Does Your Credit Score Go Up When a Hard Inquiry is Removed?

If you have applied for a credit card or loan, you may have noticed that a hard inquiry was added to your credit report. A hard inquiry, unlike a soft inquiry, does lower your credit score anywhere from 5 to 10 points. So, does your credit score go up when a hard inquiry is removed from your credit report? We will answer this question in much detail below.

Does Your Credit Score Go Up When a Hard Inquiry is Removed?

Yes, after a hard inquiry is automatically removed from your credit report, your credit score may go up slightly. You should remember that every hard inquiry can knock down your credit score by 5 to 10 points. So, when such an inquiry is removed from your credit report, your credit score may go up a little bit. That said, if you’ve racked up multiple hard inquiries within a short period of time, you may see a substantial increase in your credit score when all of them are removed from your credit report.

So, what’s the difference between a hard inquiry and a soft inquiry?

Hard Inquiry

A hard inquiry affects your credit score and usually results when a person applies for a credit card, loan, or mortgage account. Hard inquiries involve a bank or lender making a decision as to whether to lend a person money and so they lower your credit score to alert other potential lenders that you’re actively seeking to borrow money.

Hard inquiries stay on your credit report for approximately 2 years. After the two-year period, the hard inquiry drops off your credit report and no longer causes a drop in your credit score. If you apply for too many credit cards or loans within a short period of time, you will see a substantial drop in your credit score. That said, once the hard inquiries drop off your credit report, you will see your credit score go up.

Soft Inquiry

A soft inquiry, on the other hand, results when you check your own credit, a potential employer checks your credit, or a lender wants to preapprove you for an offer. Soft inquiries do not impact your credit score because you’re not actively seeking to borrow money.

How Many Points Does a Hard Inquiry Drop Your Credit Score?

A hard inquiry can drop your credit score by 5 to 10 points. The number of points your credit score will go down depends on how strong of a credit history you have. The stronger your credit history, the less points your score will drop. Also, keep in mind that hard inquiries only remain on your credit report for 2 years. With time, the impact a hard inquiry has on your credit score lessens the older the inquiry becomes.

How to Avoid Too Many Hard Inquiries?

Although a single hard inquiry will not damage your credit score, having too many within a short period of time can. So, how can you avoid racking up too many hard inquiries? You should only apply for as much credit as you need. Also, you should check the requirements for the credit card or loan that you’re applying for before applying. For example, if you want to apply for an American Express Gold Card, you should check the requirements for the card before applying. If you believe you’re a good fit, only then should you apply for the card. This saves you from racking up unnecessary hard inquiries on your credit report.

CSP Pro Tip: Always try to keep your hard inquiries to a minimum. Racking up too many hard inquiries within a short period of time makes you look like you’re credit hungry. This is something that lenders do not like to see. As such, only apply for the credit that you need.

How to Avoid Too Many Hard Inquiries When Shopping for an Auto Loan?

Many our visitors complain that when they visited a dealership to buy a car, the dealership ran their credit through a number of banks. Each bank ended up placing a hard inquiry on their credit report. So, how can you avoid multiple hard inquiries when purchasing a car? To avoid multiple hard inquiries on your credit report, you can should look for a bank that is likely to approve you for an auto loan and apply for an auto loan with them. After you’re approved, you can go to the car dealership with an approved auto loan. This stops the dealership from running your credit through a number of banks looking to finance your car purchase and saves you from adding multiple hard inquiries to your credit report.

How Can You Improve Your Credit Score?

If you have multiple hard inquiries on your credit report that are causing a drop in your credit score, can you still improve your credit score prior to the hard inquiry dropping off your credit report? Yes, there are a variety of things that you can do in the meantime to improve your credit score. Here are some of the things you can do:

  • Make timely payments. Making timely payments on your credit and loan accounts is the best thing you can do to improve your credit score. Payment history accounts for 35% of your credit score, so make sure you don’t miss any payments and that you make them on time.
  • Don’t utilize too much credit. Don’t utilize too much of your available credit. It’s a good rule of thumb to keep your credit utilization below 30%. For example, if you have a $10,000 credit limit, you should keep the balance on your credit cards below $3,000. This ensures that your credit score does not drop due to high credit utilization.
  • Don’t apply for too much credit. You should avoid applying for too many credit cards and loans within a short period of time. This is so because every time you apply, a hard inquiry is added to your credit report. Although a single hard inquiry won’t lower your score by much, too many hard inquiries within a short period of time can cause a significant drop in your credit score.

Credit Score Planet Frequently Asked Questions

1) How many points does a hard inquiry affect credit score?

Each hard inquiry can drop your credit score between 5 and 10 points.

2) How long do hard inquiries affect credit score?

Hard inquiries remain on your credit report for 2 years. After the two-year period, the hard inquiry drops off your credit report and no longer impacts your credit score.

3) When does a hard inquiry show up?

A hard inquiry typically shows up as soon as you apply for a credit card or loan. You can check your credit report a few minutes after applying for credit and you will see the hard inquiry on your credit report.

4) How many hard inquiries are bad?

There is no set number, just try to keep hard inquiries at a minimum.

5) When does a hard inquiry drop off your credit report?

A hard inquiry drops off your credit report within 2 years. Once a hard inquiry drops off your credit report, you will see a small increase in your credit score.