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What Is a Hard Inquiry?

What Is a Hard Inquiry?
Jason Steele
Updated December 13, 2021
4 Min Read

When you’re trying to improve your credit score, you first need to understand how it works. After your payment history and amounts owed, one of the key factors in your credit score is the number of so-called hard inquiries. A hard inquiry is a request to review your credit for the purpose of granting a loan. Hard inquiries are important as the credit scoring formulas are designed to lower your score when consumers apply for multiple new loans within a short period of time. 

Soft vs hard credit check

Part of the confusion about credit inquiries relates to the difference between so-called soft inquiries and hard inquiries. A soft inquiry is one that doesn’t relate to a specific application for a loan or a credit card. A soft inquiry has no effect on your credit score. An example of a soft inquiry is a credit check performed in bulk by a lender in order to offer consumers pre-approval. A soft inquiry can also happen when a potential employer performs a pre-employment background check. Credit checks for utilities and insurance are soft inquiries, since it doesn’t involve a loan. And when a consumer checks his or her own credit, it’s only a soft inquiry. 

In contrast, a hard inquiry results when a consumer applies for a new loan or line of credit. Unlike a soft inquiry, a hard inquiry can only be done after a consumer applies for a loan and agrees to a credit check. Hard inquiries will appear on your credit histories and can affect your credit, unlike soft inquiries. 

When do hard credit inquiries occur?

Hard inquiries can occur whenever a consumer applies for a loan or a line of credit. Examples include applications for credit cards, home loans, car loans and home equity lines of credit. 

Does a hard inquiry affect your credit score?

A hard inquiry can affect your credit score. Having just a single, recent hard inquiry is unlikely to have a significant impact on your credit score. However, if you have multiple hard inquiries within a few months, then it’s likely that your credit score will decline as a result. 

That’s because the credit scoring formulas interpret multiple new requests for credit as a sign of potential financial distress. Or to put it in human terms, how would you feel about loaning money to a friend if you hear that he or she has also been asking everyone you know for a loan as well? That’s the logic behind having multiple hard inquiries reducing your credit score. 

Thankfully, requests for new credit only make up 10% of your FICO credit score. In contrast, your payment history makes up 35% of your score, while your amounts owed makes up 30%. For most people, paying your bills on-time and carrying little, if any debt will ensure that you have excellent credit, even if you occasionally need to apply for multiple new accounts within a few months. Also, the longer it’s been since you’ve had a hard inquiry, the less it will affect your credit score. So if your credit score declines slightly only because you’ve had several hard inquiries, it will likely rebound within a few months. 

How many points does a hard inquiry affect credit score?

Thankfully, requests for new credit only make up 10% of your FICO credit score. In contrast, your payment history makes up 35% of your score, while your amounts owed makes up 30%. FICO has also published that a hard inquiry will reduce your credit score by five points or less. 

For most people, paying your bills on-time and carrying little, if any debt will ensure that you have excellent credit, even if you occasionally need to apply for multiple new accounts within a few months. Also, the longer it’s been since you’ve had a hard inquiry, the less it will affect your credit score. So if your credit score declines slightly only because you’ve had several hard inquiries, it will likely rebound within a few months. 

How Long Does a Hard Inquiry Last?

A hard inquiry will stay on your credit report for two years, but it won’t even affect your credit score after 24 months. In fact, a single hard inquiry may not affect your score at all.

Can you avoid hard credit inquiries?

Obviously, you can avoid hard inquiries by not applying for new credit. But if you do need to apply for a new loan or line of credit, you can minimize the effect of hard inquiries on your credit. The leading credit scoring formulas count multiple requests for a new loan as one, so long as they are made in a short period of time, under the assumption that consumers are shopping for the lowest rate for a single loan, rather than wishing to take out multiple loans. The latest versions of FICO scores give consumers a 45-day window for these inquiries to be counted as one. VantageScores, another leading provider of credit scores, treats inquiries made within 14 days as a single application for new credit. 

Is a hard credit check bad?

No, it’s simply the result of a new application for credit. Everyone who has ever applied for a loan or a credit card has had a hard inquiry on their credit report. It’s nothing to be ashamed or afraid of. 

Bottom line

A hard inquiry is the result of an application for new credit, and is unlikely to significantly hurt your credit score. By avoiding having numerous hard inquiries on your credit report within a few months, you can focus on paying your bills on time and carrying very little, if any, debt. That way, you can be sure that your credit score will be as high as possible.

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