If you’re getting ready to take out a loan or a new line of credit, be aware that your lender will probably run a hard inquiry, which includes access to your credit report.
In this article, we will discuss:
- What a hard inquiry is
- Hard inquiries vs. soft inquiries
- How long a hard inquiry stays on your credit report
- How hard inquiries affect your credit
- If you can remove hard inquiries
What is a hard inquiry?
A hard inquiry (also known as a “hard pull” or a “hit to your credit”) is essentially a credit check. Typically, a lender or creditor will request to look at your credit report to help them determine your level of risk, your annual percentage rates (APRs), amount of credit to approve you for and more. For an entity to run a hard inquiry, they need your permission. That's why it's important to carefully review applications for loans, credit cards and leases for apartments and homes.
For example, let’s say you’re going to take out a personal loan to help pay for an engagement ring. Your lender/creditor will likely need to run a hard inquiry to determine if you qualify for the loan and also decide the interest rates and terms associated with that loan.
Hard inquiry vs. soft inquiry
There are two types of inquiries when it comes to your credit report—hard inquiries and soft inquiries. Let’s go into more detail.
- A hard inquiry is a “hard pull” or credit check that a lender runs to help determine your eligibility for loans, lines of credit and more. These inquiries can appear on your credit report and have an impact on your credit score.
- A soft inquiry (or a “soft pull”), on the other hand, occurs when you or another party (such as a potential employer, or lender or issuer) is given authorization to access and review your credit report. A soft inquiry is done if you’re interested in reviewing your own credit or if you’re applying for certain types of preapprovals. Soft inquiries do not impact your credit score even though they also appear on your credit report, like hard inquiries.
A helpful way to remember the difference is that "hard" inquires do have an impact on your credit score while "soft" ones do not. What's more, hard inquiries are only run when you apply for a loan or line of credit. If you’re curious about how your credit score may be impacted by factors like hard inquiries, you can track it regularly when you enroll in Chase Credit Journey®, a free online tool that provides you with your Experian™ credit report and free credit score, best of all you don't have to be a Chase customer to sign up.
How long does a hard inquiry stay on your report?
A hard inquiry generally lasts on your credit report for up to two years. However, their effect on your credit score doesn’t necessarily last this long (typically only for about a year).
How do hard inquiries affect your credit score?
A hard inquiry may only have a minor impact to your credit score. The exact number of points is heavily dependent on your current score. Generally, the higher your credit score, the more of an impact a hard inquiry can have. Regardless, your score probably won’t drop by more than a few points.
Additionally, you can see your score go up over time as you continue to make healthy financial choices. For example, having a new credit card increases your credit limit, which may help to give you a better credit utilization ratio.
Can you remove hard inquiries from credit report?
Generally speaking, there is no way to remove a fully authorized hard inquiry from your credit report. However, if there's been an error (for example, you never authorized the hard inquiry), you can file a dispute in order to remove it. To do this, you’ll want to contact the relevant credit bureau and provide appropriate documentation. You can check out the step-by-step dispute guide available through Credit Journey® to help you through this process. Note that this is rare and can take time for the inquiry to be removed.
A hard inquiry occurs when a lender does their own necessary due diligence on you as a borrower to determine risk. That’s why it’s important to be in a healthy place with both your credit and credit score when your lender runs a hard inquiry. This means paying your loans and credit card balances on time and monitoring your score regularly, as well as sing services like Credit Journey®, can help you to maintain proper visibility into your account.