends on various factors. For example, if you already have a strong credit score then inquiries have less of an impact compared to an individual who has poor credit scores and incurred recent inquiries.

Other “hard” credit inquiries that have less of an impact are due to rate-shopping, such as a mortgage, auto and student loan. For these types of “hard” inquiries, FICO® ignores inquiries made in the 30 days prior to scoring. So if you get a loan within 30 days, the multiple inquiries won’t impact your scores due to rate shopping. So if you are planning to get a loan for a mortgage or auto make sure to rate-shop within a set 30 day period.

Where we see many business owners get into trouble is the accumulation of multiple “hard” inquiries not related to rate-shopping. This may limit their opportunity for funding programs such as unsecured business financing. If a business owner submits a credit report for our unsecured business credit lines with 5 or more recent “hard” inquiries not related to rate-shopping then they may get declined.

“Soft” inquiries have no impact on your scores since you either are checking your own credit or a credit grantor does a pre-approval or account review without your permission. Basically, a “soft” inquiry does not show that you’re actively looking for new credit.

How long do “hard” inquiries stay on my credit report?

Hard inquiries will stay on your credit report for 2 years from the date of the inquiry. Now you can take certain steps to dispute a “hard” inquiry but remember inquiries are the least important items to remove from a credit report compared to other items such as missed payments, collections and charge offs. Although “hard” inquiries only affect your score for 12 months, lenders will still be able to see the full list of ‘hard’ inquiries listed at the bottom of your credit report.

Why this may pose a challenge for you is too many ‘hard’ inquiries on your credit report can indicate to a credit grantor that you’re desperate for cash and may be facing financial trouble. They may also assume that you may have recently opened up a bunch of new credit accounts and could deny you credit, because new credit lines take time to show up on your credit reports.

How do you remove ‘hard’ inquiries from a credit report?

The first step is to obtain a copy of your credit reports from Equifax, Transunion and Experian. You are entitled to one free credit report per year by law which can be accessed by going to Annual Credit Report.com.

Secondly, review all the inquiries listed in the regular inquiries section, do not review the account review inquiries since these are ‘soft’ inquiries and have no impact on your scores. Check each ‘hard’ inquiry carefully and if it’s an inquiry you did not authorize then record the creditor address and information on a separate document. This information will be used on your inquiry dispute document which is covered below.

Finally, once you have this information check out our post on How to Remove Inquiries from Your Credit Report. In that post you’ll be able to download our ‘Hard Inquiry Dispute Document’ so you can start the inquiry dispute process.

On a final note, if you want to opt out from credit card marketing offers check out OptOutPreescreen or call 1-888-567-8688.

Until next time…

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About the author

Marco Carbajo is a business credit expert, author, speaker, and founder of the Business Credit Insiders Circle. He is a business credit blogger for Dun and Bradstreet Credibility Corp, the SBA.gov Community, Business.com, About.com and All Business.com. His articles and blog; Business Credit Blogger.com, have been featured in ‘Fox Small Business’,’American Express Small Business’, ‘Business Week’, ‘The Washington Post’, ‘The New York Times’, ‘The San Francisco Tribune’,‘Alltop’, and ‘Entrepreneur Connect’.