Let’s talk about hard credit inquiries
Picture this: your credit score dropped and you don’t know why. It could have been a late payment, carrying a high balance on your cards or fraud on your account. But there’s another possibility – a hard credit inquiry.
Let’s take a look at hard inquiries, what triggers them, how long they last on your credit report and how to manage them. We’re going to mention ‘credit report’ quite a few times, so here's a refresher on what's in your credit report.
What’s a hard credit inquiry?
There are two types of inquiries you’ll see on your credit report: soft inquiries and hard inquiries. Soft inquiries or “soft hits” happen when you check your own credit score or see if you’ll get pre-qualified or pre-approved for a credit card. These types of inquiries don’t affect your credit score.
A hard inquiry or a “hard pull” happens when a potential lender requests your credit history. These inquiries do affect your score, but the impact can vary based on your individual credit report and financial circumstances. In most cases, it will result in a small, temporary dip in your score.
What triggers a hard credit inquiry?
As we mentioned above, hard inquiries happen when a potential lender requests your credit history to see if you qualify for a loan. Here are common reasons you might receive a hard inquiry:
-
Getting a new phone plan
-
Applying for a loan or mortgage
Hard inquiries aren’t all created equal. Although some won’t have a big impact on your credit score, there are situations that you should stay away from if you’re trying to keep your score stable. For example, it might be tempting to apply for multiple credit cards at once for various reasons, from financial need to irresistible offers, but each application will result in a hard inquiry and lower your score. Instead, you can use our Quick Check tool to find out if you’ll be pre-approved with no impact to your credit score.
Now you might be wondering what happens if you need to shop around for a loan to make sure you’re getting the best interest rate, such as an auto loan or home mortgage loan. Typically, these hard inquiries are grouped together for a period of time (usually 14 - 45 days) and only result in a single inquiry on your credit report.
How long will a hard inquiry stay on your credit report?
Long story short, a hard inquiry will likely stay on your credit report for up to two years, but some may affect your score for one year.
You have a hard credit inquiry – now what?
It’s important to remember that your credit score is simply a number that lenders use to determine whether or not you qualify for a loan. This number will fluctuate depending on your financial situation, but there are ways to stay on top of your score.
Know what’s in your credit report
Not only are you allowed to see what’s in your credit report, we encourage you to. You can get a copy of your credit report from the major reporting agencies, TransUnion® or Equifax®. You should be the first to know if there are suspicious activities impacting your score, such as fraudsters taking out loans in your name.
Keep track of your credit score
“Out of sight, out of mind” is rarely a good practice, but it’s especially harmful when it comes to your credit score. You can check your score for free with no impact to your credit score using our free credit tracking tool, Credit Keeper®**.
Take steps to increase your score
Increasing your score won’t happen overnight. From applying for credit sparingly to making the most of financial apps, here are a few other ways you can work towards increasing your score.
At the end of the day, hard inquiries happen to most people at some point. If your score went down as a result of one, don’t worry – it won’t last forever. Be proactive by spacing out credit applications, only applying for loans you truly need and always using credit responsibly to help minimize the impact to your credit score.