hard inquiry

What Is A Hard Inquiry On Your Credit Report

Hard Inquiry

Understanding what a hard inquiry is, how it affects your credit score, and how to manage it is crucial for maintaining a healthy credit profile. Let us explain what hard inquiries are and list some of the most common types, and offer some guidance on how to handle them effectively.

What is a Hard Inquiry?

A hard inquiry, also known as a hard pull, occurs when a financial institution, such as a lender or credit card issuer, checks your credit report as part of the decision-making process for lending you money or extending credit. This type of inquiry requires your authorization, meaning it happens when you apply for credit or services that involve a credit check. Hard inquiries are recorded on your credit report and can impact your credit score because they indicate that you are seeking new credit.

When you apply for a credit card, mortgage, auto loan, or any other type of credit, the lender wants to assess your creditworthiness. They do this by pulling your credit report from one or more of the major credit bureaus—Experian, Equifax, and TransUnion. The information they obtain helps them decide whether to approve your application and what terms to offer you.

How Does a Hard Inquiry Affect Your Credit Score?

Hard inquiries can affect your credit score, but the impact is usually small and temporary. On average, a hard inquiry can lower your credit score by a few points, typically between 5 and 10 points. However, the actual impact depends on your overall credit profile and the number of recent inquiries.

Credit scoring models, such as FICO and VantageScore, consider hard inquiries because they indicate that you may be seeking new credit. If you have several hard inquiries within a short period, it can signal to lenders that you might be a higher risk borrower. This is because multiple applications for credit might suggest financial instability or an increased likelihood of overextending yourself.

The impact of a hard inquiry diminishes over time. In most cases, hard inquiries remain on your credit report for two years but only affect your credit score for the first year. As time passes, the effect of the inquiry lessens, and your score can recover, provided you maintain good credit habits.

Popular Types of Hard Inquiries

Several common situations result in hard inquiries. Understanding these can help you manage your credit applications more effectively. Here is a list of some of the most popular types of hard inquiries:

Credit Card Applications

When you apply for a new credit card, the issuer will perform a hard inquiry to assess your creditworthiness.

Auto Loan Applications

Applying for an auto loan involves a hard inquiry as the lender needs to evaluate your ability to repay the loan.

Mortgage Applications

Mortgage lenders conduct hard inquiries to determine your eligibility for a home loan and the interest rate you qualify for.

Personal Loan Applications

When you apply for a personal loan, the lender will check your credit report with a hard inquiry.

Student Loan Applications

Private student loan applications often require a hard inquiry to assess your credit history and determine loan terms.

Apartment Rental Applications

Some landlords or property management companies perform hard inquiries when you apply to rent an apartment to evaluate your credit history.

Utilities and Service Applications

When you set up new utility services, such as electricity, gas, or cable, the service provider may conduct a hard inquiry to determine your creditworthiness.

Cell Phone Contracts

Applying for a cell phone contract with a major carrier may result in a hard inquiry as the provider assesses your credit risk.

Store Credit Card Applications

Applying for a credit card from a retail store typically involves a hard inquiry to evaluate your credit profile.

Managing Hard Inquiries

While hard inquiries are a normal part of applying for credit, managing them effectively can help minimize their impact on your credit score. Here are some strategies to consider:

Limit Applications for New Credit

One of the best ways to manage hard inquiries is to limit the number of applications for new credit. Only apply for credit when you genuinely need it and when you are confident you meet the lender’s requirements. Research the credit products you are interested in and check if you pre-qualify without a hard inquiry. Pre-qualification processes typically involve a soft inquiry, which does not affect your credit score.

Group Applications Within a Short Timeframe

Credit scoring models often treat multiple inquiries for the same type of credit as a single inquiry if they occur within a short timeframe. This practice is known as “rate shopping,” and it allows consumers to shop around for the best loan terms without being penalized for each inquiry. For example, if you are applying for a mortgage or auto loan, try to submit all your applications within a 14- to 45-day period, depending on the scoring model. This way, the inquiries will be grouped together and have less impact on your credit score.

Monitor Your Credit Report

Regularly monitoring your credit report can help you stay informed about the inquiries that appear on your report and ensure they are accurate. You are entitled to one free credit report from each of the three major credit bureaus every 12 months through AnnualCreditReport.com. Reviewing your credit report can help you identify any unauthorized hard inquiries, which could be a sign of identity theft. If you find any discrepancies, you can dispute them with the credit bureaus to have them removed.

Build and Maintain Good Credit Habits

Maintaining good credit habits can help offset the impact of hard inquiries and improve your overall credit score. Here are some tips:

Make Timely Payments

Always pay your bills on time, as payment history is the most significant factor in your credit score.

Keep Credit Utilization Low

Aim to keep your credit utilization ratio below 30% by managing your credit card balances responsibly.

Maintain a Mix of Credit Accounts

Having a diverse mix of credit accounts, such as credit cards, installment loans, and mortgages, can positively impact your credit score.

Avoid Closing Old Accounts

Keeping older credit accounts open can help maintain the length of your credit history, which is a factor in your credit score.

Review Your Credit Reports Regularly

Regularly checking your credit reports can help you stay on top of your credit health and catch any issues early.

Be Strategic About Credit Applications

When you need to apply for new credit, be strategic about it. Prioritize applications for the credit products that are most important to you, and avoid applying for multiple credit products simultaneously. For example, if you are planning to buy a car and apply for a new credit card, consider completing the car purchase first before applying for the credit card.

What to Do If You Have Too Many Hard Inquiries

If you find that you have too many hard inquiries on your credit report, there are steps you can take to mitigate their impact:

Wait for Inquiries to Age

Over time, the impact of hard inquiries on your credit score will diminish. Continue to practice good credit habits, and your score should improve as the inquiries age.

Dispute Unauthorized Inquiries

If you notice any unauthorized or fraudulent hard inquiries on your credit report, contact the credit bureaus to dispute them. Provide any necessary documentation to support your claim and have the inquiries removed.

Focus on Positive Credit Behavior

Continue to make timely payments, keep your credit utilization low, and manage your credit accounts responsibly. Positive credit behavior can help counteract the impact of hard inquiries and improve your credit score.

Consider Credit Counseling

If you are struggling to manage your credit or improve your credit score, consider seeking help from a credit counseling agency. Credit counselors can provide personalized advice and help you develop a plan to improve your credit.


Understanding what a hard inquiry is and how it affects your credit score is essential for managing your credit health. While hard inquiries are a normal part of applying for credit, it is important to be strategic about when and how you apply to minimize their impact on your credit score. By limiting unnecessary applications, grouping inquiries for the same type of credit, monitoring your credit report, and maintaining good credit habits, you can effectively manage hard inquiries and work towards a healthier credit profile. Remember that while hard inquiries can affect your credit score, they are just one of many factors, and maintaining overall good credit behavior is key to achieving and maintaining a strong credit score.

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