How long does a hard credit inquiry affect your credit score?

Discussion in 'Credit Talk' started by BigPapa, Apr 26, 2012.

  1. BigPapa

    BigPapa New Member

    As you probably know, many, most or all financial institutions do hard pulls when you open various types of accounts with them, even if it is just a savings account and you are not requesting any credit. That sucks for my credit score because I open a lot of accounts for various reasons.

    Recently, this happened to me not once, but twice through a credit union I have an account at. They did one credit pull when I opened my initial accounts and another one when I added another account online. The second one was not necessary, but because of a system glitch they have it happened anyway.

    I am thinking about asking them to remove the second one, but don't want to bother depending on the answer to this question:

    How long does a hard credit pull affect your credit score? If it is say, less than a year, I probably won't bother. But if this has a long term negative impact on my score, no matter how small, I will have to try to get them to remove it.... something I am guessing I can get them to do, but I am not looking forward to since I am sure it will be a huge hassle.

    So that is my question ... How long does a hard credit pull affect your credit score?

    Does anyone know this?

    Thank you for any help.
  2. JoshuaHeckathorn

    JoshuaHeckathorn Administrator

    Hey BigPapa! A hard pull will effect your FICO scores for 12 months. After that point the FICO scoring model will ignore the hard pull even though it could remain on your credit reports for 2 years.

    I actually just wrote a blog post yesterday about some interesting facts FICO shared last week on their blog regarding credit inquiries and FICO scores. You might be interested in reading that too. Here's a link: New Data Shows Inquiries Have Little Effect on FICO Scores
  3. BigPapa

    BigPapa New Member

    Hey thanks so much for that answer! Very few things in life have a definitive answer. It's so gratifying when something does!

    And thanks for the blog link. I plan to read it as soon as I finish this post.

    Great blog! ... it already answered the first question I had here... so I edited it out.

    After reading your blog I don't want to be overly concerned about one hard pull. But as I said, I end up getting a number of them from opening checking and savings accounts, so I am probably a little bit of an outlier in the statistics. Anything I can remove, that wasn't there for a good reason might be a good idea if it isn't too much work.

    If I ask them to remove it from my record, is it a big deal for them to do or a simple task? I'm more inclined to ask them if it's a simple thing for them to do since I think I am more likely to be successful. If it's a big hassle for them I think they are more likely to say no.

    I'm wavering between asking and just forgetting about it. I don't think it will matter much over the next 12 months.

    Thanks again... great info!
  4. Heather L

    Heather L New Member

    Thank you for great blog post Josh. I just posted it on our FB account. I often get questions about inquiries as well. Thanks! Heather with BoostMyScore.NET
  5. hammerbill

    hammerbill New Member

    It is getting ridiculous. Over the past several years, I have had several people pull my credit and a couple of them told me that their pull would be a soft inquiry-on which basis I then agreed to let them. Then it was not. I tried to argue to the credit bureaus to remove the inquiries but they don't take my word. The sheer amount of abuse of verbal agreements now days is astounding. I have been outright lied to many times-including in these cases of inquiries. On one hand you can't prove anything because it is all verbal but on the other hand the amount of hassle one must go through to get all these simple things put in writing is a serious problem. All I can do at this point is warn people. It has not always been this bad.
    I really think any company that can put a hard inquiry on your credit record or can damage your credit record should be required by law to also place good information on your record should you pay on time.
  6. JoshuaHeckathorn

    JoshuaHeckathorn Administrator

    If you request that they be removed, the response you'll probably receive is a "no" because they'll argue they had permissible purpose to pull your credit. I would try disputing them through the CRAs first to see if you get lucky. If that doesn't work, then you can try writing directly to the information furnisher.

    Hard inquiries shouldn't be done for something like a savings account - I personally think that's just ridiculous. What does saving money have to do with your credit risk?
  7. BigPapa

    BigPapa New Member

    I totally agree. Clearly, they use your application for a savings account as an excuse to violate your privacy. When you give them your money to hold, it is *you* who should be interested in *their* credit rating.

    On the other hand, I am not a proponent of endless regulation in the financial industry. You could ask "why doesn't congress just pass a law that prevents hard credit inquiries if no credit is involved." Well, I suppose they could. But on the other hand if you don't want to use their service, that's your prerogative.

    Another thing is that it's not always that straight forward. If you open a checking account with overdraft protection, for example, that's credit. They would be entitled to know if you are credit worthy before granting you that privilege.

    So far I have never seen a hard credit pull that didn't require me to give written consent first. The problem is, if you don't give the consent, you can't have an account. Also, a trend these days is to make you sign consents for just about everything even if they never intend to do the thing you are consenting to. I have seen that when you sign up for financial accounts online, for example. Some places make you sign the e-delivery agreement for your statements and such even if you will be getting paper statements. This type of thing gives them a pass to exercise the agreement at some later date whether you want them to or not.

    I'm not an expert in how the credit reporting process works, but from a general legal standpoint, if you have never given permission for a written hard pull, then I think you have a very good chance of having it undone. The problem is what you have to go through to make that happen. By the way, in general, verbal agreements are legally valid in many cases (not all), but if there is a written agreement that you signed, covering the same thing, it usually supersedes the verbal one. Chances are that if you had a hard pull, you did something that gave them permission to do it in writing at some point unless you opened the account a very long time ago before they worried about making you sign such things. So it probably doesn't make any difference what they told you after that, your written permission is what counts.

    In my case, I'm probably just going to forget this hard pull and move on. I am planning to leave this institution in a few weeks anyway. They left me with not one, but 2 hard pulls. Good riddance.
  8. Greatorex

    Greatorex New Member

    In my days of opening up checking, savings, and credit accounts with Wells Fargo, there was one little option that I made sure to switch for everybody people in this situation.

    The system WF (and probably other banks) uses to open accounts lets the banker choose between a "Credit account" or "Deposit account," and it is automatically toggled to credit. If the banker is unaware, he or she will just click continue and the bank will do a hard inquiry (which they require for credit/checking accounts). However, if the banker takes that extra second and changes "credit account" to "deposit account" when opening a savings, no hard inquiry will be done. But they HAVE to do this manual switch of account types.

    It is unfortunate that more bankers and consumers aren't aware of this, because you're all correct - hard inquiries should not be done for savings accounts.

    It's also unfortunate that consumers do actually sign for the credit pulls, but 99% of them don't care to read what they sign...nor do a majority of bankers actually know what they're having people sign.
  9. JoshuaHeckathorn

    JoshuaHeckathorn Administrator

    I find it very interesting that it would be automatically toggled to "credit" for savings accounts too. That just doesn't make sense to me.

    Anyway, let this serve as a reminder to all consumers that you need to be proactive about this kind of stuff. You can't always expect that the banker actually knows what he/she is doing and has your best interest in mind.

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