What Is a Hard Inquiry on Your Credit Report?
A hard inquiry happens when a lender reviews your credit report as part of a credit application. If you’re applying for a credit card, auto loan, mortgage, or another type of financing, a hard inquiry may appear on your credit report.
Understanding how hard inquiries work can help you make more informed decisions before applying for credit.
Quick answer: A hard inquiry is a credit report check typically associated with applying for a loan or credit card. It may temporarily lower your credit score by a few points, although the effect varies. Hard inquiries can remain on your credit report for two years, but FICO scores generally consider them for only 12 months.
What Causes a Hard Inquiry?
A hard inquiry commonly occurs when you apply for a new credit account and the lender checks your credit history to evaluate your application.
Examples include applying for a credit card, personal loan, auto loan, or mortgage.
Simply checking your own credit report does not cause a hard inquiry.
Does a Hard Inquiry Lower Your Credit Score?
A hard inquiry can lower your credit score, but the effect is generally small.
According to FICO, one additional credit inquiry typically reduces a person’s FICO score by fewer than five points, although the impact depends on their overall credit profile.
Applying for several credit cards within a short period may have a greater effect than applying for one card.
Understanding how credit utilization affects your credit score is another important part of managing your credit.
How Long Does a Hard Inquiry Stay on Your Credit Report?
Hard inquiries generally remain on your credit report for two years.
However, FICO scores generally consider inquiries from only the previous 12 months.
As time passes, the scoring impact of an inquiry typically decreases.
What Is the Difference Between a Hard Inquiry and a Soft Inquiry?
A hard inquiry generally occurs when you apply for credit and a lender checks your report.
A soft inquiry can occur when you check your own credit, when a company reviews your credit for a promotional offer, or during certain other credit checks.
Soft inquiries do not affect your credit score.
Do Multiple Credit Inquiries Count as One?
Sometimes, but it depends on the type of credit you’re shopping for and the scoring model.
Many credit scoring models provide special treatment for multiple mortgage, auto loan, or student loan inquiries within a defined shopping window.
Credit card applications generally do not receive this same rate-shopping treatment. Each application may generate a separate hard inquiry.
Can You Avoid a Hard Inquiry When Applying for a Credit Card?
Not always.
Some credit card companies offer prequalification tools that use a soft inquiry to estimate whether you may qualify.
However, submitting a full application can still result in a hard inquiry, even if you were prequalified.
Prequalification also does not guarantee approval.
Should You Worry About Hard Inquiries?
An occasional hard inquiry is a normal part of applying for credit.
Rather than avoiding every inquiry, focus on applying for credit when it makes financial sense and avoiding unnecessary applications.
Your payment history, amounts owed, and other factors generally have a greater influence on your credit score.
The Bottom Line
A hard inquiry is a routine part of many credit applications. Although it may temporarily affect your credit score, a single inquiry generally has a relatively small impact.
Understanding the difference between hard and soft inquiries can help you apply for credit more confidently.