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Hard Inquiry: How Does It Impact Your Credit Score?

  • Auto Refinance
  • Natasha Young
  • 8 minutes

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Your credit history is important when you are applying for a loan. Your lender will review your credit report before approving your loan. That’s when hard inquiry makes an entrance. And it will take away a few points from your credit score. Read to know more. 

What are the inquiries on your credit report? 

When you apply for credit from a bank or credit card company, they will certainly look up your history. Before you ask for new credit, you can check your credit report to know what your lender gets to see. Lenders mainly consider your payment history and how much you owe on loans and credit cards to decide if they want to work with you. 

Lenders will consider you risky if you’ve missed a few payments because you’re likely to miss a payment again in the future. That could make getting a loan difficult or cause your interest rates to go up. To get the information they need, the lender must ask for your credit report from the credit companies. This is called a hard inquiry. In turn, that request will show up on your credit report. 

On the other hand, a soft inquiry has nothing to do with a specific loan or credit card application. Soft inquiries happen when you check your credit or when a company wants to see if you qualify for a loan offer before your application. Your credit score won’t change if you make a soft inquiry. 

What is a hard inquiry? 

A hard inquiry, also known as a hard pull or credit check, needs your permission. When you ask for credit, like a mortgage, credit card, auto loan, student loan, or personal loan lenders prefer having a hard pull of your credit report. A hard inquiry will show up on your credit record and will stay on your credit record for about two years. But it won’t affect your credit score after less than a year. 

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How many hard inquiries are too many? 

There is no particular number of hard inquiries that are considered safe. If you have a good credit score, hard inquiries won’t hit it as you expect them to.  Having one or two hard inquiries on your credit report could lower your scores by a few points, but it’s unlikely to have a significant dip.  

Though, having a lot of hard inquiries in a short amount of time is likely to hurt your scores more. This is due to the fact that lenders and credit scoring models view frequent credit application activity as a red flag. Rate shopping is an exception. 

What is the impact of hard inquiries on your credit score? 

A single hard inquiry can lower your FICO score by up to 5 points. But with the most popular FICO model, all inquiries within 45 days are counted as one inquiry when you are rate shopping. Such as for a mortgage, student loan, or car loan.  

VantageScore also groups rate-shopping inquiries together, but they do so over a 14-day period. According to VantageScore, a hard inquiry can lower your credit score by up to 10 points. 

Most lenders or card issuers will only get your credit report from one of the three big credit bureaus, Equifax, Experian, or TransUnion. So only one of your credit reports will show the request. With a mortgage, however, all three credit bureaus are generally checked. 

It is smart to keep hard inquiries to a minimum. Before you ask for credit, find out as much as possible about your approval chances. This way, you won’t lose credit score points and still get the credit you want.  

Don’t ask for credit on the spur of the moment. Consider whether the deal or bonus you want is worth the possible drop in your credit score. A few extra points might not be a big deal if your credit is good. But you should think twice if your credit score is on the edge. 

How long does a hard inquiry stay on your credit report? 

Your credit report will show a hard inquiry for two years. Lenders can see your history, but they only affect your credit score directly for up to a year.

How to dispute hard credit inquiries 

The way is to stay up to date with your credit report. If you find mistakes, like a hard inquiry that was carried out without your permission, you might want to talk to the credit bureau about it. You can also ask for help from the CFPB. 

Also Read: Does Checking Credit Score Lower it?

How to avoid the negative effects of hard credit checks 

FICO gives you a grace time of 30 days before mortgage or auto loan inquiries show up on your FICO credit scores. And FICO may count multiple inquiries for the same type of loan as a single inquiry as long as they are made within a certain time frame. Most of the time, it has a 14 days window. 

Some lenders use scoring models that give you more time to shop without an extra hard inquiry. But you may want to stick to 14 days if you want to compare loans because you probably won’t know which scoring model a lender uses to figure out your score. 

What is a soft inquiry? 

Soft inquiries (also called “soft pulls” or “soft credit checks”) usually happen as part of a background check, and it doesn’t need your approval. Soft inquiries won’t hurt your credit scores like hard inquiries will. Depending on your credit company, they may or may not be on your credit report. Since soft inquiries aren’t tied to a specific credit application, you can only see them when you look at your credit reports. 

Hard credit inquiry vs. soft inquiry 

This is called a credit pull when someone checks your credit, even if it’s you. When you publicly ask for credit, lenders do a hard pull, which can cause your credit score to drop a little. Soft checks, on the other hand, don’t affect your credit score and are used for preapprovals or when you check your own credit. 


Soft credit pulls 

Hard credit pulls 

Used by creditors to make preapproved loan offers.  Used by creditors when you apply for credit. 
Records visible only to you  Records stay on your record for two years. 
Your approval is not necessary  Written approval is mandatory 
Your credit score won’t be affected  FICO score can take a hit of up to five points 
Examples: “Prequalified” credit card offers and insurance quotes, Employment verification, i.e., background check, etc  Examples: Mortgage applications, Auto loan applications, Credit card applications, Student loan applications, Personal loan applications, Apartment rental applications, etc 

Bottom line  

Hard inquiries are part of your credit report, but you should only do them cautiously. Check your credit score often to keep track of how previous hard inquiries are affecting your credit. Many banks and lenders let people check their credit scores for free. If you don’t recognize any of the inquiries, you can dispute them with each of the credit agencies. Know that if you have a better credit score, it’s always going to vouch for your reliability.


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Why does a hard credit pull matter? 

Lenders can judge how creditworthy you are based on the number of hard credit pulls on your report. If you have a lot of hard pulls on your report, it could mean that you have a lot of debt or are about to get a lot of debt. So, creditors may think you have (or will have) a high DTI ratio and that you could be a credit risk. 

What does a soft credit pull show? 

A soft credit pull can reveal details about credit accounts, late payments, collection actions, and hard credit inquiries. Only you have access to the soft credit queries that have been made on your credit report. 

How many points does a hard credit inquiry cost you? 

A hard credit inquiry might lower your score by up to five points on the FICO score model. Given that the FICO scale extends from 300 to 850, this is often not a major drop. Hard credit pulls might last up to two years on your credit record. 

Do hard inquiries go away? 

After two years, hard inquiries are removed from your credit reports. However, your credit scores may only be affected for a year, and in other cases, only for a few months. Soft inquiries are only reported to credit bureaus for 12-24 months. Also, keep in mind that soft inquiries do not affect your credit scores. 

Is it bad to have a hard inquiry on your credit? 

At the very least, hard inquiries can hurt your credit score in the short run. A hard inquiry will stay on your credit report for two years, but it will generally only hurt your score for up to a year and by less than five points. 

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