What are inquiries and how do they affect score?
Credit inquiries are requests by a “legitimate business” to check your credit.

As far as your score is concerned, credit inquiries are classified as either “hard inquiries” or “soft inquiries” – only hard inquiries have an effect on your score.

Soft inquiries are all credit inquiries where your credit is NOT being reviewed by a prospective lender. These include inquiries where you’re checking your own credit (such as checking your score in my credit), credit checks made by businesses to offer you goods or services (such as promotional offers by credit card companies), or inquiries made by businesses with whom you already have a credit account.

Hard inquiries are credit inquiries where a potential lender is reviewing your credit because you’ve applied for credit with them. These include credit checks when you’ve applied for an auto loan, mortgage or credit card. Each of these types of credit checks counts as a single credit inquiry. One exception occurs when you are “rate shopping”. That’s a smart thing to do, and your CREDIT score considers all inquiries within a 45-day period for a mortgage, an auto loan or a student loan as a single credit inquiry. This same guideline also applies to a search for a rental property such as an apartment. These inquiries are usually recorded by the credit bureau as a type of real estate-related inquiry, so the CREDIT Score will treat them the same way. You can avoid lowering your CREDIT Score by doing your apartment hunting within a short period.

Inquiries may or may not affect your CREDIT score. A CREDIT score takes into account only voluntary inquiries that result from your application for credit. The information about inquiries that can be factored into your CREDIT score includes:

The number of recently opened accounts, and proportion of accounts that are recently opened, by type of account.

A number of recent credit inquiries.

Time since recent account opening(s), by type of account.

Time since credit inquiry(is).

A score does not take into account any involuntary inquiries made by businesses with whom you did not apply for credit, inquiries from employers, or your own requests to see your credit report.

For many people, one additional credit inquiry (voluntary and initiated by an application for credit) may not affect their CREDIT score at all. For others, one additional credit inquiry would take less than 5 points off their CREDIT score.

Inquiries can have a greater impact, however, if you have few accounts or short credit history. Large numbers of inquiries also mean greater risk: people with six inquiries or more on their credit reports are eight times more likely to declare bankruptcy than people with no inquiries on their reports.