What Is A Hard Inquiry?

Whenever you do anything with your credit some sort of record is formed. One of these records is called a hard inquiry.

A hard inquiry is a formal request by a bank, creditor or other person or institution to review your credit report. Hard inquiries show that you are actively looking for a loan or doing business with some kind of institution that needs access to your credit report. These occur when you are applying for a mortgage, applying for a credit card or applying for any kind of loan including student loans.

The other kind of inquiry is a soft inquiry which will not be shown on your credit report to anyone other than you and do not have any kind of impact on your credit score. These kinds of inquiries are when you request your own credit report, an employer performs a background check or when you apply to some kinds of utilities. 

The only kind of inquiry you need to worry about is a hard inquiry and they are easy to control if you know about them!

How Do Hard Inquiries Affect Your Credit?

Hard inquiries themselves are not bad. Everyone who has ever applied for a loan or opened a credit card has generated a hard inquiry by doing so. Hard inquiries are only bad when you have too many of them.

Hard inquiries make up about 10 percent of your overall credit score, which is a lot. There is no one number to stay below because each hard inquiry affects everyone differently. It depends on your own unique credit history to determine how much it will affect your score but a single hard inquiry could ding your credit score up to 5 points.

How To Keep Hard Inquiries Low

The best way to avoid hard inquiries is to do research before applying for any credit card or loan. If you do your research ahead of time you will only need to apply once for exactly what you are looking for. Be realistic! If you apply for a card or loan and are denied that inquiry will still be on your report. Make sure what you are applying for is attainable.

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