Subject 1, Day 13: Hard Inquires.
You get one every time you apply for a new credit product in a unique 24-hour period. Aim to have 4 or less of these within a span of 2 years and you’re golden. As they will fall off after that.
When applying for credit, it's crucial to understand hard inquiries as they play a significant role in your credit profile. A hard inquiry occurs whenever you apply for a new credit product, which can slightly lower your credit score. However, it's important to keep these inquiries to a minimum. Ideally, aim for four or fewer hard inquiries within a two-year span to maintain healthy credit. Hard inquiries will eventually fall off your credit report after two years, but during that time, they can affect your score. This is particularly important if you're planning to make significant financial moves, such as applying for a mortgage or car loan. Lenders typically look at your credit report to gauge your creditworthiness, so managing hard inquiries effectively can help secure better interest rates and terms. Additionally, it's essential to differentiate between hard and soft inquiries. Soft inquiries do not affect your credit score and occur during services like pre-approval checks or personal credit checks. Monitoring your credit regularly can help you understand how different types of inquiries impact your score and adjust your credit behavior accordingly.
