Hard Inquiry: What Is It?

by Stable MARK | Updated: December 6, 2022
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A hard inquiry is when a lender checks your credit report to make a lending decision.

Have you ever been confused about what a "Hard Inquiry" is and why it affects your credit score? We'll give you the lowdown on the basics of this important financial concept so that you can make smart decisions when it comes to your finances.

Hard Inquiry: What Is It and How Does It Affect Your Credit Score?
Image 1: Hard Inquiry: What Is It and How Does It Affect Your Credit Score?

What Are Inquiries on Your Credit Report?

As you probably know, your credit report is a record of your credit history. It includes information about your credit accounts, your payment history, and any public records or collection items related to your credit. Inquiries are one of the types of information that can be included on your credit report. Inquiries occur when someone accesses your credit report for the purpose of considering you for a loan or other type of credit. When an inquiry is made, it's recorded on your credit report along with the date and the name of the organization that made the inquiry. Inquiries stay on your credit report for up to two years, but they have less impact on your credit score after 12 months. There are two types of inquiries: hard inquiries and soft inquiries. Hard inquiries are made when you apply for a loan or other type of new credit. These inquiries can slightly lower your credit score. Soft inquiries are made when you check your own credit report or when companies check your report for pre-approved offers of credit. Soft inquiries don't affect your credit score. If you see an inquiry on your credit report that you don't recognize, it could be the result of identity theft. If you're concerned about an inquiry on your report, you can contact the organization that made the inquiry to find out more information.

What Is A Hard Inquiry?

A hard inquiry is an inquiry made by a potential lender in order to obtain your credit report. This type of inquiry is also sometimes called a "hard pull." Hard inquiries are generally initiated when you apply for new credit, such as a credit card, mortgage, or auto loan. But they can also occur if you're trying to lease an apartment or get insurance. While hard inquiries can negatively impact your credit score, they are not necessarily a red flag. Lenders typically only make hard inquiries when they are seriously considering extending your credit.

Is A Hard Inquiry Affecting Your Credit Score?

A hard inquiry is when a lender or creditor checks your credit report to make a decision about whether or not to extend your credit. This can happen when you apply for a loan, credit card, or mortgage. Hard inquiries can negatively affect your credit score and may stay on your report for up to two years. While one hard inquiry may not have a significant impact on your score, multiple inquiries can add up and cause your score to drop. That's why it's important to only apply for credit when you need it. If you're shopping around for the best interest rate on a loan, be sure to do so within a 30-day period, as multiple inquiries within this time frame will count as just one inquiry.

How Many Hard Inquiries Are Too Many?

If you're looking to get a loan or credit card, you may be wondering how many hard inquiries are too many. After all, if a lender sees that you've been applying for credit too frequently, they may be less likely to approve your application. In general, having too many hard inquiries in a short period of time can be seen as a red flag by lenders. This is because it may indicate that you're in financial distress and are trying to take on more debt than you can afford. If you're planning on applying for credit in the near future, it's best to avoid having too many hard inquiries on your report. If you're not sure how many is too many, aim for no more than two or three inquiries in a six-month period.

How Long Does a Hard Inquiry Last?

Hard inquiries can stay on your credit report for up to two years, but they only affect your credit score for the first year. After 12 months, hard inquiries will fall off your credit report and will no longer impact your credit score.

Is Checking My Own Credit Score Will Be Considered As A Hard Inquiry?

No, checking your own credit scores will not result in a hard inquiry. A hard inquiry is only generated when you apply for new credit. Instead, it will be reported as a soft credit check or soft inquiry.

What Is A Soft Inquiry?

A soft inquiry is a type of credit check that has no effect on your credit score. Soft inquiries can be made by lenders, landlords, employers, and others who are considering you for a loan, apartment, job, or another type of opportunity. Soft inquiries may include a review of your credit report, but they will not harm your credit score as a hard inquiry would.

A soft inquiry is a type of credit inquiry that doesn't impact your credit score. Soft inquiries can occur when you check your own credit report, when an employer checks your credit as part of a background check, or when a lender pre-qualifies you for a loan. While soft inquiries are not harmful to your credit, they can still be seen by creditors and others who pull your report. That's why it's important to know what they are and how they differ from hard inquiries.

Hard Credit Inquiries And Soft Credit Inquiries In Examples

What's the difference between a soft credit inquiry and a hard credit inquiry? A hard credit inquiry is when a lender requests your credit report with the intent of approving you for a loan or extending your credit. This type of inquiry will usually result in a small, temporary dip in your credit score. A soft credit inquiry is when an organization checks your credit report for informational purposes only. These types of inquiries do not affect your credit score.

Common Hard Inquiries

  • Applying for a new credit card
  • Taking out a loan
  • Obtaining an auto loan

Common Soft Inquiries

  • Checking your own credit score
  • Applying for an apartment or rental home
  • Subleasing your apartment or home
  • Ending a cell phone contract with your current provider

How To Dispute Hard Credit Inquiries?

The first step is to identify which credit bureau(s) the inquiry was made through - each bureau has its own process for disputing inquiries. Once you've located the correct contact information, you'll need to provide supporting documentation explaining why the inquiry is inaccurate. This could be something like a letter from the creditor stating that they did not authorize the inquiry or proof that you applied for credit with a different company. Once you've submitted your dispute, the credit bureau will investigate and determine whether or not to remove the inquiry from your report. If they find that the inquiry was indeed unauthorized or inaccurate, it will be removed, and your credit score will be unaffected. However, if they determine that the inquiry is valid, it will remain on your report but should have minimal impact on your credit score going forward.

How To Reduce The Impact Of Hard Credit Inquiries?

If you're looking to minimize the effect of hard credit inquiries, there are a few things you can do:

  • First, make sure you have a solid credit history and a good credit score. This will make it less likely that an inquiry will have a negative impact on your score.
  • Second, if you're shopping for a loan or credit card, try to get all your applications in within a 14-day period. This way, the inquiries will be grouped together and won't have as much of an impact on your score.
  • Finally, if you have any questions or concerns about an inquiry, be sure to contact the lender directly. They may be able to help you understand the impact it will have on your credit score.

The Bottom Line

Hard inquiries are an important part of the credit score process, but it's important to keep them to a minimum. Remember, any time you compare lenders and their rates for financial products, a hard inquiry may be necessary. Otherwise, avoid unnecessary hard inquiries, as they can have a negative impact on your credit score. Being mindful of when and where you submit a hard inquiry is the best way to protect your credit score and maintain a good credit history.

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