Why? Why? Why?

Why in the world do credit companies report every time you apply for something? Occassionally, you need to apply for several different accounts before you find one you're accepted for. This can lower your credit score significantly, according to my friends. Is this just a short-term, temporary lowering of your score, or what?
~I'm credit-ignorant. I want to kill my parents for teaching my brother everything they know and teaching me NOTHING about credit/finances.

New credit accounts for 10% of the FICO equation. A Hard can drop your score +/- 7 points. It will remain on your CR for about 24 months. The effect on your score will lessen after 6 months.

Hard inquiries are those that are initiated by a merchant when you request credit and yes they do ping your credit score slightly. Soft inquiries are those that are initiated by you, ie your free annual credit report from one of the 3 bureaus, and do not affect your credit score.

But to answer your question, I guess they have to enforce a slight penalty for hard inquiries so people with horrible credit can't simply play a numbers game and apply for an infinite number of lines of credit. Even a person with horrible credit will eventually be approved. I guess they want to avoid this horrible credit score from being approved.


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