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What is a hard credit inquiry?

Dave B
  • Credit
  • 3 minute read

It’s common advice to limit the number of credit inquiries to help protect your credit score. And while this is true, all credit inquiries are not created equal. Credit bureaus are not concerned with some inquiries, while other inquiries can cause your score to decrease. It is important to understand the different types of inquiries so that you can effectively manage your credit score.

Hard inquiry vs. soft inquiry

“Credit inquiries are either ‘hard inquiries,’ as when a business views your credit report in connection with an application for credit, or ‘soft inquiries’ when your credit is checked for most other reasons,” according to the TransUnion webpage, one of the three major credit bureaus. Soft inquiries include when you check your own credit score, when companies check credit for pre-approval offers, pre-employment credit checks, insurance inquiries and inquiries from current creditors.


It is a smart idea to apply to several banks when taking out a large loan, since FICO gives you a grace period for inquiries when you are applying for loans for a house, car or college. Another exception is when you are applying to rent a home or apartment. All inquiries made during this time will only count as a single hard inquiry. Other inquiries will only stay on your credit reportfor 12 months.

How hard inquiries affect your credit score

Many people question why hard inquiries affect your credit score. Hard inquiries can send up a signal that you are shopping around because you are unable to find credit. FICO says that people with six or more inquiries have an increased risk of declaring bankruptcy. The impact that a hard inquiry has on your credit score is dependent on your credit history. According to the MyFico.com website, “For many people, one additional credit inquiry (voluntary and initiated by an application for credit) may not affect their FICO score at all. For others, one additional inquiry would take less than five points off their FICO score.” The best advice to follow is to limit the number of hard inquiries and to make sure that when you are shopping around for a mortgage or a loan, all credit checks fall into the grace period to minimize the number of inquiries.

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