Hard Credit Inquiry

A request by a lender to a credit bureau to look at your full credit report that will impact your credit score.

What is a Hard Credit Inquiry?

A hard credit inquiry, also called a “hard credit check” or “hard pull,” is a type of credit information request that generally occurs when a lender or company reviews your full credit report during the loan or credit card application process and may cause a temporary decrease in your credit score. Hard credit inquiries are used by lenders and credit card issuers to help determine how much risk you present as a potential borrower, and whether to extend you a loan or line of credit.

What Happens When a Hard Credit Inquiry Is Made?

Generally, when you apply for a new loan or credit line, the lender or card issuer requests a copy of your credit report from one or more of the three credit bureaus: Equifax, Experian, and TransUnion. Hard credit inquiries will impact your credit score because most credit bureau scoring models account for how recently and how frequently you apply for credit. The impact to your credit score is usually short-lived.

During the inquiry, a lender or card issuer reviews how you’ve handled your finances—past and present. Your payment history and account balances along with other factors are taken into consideration to help the lender determine whether you’re a reasonable credit risk and likely to repay the money you borrow.

Why Are Hard Credit Inquiries Important?

Financial institutions issuing credit-based loans and lines of credit use hard inquiries so they can look at your full credit report to help decide if you’re a responsible borrower who may be able to manage an additional monthly payment. If you have a track record of on-time payments and demonstrate good credit utilization, lenders may be more inclined to approve your request for additional credit. Your positive credit history can also result in lower interest rates.

However, a spotty credit history with late payments may indicate you have trouble meeting your financial obligations. In this case, lenders may not feel you have the capacity to take on more debt and may decline your application, or they may approve your application and charge you a higher interest rate.

What Can Trigger a Hard Inquiry?

When you want to borrow money, a few different actions may trigger a hard credit inquiry, including:

• Applying for a new loan (e.g., personal, auto, mortgage)

• Applying for a new line of credit

• Requesting a credit limit increase

Other situations may also trigger a hard pull:

• Renting a home or apartment

• Applying for a job

It’s important to know that lenders and individuals are not allowed to perform a hard credit pull without your permission.

How Long Does a Hard Credit Check Stay on Your Credit Report?

The effect of a hard credit check varies. A single hard pull may remain on your credit reports for two years, but it probably won’t impact your credit score for that long. While hard pulls can temporarily decrease your credit score by a few points, they generally won’t have much if any effect on your credit score after about one year. However, multiple inquiries may have a more significant impact as it may signal financial distress.

How Many Hard Inquiries Are Considered Too Many?

There’s no set number of hard inquiries that are considered excessive. For example, if a lender sees one or two in a short period, they may not be concerned. But if you have several hard inquiries during a short time the lender may consider you a higher-risk borrower since it could look like you’re trying to take out more credit than you could responsibly repay.

Does Shopping for a Loan Result in Multiple Hard Credit Inquiries?

The degree to which multiple hard pulls will negatively impact your credit score varies depending upon a number of different factors.

For example, hard inquiries from two or more lenders may be viewed as a single inquiry if you're shopping for a mortgage, auto loan, or student loan. That’s because it’s common for borrowers to rate-shop: comparing loans and rates from different lenders. However, for multiple hard inquiries to count as one they must be made within a specific timeframe. Generally, the timeframe for FICO Scores is 30 days and 14 days for VantageScores.

Keep in mind that if you’re applying for multiple credit cards in a short timeframe, most lenders won’t typically consider those hard inquiries as one.

How Much Do Hard Credit Checks Impact Your Score?

One hard credit check can cause your credit score to decrease by a few points. If you’re considering applying for several loans or credit cards in a relatively short time frame, it’s important to consider the potential impact to your credit score.

What’s the Difference Between a Hard and Soft Credit Check?

While a hard inquiry can decrease your score by a few points, soft inquiries do not impact your score. Before applying for credit, it’s important to know which inquiry a lender will use.

Generally, employers and landlords use soft credit checks when you start a new job or submit a rental application, however, some may ask you for a hard pull. In lending, soft inquiries are typically used during a prequalification process.

For example, if you apply for a personal loan pre-approval, your lender may do a soft credit check to help determine the interest rate they can offer. If you decide to use the lender, they’ll then perform a hard inquiry to look at your full credit profile before decided whether to approve your loan.