Should I be worried about Credit Inquiries?

Question

I have 7 Credit Inquiries right now. I got 6 last year from looking for a personal home for over 9 months before having to halt my search. Now I'm looking to invest in real estate and just got pre-qualified for a loan. Should I be concerned for having so many credit inquires? Will this affect me negatively or will the banks understand when they see my good overall history. (I have 750 credit score)

Thanks for any help!

Chris Mason · Answer

Mortgage inquiries are not treated unfavorably as credit card inquiries are by the FICO algorithm. The terms "soft pull" and "hard pull" do not appear on credit reports, but the type of inquiry does.

The following is directed at the lurkers and BP community at large more than you specifically, Sam, and I'm sure it'll be unpopular with some, but it's the truth:

I have never seen someone with bad credit due to credit inquiries, but I  have encountered MANY people who CLAIM that the reason for their bruised credit was credit inquiries... these same people of course always have excuses for why the Ford Mustang that was repossessed, and five credit card lates, and the eviction, and so on, were all always "really" someone else's fault, and then pivot back to the guy at Comcast running their credit "without authorization" as being the "real" reason they have a 485 FICO score (ya I'm sure the repo and eviction and lates had NOTHING to do with it...).

"I have bad credit due to credit inquiries" is a myth perpetuated by those who cannot take personal responsibility; these same people tend to be the most vocal, which makes this nonsense appear credible.

Doug Pintarch · Answer

ABSOLUTELY correct.  Over 32 years in the automobile business here, 27 in the finance end, and I've seen and heard it all when it comes to credit excuses.    Harry Potter has nothing to do with the secret formulas folks.  Here it is in a nutshell:

1.  Live within your means.

2.  Pay your bills on time.

POOF!   You're an 800!

Russell Brazil · Answer

Yeah I hate the conversations I have with the credit karma users who are like my score just dropped 20 points from all the mortgage lender inquiries.  The general populace has been trained to believe credit karma and distrusts fico, mortgage lenders, their agents etc.

Alexander Felice · Answer

I would like to push back on this with some anecdotal experience

I was in auto lending for a while. it was common for someone to have a lousy score and not qualify for the car of their dreams. So they go to 2-3 dealers and each dealer will send the deal to a bunch of banks (cuz they evil), and by the end of the day the poor customer with a 600 Experian now has a 540 Experian and it takes 2 seconds of looking at their report to know they have been all over town trying to buy. Well, now they not only can't buy the car they want, they can't buy anything at all.

again, anecdotal, but credit inquiries when being negligent and egregious do hurt purchasing power.

all that said, to OP, no you shouldn't worry. Your score is a resource like cash, use it to buy things (it'll fluctuate up and down), just keep it over 760. Anything more than that is buffer.

Irina Belkofer · Answer

It's not inquiries were hurting your score but quite few mistakes.

Age of your credit: you closed oldest cards and open few new - you cut off the age of your credit history dramatically. Utilization ratio is not that important when the average age of your credit so small.

Example: you have 3 cards 5, 7 and 9 years old. Your average age of credit was 7 years which is decent. Now, when you open  5 credit cards with 0 years, your average age became 2.6 years which is not enough for any 1 tier credit card (Citi, BofA etc)

So, until your credit is back to 7 years old, your score will grow 1-2 points per month.

If you pay off all your loans and cards, it still will be lower than original - now because of no usage. Dormant cards won't increase your score unless you use them.

Chris Mason · Answer

Ha, I bet you kept a picture of it! What was on the spot where it normally lists the 3-4 reasons it's not perfect?

Chris Mason · Answer

You might be historically correct, I don't know.

This is from Fair Isaac Corporation directly, as of 2018 you can have 5000 car loan inquiries on the same day and it will not impact you any more than one.

As of 2018, someone claiming a 60 point drop due to inquiries is almost certainly comparing a fake score from a company selling credit cards (credit karma, etc) to an actual score pulled by an actual creditor. 15 to 75 points is the normal spread.

Sam Alegria · Answer

Thanks for the advice. I'm trying to be careful and not be negligent about the inquiries. Hopefully I get my first piece of real estate soon!

Ty L. · Answer

I've seen it change the score negatively but bounce back within a few months. So, I guess it depends...

Should I be worried about Credit Inquiries?

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