How Much Does Pulling My Credit Really Hurt?

How and why do hard pulls impact your credit score?

Just like search engines that use secretive algorithms to deliver search results, credit bureaus determine your credit score using private equations. This is why your credit score can differ from credit bureau to credit bureau. Your credit score summarizes your credit report by grading it using a three-digit credit score, usually from 350 - 850. The higher your score, the better.

Because the information on exactly how credit scores are determined is not available, it’s hard to say exactly how much hard pulls affect your credit. What we do know is that each bureau considers the number of hard pulls in your credit history and can lower your credit score if there are multiple inquiries over an extended period of time.

How can you avoid hard pulls lowering your score?

When several hard pulls take place within 30 days, credit agencies usually assume you are shopping for the best terms and classify those pulls as a single inquiry. That’s why you are often advised to shop around with different lenders for thirty days or less.

What do hard pulls mean to lenders?

From the perspective of lenders, a high number of hard pulls in a short period of time could suggest that a borrower is taking on debt too quickly. According to Equifax, borrowers with six or more hard pulls on their credit, are many times more likely to declare bankruptcy sometime over the next two years.

What else is affected by hard pulls?

The BNI number on a credit report predicts the likelihood of the borrower to declare bankruptcy. We’ve already mentioned that FICO research suggests that borrowers with six or more hard pulls on their credit report are at greater risk of bankruptcy. Like your credit score, your BNI (Bankruptcy Navigator Index) can be negatively impacted by excessive hard pulls.

How much will each hard pull lower your credit score?

Each hard pull can lower a borrower’s credit score from between 5 and 10 points.

That means a hard pull has a relatively minor effect on your overall credit score. However, the more hard pulls are recorded, the more your credit score could fall.

Overall, lenders are primarily concerned with your debt repayment history. If you make debt repayments on time and in full your credit score will be high despite a large number of hard inquiries.