Too Many Recent Inquiries in the Last 12 Months

Some consumers find that their applications for new credit are denied due to having too many recent inquiries in the last 12 months. If you have been denied credit for this reason, there could be a couple of underlying problems causing the lender to deny your application.

“Too Many Recent Inquiries in the Last 12 Months” Credit Bureau Risk Score Factors
Equifax 8
Experian 8
TransUnion 8
NextGen T5

First of all, a lender may feel that you are desperate for new credit. Such desperation is a sign that something else has occurred. Loss of a job, a medical emergency or some other financial crisis could be prompting you to apply for credit so that you can temporarily continue to pay your other bills. Even if you fail to open an account, simply applying for credit lowers your score. Failure to open the account suggests that you were denied credit, even if the application was approved but you changed your mind.

Lenders also may balk if they feel you are hastily taking on new credit. Attempting to open many new accounts in a short period of time indicates that you are not using your credit wisely. A lender wants to see that you can handle your current accounts before attempting to open a new one.

Finally, lenders want to know that you will be using the account if it is opened. They incur certain costs to supply the account to you and want to ensure that  their return on investment will be profitable.

Fair Isaac credit risk models reserve 10% of the credit scoring formulas for new credit. Attempting to open several credit accounts in a 12 month span is detrimental to your credit scores, since it indicates risky consumer behavior. Those inquiries actually remain on your credit reports for 24 months. Most of the damage associated with opening a new account is limited to the first year, with particular emphasis on the most recent 6 month period.

If you have received this error code in response to a credit application, understand that the lender is concerned that you are trying to take on more debt than you can handle. This is a well-documented risk factor that is incorporated in credit scoring formulas. The best response is to actually postpone future credit applications. Give your credit profile some time to heal. Focusing on other scoring components such as paying down your debt balances may allow your scores to increase more rapidly, clearing the way for new credit approvals down the road.

Too many recent inquiries in the last 12 months is Code 8 on FICO-based credit scoring products. It is code T5 on NextGen scoring products. For more information on credit scoring, see the complete list of credit score factors.

Kenneth Long
Follow me

Kenneth Long

President at Debtors Unite
Kenneth Long is President of Debtors Unite, Inc. as well as President and Vice Chairman for Vision Credit Education, Inc. He served as a regional coordinator for the North Carolina Saves campaign. Long co-founded the Wake EITC Coalition along with Family Resource Center of Raleigh.

Long is a graduate of the University of North Carolina at Chapel Hill with a B.A. in Industrial Relations. He subsequently received his Certificate in Nonprofit Management from Duke University. His Certificate in Financial Planning was issued by Florida State University.

Long has achieved the Accredited Credit Counselor and Accredited Financial Counselor certifications through the Association for Financial Counseling, Planning and Education. Long originally achieved the Certified Credit Counselor designation through the National Institute for Financial Education.

In addition to years of nonprofit leadership, Long has been an innovator in the field of volunteer tax return preparation programs. He assists volunteer associations and nonprofit organizations who seek to integrate credit counseling and asset-building programs with free personal income tax preparation. His approach to using free credit reports as both an incentive and a screening tool for placement into asset-building programs has been shared with members of the National Community Tax Coalition, the EITC-Carolinas Initiative of MDC, Inc. and nonprofit groups across the Carolinas.

Long assists members of our armed forces in the Carolinas, Iowa, Rhode Island, Georgia and Germany with financial readiness. Please support our Soldiers, Marines, Airmen and Sailors!

Favorite quote:

"The democracy will cease to exist when you take away from those who are willing to work and give to those who would not."

Thomas Jefferson
Kenneth Long
Follow me

Latest posts by Kenneth Long (see all)