How many credit inquiries is too many?

First things first: There’s no definitive answer to the question “How many credit inquiries is too many?” Why? Because there are two different kinds of credit inquiries. And while one of them doesn’t affect credit scores, the other one does. Soft inquiries are simple reviews of your credit file and existing accounts that don’t impact your credit scores. But hard credit inquiries can have an impact—and they’re triggered whenever you apply for credit.

Read on to learn more about credit inquiries, how they can affect your scores and what you can do to manage their impact. 

Now you know that hard credit inquiries can have an impact on credit scores. But you might be wondering how.

According to credit-scoring company FICO®, a hard inquiry can cause your credit scores to drop—usually by just a few points. Hard inquiries can stay on your credit reports for up to two years. But they might only affect your scores for a year.

Why would a hard credit inquiry cause a drop in credit scores? As the Consumer Financial Protection Bureau (CFPB) explains, credit-scoring models generally look at how recently—and how often—you’ve applied for credit. So a single hard inquiry may have a relatively minor impact on your scores. But multiple hard inquiries—especially multiple hard inquiries over a short period of time—could have more of an impact.

Hard inquiries can also have more of an impact on your scores if you have few accounts or a short credit history, according to FICO.

Ultimately, as FICO explains, “The impact from applying for credit will vary from person to person based on their unique credit histories.” 

Keep in mind: Credit-scoring companies use different formulas, or models, to calculate credit scores. And there are many different credit scores and scoring models. Some credit scores even use different ranges. That means people may have more than one score out there.

Sometimes when you apply for credit, each application triggers a hard inquiry. That’s how credit card applications work, for example. That means applying for multiple credit cards over a short period of time will lead to multiple hard inquiries. And that could hurt your credit scores more than a single hard inquiry.

But some types of credit—like auto loans, student loans and mortgages—work a little differently. Shopping for auto, student or home financing within a short time frame—usually 14 to 45 days—could be treated as just a single hard inquiry. And that could have less of an impact on your credit scores than multiple hard inquiries could have over a short period of time.

So take it from FICO: “If you need a loan, do your rate shopping within a focused period such as 30 days. FICO Scores distinguish between a search for a single loan and a search for many new credit lines, in part by the length of time over which the inquiries occur.”

Hard inquiries can impact your credit. But rate shopping can help you minimize their impact. And there are other ways to manage the impact of hard inquiries too.

Here’s how:

• Check whether you’re pre-approved or pre-qualified. Before you apply for credit, pre-approval or pre-qualification could help you compare options and find the right fit—without triggering a hard inquiry. For example, Capital One's pre-approval tool can help you find out whether you’re pre-approved for some of Capital One’s credit cards before you even apply. It’s quick and only requires some basic info. And since it only triggers a soft inquiry, it won’t hurt your credit scores.
• Apply only for credit you need. As the CFPB explains, “Credit scoring formulas look at your recent credit activity as a signal of your need for credit. If you apply for a lot of credit over a short period of time, it may appear to lenders that your economic circumstances have changed negatively.” 
• Monitor your credit. Checking your credit reports regularly can help you stay on top of hard inquiries and other factors that impact your credit. You can get free copies of your credit reports from each of the three major credit bureaus—Equifax®, Experian® and TransUnion®—by visiting AnnualCreditReport.com.

Another easy way to monitor your credit? Use CreditWise from Capital One. With CreditWise, you can stay on top of your VantageScore® 3.0 credit score and TransUnion credit report without hurting your score. And with the CreditWise Simulator, you can explore the potential impact of your financial decisions before you make them.

But what if you’re not a Capital One customer? Don’t worry. CreditWise is free and available to everyone—you don’t have to be a Capital One customer to use it.