For most people, according to FICO, a new hard credit inquiry will only drop your credit score between one and five points. While a hard inquiry stays on your credit report for two years, it only impacts your score for one year.
However, there is a way around racking up multiple hard inquiries if you’re rate shopping for a loan or mortgage. Here’s how.You can typically check your interest rate with a lender without a hard credit check through a prequalification process. After you prequalify and choose a lender, that’s when it will run a hard credit check.
The time period you have to complete your rate shopping varies. FICO has many different credit scoring models that lenders can request. For some of these models, your rate-shopping period is 14 days, while for others, it’s 45 days. Plan on doing all of your rate shopping within the same two-week period if you can to be on the safe side.If you’re preapproved for a mortgage or loan, it can take some time before you actually find the house or the car you want to buy.
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