Suppose you request three mortgage quotes in two weeks. Each lender may check your credit, but a scoring model may count those checks as one inquiry rather than three. The distinction matters when you compare loan offers. So do the dates of the checks and the kinds of credit you apply for.
How scoring models group rate-shopping inquiries
When you apply for a loan and authorize a lender to request your credit report, the request is generally recorded as a hard inquiry. Hard inquiries may affect your score. A lender reviewing your report may also see them.
Scoring models make an allowance for rate shopping. According to the Consumer Financial Protection Bureau (CFPB), inquiries for the same type of loan made within a period of 14 to 45 days are treated as no more than one inquiry, depending on the model. That lets someone compare offers for one loan without having every lender check count separately in the score.
The window is not identical across scoring models or versions. A 45-day span is useful to understand the outer limit described by the CFPB, but it does not mean every model uses 45 days. The scoring provider’s documentation is the place to check a particular model’s rules.
Why the loan type and the date matter
There is a second timing rule to keep separate from grouping. The CFPB says that, under the most common scoring models, student loan, auto loan and mortgage inquiries made within the 30 days before a score is calculated have no effect on that score. The 14-to-45-day rule addresses how inquiries made while shopping for one loan are counted. The 30-day rule addresses certain recent inquiries when a score is calculated. They describe different parts of the process.
What if you shop for an auto loan and a mortgage at the same time? Those are different types of loans, so their inquiries generally are not combined into a single rate-shopping inquiry. Checks spread beyond the applicable window may also count separately. For mortgage shopping, the CFPB explains that multiple lender checks within 45 days have the same scoring impact as one check, provided the last check falls within 45 days of the first.
The sources describing these rules do not establish a comparable rate-shopping window for credit card applications. An application for a card is a separate request for credit, even if it happens while you are comparing mortgage offers. That is one reason to ask what kind of check an application will involve rather than assuming all checks made close together receive the same treatment.
How much can one inquiry matter?
For most people, one additional hard inquiry lowers a FICO Score by fewer than five points, according to myFICO. FICO Scores range from 300 to 850. The effect can be greater for someone with few accounts or a short credit history, because the score has less information to draw on. No single point estimate applies to everyone or to every scoring model.
Also, not every credit check is hard. Checking your own report is a soft inquiry and does not affect FICO Scores. Preapproval screenings can be soft inquiries, too. Checks by existing creditors reviewing your report generally should not hurt your score, according to the CFPB. If the distinction is unclear, ask before submitting information for a check.
A possible inquiry effect is only one part of comparing loan offers. The CFPB notes that shopping can still be worthwhile when a check falls outside the 45-day mortgage window. Its mortgage shopping guidance cites potential savings of $600 to $1,200 per year from getting multiple offers. That is an illustration, not a savings forecast for any particular borrower. Loan terms and market conditions determine the actual difference.
Questions to ask before submitting applications
Start with the calendar: Are the planned checks for the same type of loan, and how close together will they occur? Then ask whether a lender expects to check your credit again later. A later hard inquiry outside the applicable window may be counted separately. You can also ask whether a particular step involves a soft or hard inquiry.
For a mortgage, a written Loan Estimate gives you a standard document for comparing offers. Under CFPB rules, a lender must provide one within three business days after receiving six pieces of information: your name, income, Social Security number, property address, estimated property value and requested loan amount. Comparing the estimates side by side can show differences that an inquiry count alone cannot.
Finally, remember what the inquiry rules cannot tell you. The sources here do not provide a complete formula for every score version, and a lender may use a model different from one you have seen elsewhere. For questions about how your own inquiries appear, check your credit report and the relevant scoring provider’s official information. A qualified professional can help with questions specific to your circumstances.
Please seek a professional. This article is general information, not financial, tax or insurance advice. Please seek a licensed financial, tax or insurance professional about your own situation.
