Hard credit inquiries occur when a prospective lender checks your credit report to make a lending decision. Hard credit inquiries can slightly lower your credit score. They will typically stay on your report for a few years. In the overall process of debt management, it is important that you have your credit intact.
Hard Credit Inquiries – What Are They?
Hard credit inquiries occur when you apply to take out a loan such as a mortgage, car loan, or even a new credit card. Unlike soft credit inquiries, hard credit inquiries will have an impact on your credit report, so it’s important to stagger seeking prospective loans until your score has had time to recover. So, rather than apply for a credit card, mortgage, and auto loan on the same day, try to spread them out! Otherwise, the multiple dips in your score from the hard credit inquiry can put you at risk for not qualifying for your loans.
Too Many Hard Credit Inquiries?
Your request for new credit may be subject to denial because of too many hard credit inquiries. In such situations here are some things you can do.
Take a short break
Making credit requests too often can lead to too many hard inquiries. These stay on your credit report for about two years, although it stops impacting your score after one year. So, if you’ve recently had a credit check, postpone your credit application a while before you apply for the new rewards credit card. You will find just as good a deal after a 6-12 month break!
Focus on the cards you have
In the meantime make the most out of your current credit cards. Work on paying off your credit card debt on time and in full. Make sure you are maximizing on the rewards offers on your current credit cards. How are you managing your cash back? Are you maintaining the right credit utilization ratio? How are you using your rewards on your travel credit cards? Are you making use of the opportunities to earn double the points or extra cash back?
Consider cards you’ve never looked at before
Don’t forget to do your research on the many different credit card offers out there in the market. There are plenty of rewards cards to consider other than the handful you’ve had your eye on lately.
If you’re struggling to pay off debt, ACCC can help. Schedule a free credit counseling session with us today.