What's a Hard Credit Inquiry & How Does it Affect Your Credit Score?

By Chika


Last Updated: October 15, 2022



There are numerous reasons why an inquiry can be made into your credit history.

Lenders and landlords run checks on your credit history when you apply for:

  • a new credit card
  • get a mortgage
  • rent an apartment

This is done as due diligence and to gauge to see if you're likely to be a financial risk. 

  • However, did you know that specific forms of hard credit inquiries will lower your credit score?
  • Or that credit inquiries account for 10% of your FICO score?

Let's find out how below.



What is a Hard Credit Inquiry?

Also known as a “hard pull,” a hard credit inquiry occurs when a lender checks your credit report.

This usually happens when you request a new loan or reservice an old debt. If you apply for a credit card, for example, the card issuer will pull your credit file and you’ll see a hard inquiry on your credit reports.

Permit a lender to perform a hard pull on your credit, so these inquiries shouldn’t take you by surprise. Lenders require a credit inquiry.

It's one of the ways they can evaluate:

  • your creditworthiness
  • your ability to meet your debt commitments



What's the Difference Between a Hard Credit Inquiry and a Soft Credit Inquiry?

Hard inquiries might lower your credit score since they happen when a lender reviews your report as a result of an application for goods or services.

Soft inquiries, on the other hand, are typically started by third parties, such as businesses making promotional credit offers or your lender conducting routine assessments of your open credit accounts.

Additionally, soft inquiries happen whenever you check your credit report. Your credit score is not affected by these inquiries.



How Can a Hard Credit Inquiry Affect Your Credit Score?

A hard inquiry from a lender, according to FICO, will lower your credit score by five points or less.

Your scores can decline even less if you have a solid credit history and no other credit problems. The decline is momentary. If everything else in your credit history stays good, your scores will increase once more, typically within a few months.

Another point worth noting is that hard credit inquiries can remain on your credit report for up to two years.

However, when your credit score is being calculated, FICO only considers credit inquiries made in the past year. This suggests that if your credit inquiry is over a year old, it will no longer affect your credit score.



How Do Multiple Credit Inquiries Affect Your Score?

Multiple credit inquiries can hurt your credit score, but this depends on what kind of credit you’re shopping for.

The major credit bureaus and FICO are aware that you may have many credit queries on your account if you are rate shopping to obtain the cheapest interest rate on something like a mortgage or an auto loan.

Because of this, if several requests for the same kind of credit occur within a certain period, they are treated as a single inquiry. While more recent FICO scoring models enable customers 45 days to shop around for the lowest rates and terms, older FICO scoring models aggregate queries made within two weeks.

However, if you apply for several credit cards quickly, each application will result in a fresh hard credit inquiry for your credit report.

If you have credit that falls between good and great, this could significantly affect your interest rates. This is one of the reasons it's a good idea to wait at least 90 days between credit card applications.


Is a credit limit increase a hard inquiry too?


It depends on the lender and how they handle requests in accordance with their policies. Some lenders can interpret it as a request for new credit or more credit and demand access to a new credit report, which will seem like a hard inquiry. 

Others might grant the request without checking your credit report or by performing an "account review," which will show up as a soft inquiry on your report. Prior to requesting a larger credit limit, it is best to inquire with your lender if you have any concerns.


How to minimize the impact of hard credit inquiries

Avoid applying for a lot of new credit at once, as we discussed above, to lessen the impact of harsh credit inquiries.

Try to compress the time you spend looking for credit when you're getting ready to take out a vehicle loan or a mortgage. This kind of rate comparison is frequently recorded by credit agencies as a single credit inquiry. This will have less of an effect on your credit score.



The Bottom Line

Knowing how credit inquiries affect your credit score, can allow you to confidently choose when to apply for new credit. You're allowed to check your credit score as often as you desire because doing so has no negative effects to it.

Expect a hard inquiry into your credit if you want to take on a significant financial commitment like a new credit card, mortgage, or apartment rental. How much of your credit score is impacted by a hard inquiry? It will frequently only lower your score by a few points, while a soft credit inquiry will have no impact at all.

Photo by RODNAE Productions


One comment on “What's a Hard Credit Inquiry & How Does it Affect Your Credit Score?”

  1. Lowering your credit score just to obtain a home or rental or even a car, which by the way is all necessities and part of your four basic living essentials. This game is absolutely stupid and such a power play. What a racket.

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