Having a good credit score is essential if you want purchasing power to buy things like a fancy new vehicle or a brand-new home. While many things affect your credit score, one item people don’t think about is the credit inquiry or credit check.

Let’s look at what credit inquiries are and how they affect your credit score. 
What Is A Credit Check?
Stated by a credit repair company, a credit check or inquiry is what happens when you apply for a line of credit, and the company looks at your credit report. They essentially make an inquiry into your credit score and credit history. 
Credit score
Remember, though; there are two types of credit checks: the hard inquiry and the soft. Soft inquiries don’t affect your credit score. According to Experian.com:
“A soft inquiry occurs in cases where you check your credit or when a lender or credit card company checks your credit to pre-approve you for an offer.”
Hard inquiries occur when the lender checks your credit report to decide whether to give you a loan or credit card. It’s the hard inquiry that affects your score.
How Does The Hard Inquiry Affect Credit Scores?
The primary way a hard inquiry affects your score is having too many in a short time. Many lenders see several newly opened accounts or attempts at opening in a short time as a red flag. Lenders see this as a risk as a person may be having trouble paying their bills or is not financially responsible.
Remember, however, that this mainly applies to credit cards; applying for multiple student loans, auto loans, or home loans doesn’t affect your credit score much because it’s seen as rate shopping, and it’s generally treated as a single inquiry.
What Impact Do Hard Inquiries Have On Credit Scores?
What happens to a credit score because of multiple hard inquiries differs from person to person. Depending on your credit history, you may not see as much of an impact as someone else, even if you both have multiple hits to your credit report.
MyFico.com says,
“. . . the full range for FICO scores is 300-850. The impact on your credit score matters based on your credit history. For example, if you have a short credit history and few accounts, your score will take a bigger hit than someone with a long credit history and more accounts.”
The reason multiple hard inquiries are bad, according to MyFico.com, is, “Statistically, people with six inquiries or more on their credit reports can be up to eight times more likely to declare bankruptcy than people with no inquiries on their reports.” 
If this statement resonates with you, consider waiting to make large purchases so you can either pay outright or you don’t have credit inquiries too close to each other. We know how enticing that brand new car may be, but try waiting for at least an extra 6 months before driving it off the lot. 
What Can You Do?
While hard inquiries remain on your credit report for up to two years, their impact lessens with time. If you see your score drop significantly because of multiple hard inquiries, don’t panic. Credit checks only make up 10% of your FICO score. 
Lenders tend to look more closely at payment history and credit to debt ratio when making decisions to lend. Also, provided you don’t get any more hard inquiries for a while, your credit score will gradually go back up.

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