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In a nutshell
When you apply for financing — be it a credit card or a loan — a hard credit inquiry allows a lender to determine your eligibility.
- Hard inquiries can temporarily lower your credit score.
- While hard inquiries stay on your credit report for two years, their impact will lessen as time goes on.
- To reduce the negative effect of hard inquiries, pay your bills on time, dispute inaccuracies and don’t apply for too many new credit accounts at once.
How a hard credit inquiry works
Also known as a “hard pull,” a hard credit inquiry occurs after you formally apply for a financial product, such as a mortgage or personal loan.
When applying for credit, you give the prospective lender or company permission to check your credit so they can assess your creditworthiness. They’ll then use your credit information to gauge how risky a borrower you may be and decide whether to extend you an offer. Your credit score also affects your interest rate offers and terms. Hard inquiries are typically required for loan and credit card applications, requests for credit limit increases, new utility applications and apartment rental applications.
How a hard inquiry affects your credit score
According to FICO, one hard credit pull can temporarily lower your FICO score by less than five points.
However, having multiple hard inquiries on your credit report within a short period of time can hurt your score and make it harder to secure financing. That’s because lenders and other companies may believe you’re short on cash and looking for credit you can’t afford to repay. As a result, they might be hesitant to offer you financing. Ideally, you should spread out your credit applications as much as possible.
How long a hard inquiry stays on your credit report
You can expect a hard inquiry to stay on your credit report for two years. While lenders and other companies will be able to see all hard pulls made during this two-year period, these inquiries will only impact your credit score for a year at most. That’s why drops in your credit score due to hard credit inquiries are usually temporary and will diminish over time, especially if you demonstrate responsible credit habits.
How to minimize the impact of hard credit inquiries
While hard inquiries may take a small toll on your credit score in the short term, they’re often necessary when you apply for financing. The good news is there are some strategies to help reduce their negative impact.
- Make timely payments: Pay your bills on time, every time. This keeps your credit score in good shape and reduces the effect of hard pulls.
- Space out your credit applications: Don’t apply for multiple financial products within a short period of time. Experts suggest limiting new credit applications to every six months or so.
- Be mindful of your credit applications: It may be tempting to apply for a new loan or credit card every time you have a large expense. But this can hurt your credit score and raise red flags to lenders, so apply for new credit only when you really need it.
- Take advantage of rate-shopping windows: As long as they occur within a 45-day window, FICO treats multiple mortgage, auto and student loan inquiries as one hard credit inquiry. VantageScore considers all inquiries made within 14 days as a single inquiry, regardless of loan type. Keep these rate-shopping periods in mind when you apply for new loans to protect your credit score.
How to check for hard credit inquiries on your credit report
It’s a good idea to review your credit reports on a regular basis. Visit the Annual Credit Report website to pull free copies for your reports from the three major credit bureaus — Equifax, Experian and TransUnion — every 12 months. Check each report carefully and look for any inaccurate hard pulls. If you find one you believe is an error, dispute it with the appropriate bureau.
Learn more:
What is the difference between a hard credit inquiry and a soft inquiry?
A hard inquiry is a formal credit pull that requires your permission whereas a soft inquiry occurs when you or someone else checks your credit with or without your permission. While a hard inquiry can lower your credit score, a soft inquiry has no effect on it.
Soft inquiries are common with preapprovals for credit offers, personal credit checks and employment applications. Unlike with hard pulls, which everyone can see when they look at your credit report, soft credit inquiries are visible only to you.
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Hard credit inquiries are usually necessary when you apply for new credit. While you shouldn’t worry about them too much, it’s important to understand what they are and to keep an eye on how they affect your credit score. If you notice your score has gone down because of a hard inquiry (or several), focus on responsible credit use to help boost your score again.
Frequently asked questions (FAQs)
How many points does a hard inquiry affect your credit score?
FICO states that a hard inquiry will usually lower your credit score by less than five points, and the impact will diminish over time.
How long do hard inquiries stay on your credit report?
Hard inquiries remain on your credit report for two years. However, once a hard inquiry has been there for longer than a year, it will no longer affect your score.
Can hard inquiries be removed from my credit report?
You may be able to remove hard inquiries from your credit report if they’re inaccurate. If you didn’t apply for a new credit account or never authorized a particular credit inquiry but it appears on your report, you can dispute it. Otherwise, hard inquiries stay on your report for two years.
Do hard inquiries impact your credit score equally?
All hard inquiries will affect your credit score equally, but if your credit report has too many hard inquiries within a short time frame your credit score may suffer more than if there’s only one hard inquiry. That’s why it’s important to be mindful of when and how often you apply for new credit.
AP Buyline’s content is created independently of The Associated Press newsroom. Our evaluations and opinions are not influenced by our advertising relationships, but we might earn commissions from our partners’ links in this content. Learn more about our policies and terms here.