What Is a Hard Inquiry?

Credit report overview
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What is a Hard Credit Inquiry?

A credit report inquiry occurs when a business looks into your credit report. A business will do this because all of your credit report inquiries made within the past two years are listed in a dedicated section on your credit report. This makes it easy for others to get a clear sense of your credit standing.

It's important to know that not all inquiries are equivalent. Some inquiries are made when a business checks your credit report without any action on your part to prescreen you for certain products or services. These are called soft inquiries, and there's nothing to fear.

Inquiries made as the result of an application you have made are hard inquiries. Hard inquiries are sometimes referred to as a hard pull because the creditor has pulled your credit report. In some cases, a creditor or lender will tell you which type of inquiry is going to be made so you can decide whether or not you want to proceed with your application or request.

How Hard Inquiries Appear On Your Credit Report

When you check your credit report, you'll see both hard inquiries and soft inquiries together in a list. However, only the hard inquiries will impact your credit score.

Soft inquiries do not impact your credit score and they don’t appear on the version of your credit report that other creditors and lenders see. For example, if a company has checked your credit report to determine whether to send you a prescreened offer, that inquiry won’t show up when a mortgage lender checks your credit report because you’ve applied for a mortgage loan.

How Hard Inquiries Impact Your Credit Score

All inquiries—hard inquiries and soft inquiries—remain on your credit report for a two-year period. But, only hard inquiries will impact your credit score and only for one year.

Inquiries are 10 percent of your credit score. If there are too many hard inquiries, that can cause your credit score to drop by several points and lead to denied applications. That's because lenders think you may be applying for too much credit because you aren't solvent.

That said, hard inquiries won’t always affect your credit score. For example, FICO (the credit scoring service and developer of the most commonly used FICO score), says a number of other factors come into play in addition to the inquiry. These factors include the number of accounts you’ve recently opened, the number of recent credit inquiries, how much time passed since you opened your last account, and the time since your last inquiry. As a result, many people won’t be affected by an additional hard inquiry.

A Cautionary Note About Applications

It’s safe to assume that the longer it’s been since your last inquiry and the fewer recent inquiries you have, the less impact a new inquiry will have on your credit score. It’s important to keep your applications for credit to a minimum to protect your credit score. A large number of inquiries indicates a higher risk of default and likelihood of future bankruptcy.

If you’re shopping for a mortgage or auto loan, you may have dozens of inquiries appear on your credit report as lenders try to qualify you for the loan. Fortunately, all loan-shopping inquiries made within a certain timeframe are treated as a single inquiry. The timeframe ranges from 14 days to 45 days and depends on which credit scoring model is being used to calculate your credit score.