Will 3 inquiries hurt my credit score?

Credit Inquiries and Your Credit Score

Credit inquiries are checks performed by lenders to assess your creditworthiness when you apply for credit, such as a loan or a credit card. While necessary for lenders to make informed decisions, multiple inquiries can impact your credit score.

How Inquiries Affect Your Score

Each time a lender checks your credit, it typically results in a “hard inquiry” on your credit report. Hard inquiries can temporarily lower your credit score, as they indicate that you are actively seeking new credit.

Managing Multiple Inquiries

Generally, three inquiries within a short period, typically within the same scoring model timeframe (usually 12-24 months), are considered manageable by most credit scoring models. This means that your credit score should recover within around six months, as the impact of these inquiries gradually diminishes over time.

Excessive Inquiries

However, if you exceed a certain threshold of inquiries within a short period, it could raise concerns for lenders. Excessive inquiries may suggest that you are taking on too much debt or that you have a high-risk financial profile. This could lead to a more significant and prolonged impact on your credit score.

Be Mindful

To minimize the impact of credit inquiries on your score, it is advisable to be mindful of the following:

• Only apply for credit when necessary.
• Avoid applying for multiple lines of credit in a short period.
• If you are not sure whether to apply for a certain line of credit, consider using a credit monitoring service that offers “soft inquiries,” which do not affect your score.

Conclusion

While multiple credit inquiries can affect your credit score temporarily, three inquiries within a manageable time frame are generally not a cause for concern. However, it is crucial to be mindful of excessive inquiries, as they could potentially have a more significant impact. By managing your inquiries responsibly, you can maintain a strong credit score and secure favorable terms on future credit applications.