Do Credit inquiries affect credit scores?

Yes and no. It depends on the type of inquiry.

There are two types on credit inquiries, a hard inquiry and a soft inquiry.

A hard inquiry is for situations like: Applying for a mortgage loan on a house, applying for a credit card, requesting a credit line increase on a credit card, applying for a car loan, applying for a student loan, and sometimes when a landlord reviews your credit history for an application to rent an apartment or house.

A soft inquiry isn’t usually done when trying to apply for some type of loan or credit. A soft inquiry can be checking your credit score, prequalifying for a credit card or loan (without fully applying, like when you are trying to find out how much you can afford but haven’t identified a house yet), employment background checks, applying for utilities or insurance, and in most cases, applying for a lease on a house or apartment.

Soft credit inquiries, though they may show up on your credit report, usually have no impact on your credit score.

Hard inquiries, however, can affect your credit score by 5-10 points. A hard inquiry stays on your credit report for two years, but only directly affects your credit score for one year.

A soft inquiry remains on your credit report for two years, but again, does not affect your actual score.

For more information, read a post on Experian’s blog about credit inquiries.

If you are considering buying a home in Baltimore, please contact me. I would love to help you navigate the home buying process – including referring you to a mortgage professional who can help you determine the best route forward on a loan.