What are Hard Credit Inquiries?

Hard credit inquiries are requests to check your credit report to help lenders or credit card issuers make a lending decision. This is also known as a hard pull on your credit report. It occurs anytime you are getting a loan or new credit card, and unlike soft credit inquiries, hard inquiries can have a negative impact on your credit score.

On your credit report, the credit bureaus may categorize these inquiries differently. For example, TransUnion calls them “regular inquiries,” Equifax calls them “inquiries in the last 12 months,” and Experian calls them “requests viewed by others.”

How hard pulls affect your credit score:

Hard inquiries may or may not affect your credit score. For many people, one additional credit inquiry may not affect their score at all. For others, one additional inquiry may lower their FICO score by 5 points. Although one hard inquiry may only drop your credit score by a few points, multiple hard inquiries in a short time can cause significant damage to your score. This scoring is dependent on such factors, including:

a)      Number of recent credit inquiries
b)      How recent your last inquiries were
c)      Number of recently opened accounts
d)      How recent your last account opening was

Inquiries also have a larger negative impact on your credit score if you have few accounts or a short credit history.

Each type of credit checks counts as one inquiry with the exception of when you are “rate shopping.” This is when your credit score considers all inquiries within a 14 or 45 day period (depending on which model is being used) as a single inquiry. You can avoid lowering your credit score by doing your entire rate researching, such as for a mortgage or an auto loan, within this short period of time.

Remember, hard inquiries should be minimized as much as possible. Applying for too much credit may signal that you are desperate for credit or that you weren’t able to qualify for credit. Having a large number of inquiries on your credit report indicates to lenders that you are a greater risk and you are more likely to declare bankruptcy than people with no inquiries on their reports.

Disputing Hard Credit Inquiries

If a hard inquiry occurred without your permission, you can attempt to dispute it. However, if you authorized the hard inquiry, you will have to wait two years before it falls off your credit report.

Learn about how to dispute unauthorized inquiries on your credit report.