Q: From reading your website I know that credit pulls will damage my credit score, but how many does it take to really make a negative impact?
A: Even one hard credit pull can negatively affect your score.
It isn’t something to worry too much about, however. A single hard credit pull will only affect your score a few points — generally around 5.
Each subsequent pull can drop it a few more points. However, there is a limit to how far it will drop. This is because credit pulls, also known as credit inquiries, make up only 10% of your credit score.
When you shop around for a good rate on the same type of loan, these credit pulls will often be grouped together. This limits the impact comparison shopping can have on your credit. Which is a good thing. As we don’t want to discourage getting a second opinion or two.
For example, if you check with one car dealership to see what your interest rate would be, then check with another a few days later, this will usually count as one credit inquiry instead of two. So this will only drop your score a few points.
Thankfully, these applications for new credit do not stay on your credit report for long, especially when compared to bankruptcies.
While a bankruptcy can stay on your credit report for 7 to 10 years (depending on the type), a credit pull will only stay on there for 2 years, and will only affect your credit score for 1 year.
Want to learn more about how credit scores are calculated? Looking for a free copy of your score? Maybe you want to improve your credit profile.
Then you need to check out all of our guides to credit scores. Start by clicking here. And start yourself on the road to financial freedom.