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Understanding Hard Inquiries on Your Credit Report

Written by Equifax Reporter on April 7, 2016 in Credit  |   27 comments

As we’ve written about previously on the Equifax Finance Blog, some consumers are reluctant to check their credit report because they are concerned that doing so may impact their credit score. While pulling your credit report does result in an inquiry on your credit report,…

HardInquiriesAs we’ve written about previously on the Equifax Finance Blog, some consumers are reluctant to check their credit report because they are concerned that doing so may impact their credit score. While pulling your credit report does result in an inquiry on your credit report, it will not affect your credit score. In fact, checking your credit report may help you get in the habit of monitoring your financial accounts.

One of the best ways of establishing credit smart behavior is to understand how inquiries work and what counts as a hard inquiry on your credit report.

What is a hard inquiry?

When a lender or company makes a request to review your credit report as part of the loan application process, that request is recorded on your credit report as a hard inquiry, and it usually will impact your credit score. This is different from a soft inquiry, which can result when you check your own credit or when a promotional credit card offer is generated. Soft inquiries typically do not impact your credit score.

Hard inquiries serve as a timeline of when you have applied for new credit and may stay on your report for up to 24 month s. Depending on your unique credit history, they could indicate different things to different lenders.

Recent hard inquiries on your credit report tells a lender that you are currently shopping for new credit. This may be meaningful to a potential lender when assessing your creditworthiness.

Exceptions to the impact on your score

If you’re shopping for a new auto loan, mortgage loan, or student loan,the multiple inquiries are generally counted as one inquiry.

The timeframes vary for these exceptions: Hard inquiries may have a limited effect of just a few weeks or potentially up to 45 days, depending on the credit scoring model being used.

This situation does not apply to credit cards or when you apply for several credit cards at once..

Plan before shopping for a loan

Before shopping for a loan, it’s always smart to proactively plan your finances.

First, learn whether the type of credit you’re applying for can have its hard inquiries treated as a single inquiry. If so, determine the applicable timeframe. Then you can plan your shopping period, accordingly.

Second, you may also want to check your credit before getting quotes to understand what information is reported in your credit file. You can obtain a free annual credit report from Equifax, Experian and Transunion each per year here.

If you’re worried about the effect that multiple hard inquiries may have on your credit file, it may be tempting to accept an offer early rather than allow multiple hard inquiries on your credit. However, consider your individual situation carefully before cutting your shopping period short. In many cases, the impact hard inquiries have on your credit score from shopping around will likely be minimal compared to the long term benefits of finding a loan with a low interest rate.

The more informed you are about what happens when you apply for a loan, the better you can prepare for the process. Making a plan for how you will manage hard inquiries now, before you start shopping, may help you prepare for any impact they might have on your credit score.

Related Articles:
Should You Consider a Longer Car Loan
Student Loans by the Numbers: Is College Worth It?
Should I Take Out a 401(k) Loan?

The information contained in this blog post is designed to generally educate and inform visitors to the Equifax Finance Blog. The blog posts do not give, and should not be assumed to provide, personalized tax, investment, real estate, legal, retirement, credit, personal financial, or other professional advice. Before making any financial decision, you should always consult with the appropriate professionals who can explain your options, rights, and legal responsibilities, and advise you on any tax, legal, credit, or business implications that may result from those decisions. The views and opinions expressed by the authors of blog posts are their own views and may not be the views or opinions of Equifax, Inc. and/or its affiliates.


27 comments

  1. Hiwet Z. says:

    Please help:For Equifax if i got a debt that was a mistake deleted and two other’s that was deleted being a system error by credit agency does my credit score go up forsure? And by how much? I paid for factual 3 in one report from Equifax was told my Equifax current score is 608 i was told & found out these three things that was on my report by no fault of my own that i now resolved and removed is clear how long does it take and will my score go up and by how much how is it calculated?. Thanks

    • Rich says:

      I want to cancel at least five credit cards . My score is almost 800.Will the removal of these cards lower my score? The largest is a 25,000

      • Robert says:

        I am told that it is better to look at debt to ratio of income. As long as there are no charges to keep cards, then keep them. Eliminate higher percentage rate cards if there is a yearly fee. 800 is a great score. I hope this helps.

        • Lucy says:

          You should also look at the age of the credit cards. Eliminate newer cards if you have to eliminate any. The age of your credit will also impact your credit as well as the amount of credit available to you.

    • Robert says:

      Time frame can be as fast as every 6 days to 6 months. See if your bank offers free fico scores or Capital one Credit score offers Creditwise to see your scores and it is a FREE service. I use both.

    • Paulette H says:

      I had a malpractice case and my lawyer is supposed to pay this amount of $10096 and he won’t pay and he said he didn’t have to pay. That I had to pay when the other party required me to be looked at by their doctor’s. What can I do it’s affecting my credit. I can’t pay the bill because of health. Please help. I don’t know how to get my lawyer to pay he was supposed to pay from his part of my bill out of his fee.

  2. Mari says:

    If you find a discrepancy, what is the best way to contest it? Do you start with the credit report company or with the faulty entry (company) on the report, especially if you know that the entry (company) is erroneous and unrecognizable.

  3. M.Ward says:

    I’m in the process of selling my house.With that debt being paid off will my credit score increase because of less debt or will it decrease?

  4. mike says:

    lol @poor credit

  5. Susan says:

    A company got my information and applied for credit cards in my name. They weren’t successful but now I have hard inquiries on my credit report. That brings my credit score down. I have been trying to bring my score up and it just seems impossible. I called the credit card companies that were contacted with an application for credit in my name. They said they would have the inquiries removed but it hasn’t happened. I even called the credit companies and nothing has happened.

    • Mr C. says:

      Susan, you have to approach this matter in a different way. You are a victim of identity theft and as such you will be required to open a report with your local police agency. Once that has been done then you have the right to open up an identity theft case with the credit reporting companies.

      I have been down this road now three times and once you go through this once you will never forget the steps. The system is rigged against the honest and favors the dis-honest as no legal actions will be taken against them because the amount does not justify the cost of legal action for such a minor amount. When in reality every little bit they stal from each person adds up to millions of dollars – so file a report and then get your credit back and lock up your credit files for three years. Good luck

  6. Ted says:

    I am shopping for a new car and had 1 dealer run a credit app on me. Everything was fine but we didn’t make a deal on a car. Then as I browsed the other dealers in the area they seem to have the results of my application as well. My score dropped 10 points! 10 points and I did nothing wrong. All my payments have been on time for 6 years, no complaints from anyone. Why do I have to suffer for this?

    • Robert says:

      Every time you apply for credit which is known as a hard copy it will effect your credit score. I recommend that you ask for a soft copy credit check so it does not effect your credit score. Most dealers will tell you different. They are lying to you just to earn your business and trust. Common from dealers. Find the car you want before having credit checked. Same with any type of loan applications you might ask for. Credit card companies will do credit line request for increase by you as a soft credit check that only you see. As your credit score goes down so does income to debt ratio.

    • Ray P says:

      Ted, Several weeks ago I co-signed on a personal loan for my brother and the loan was declined because of bad credit that my brother had. His bad credit was reflected on my good credit [score 746] by Equifax. What can I do to have this report corrected?

  7. Mary R. says:

    Be wary of lenders that really are brokers and promise that you will receive offers from up to 5 different lenders. What they don’t tell you is that those 5 potential lenders each feel privileged to draw a hard inquiry on your credit report because you agreed to let the original “lender/broker” pull your credit. So after applying to what I thought were 2 different lenders but were, in fact brokers, I now have 10+ hard inquiries from just those 2 original ones- and boy does it affect your credit score!
    The most well-known that fall into that category are Lending Tree and Quicken Loans.
    All of the sources say that if you are shopping for, say a mortgage, to get the best rate, and it’s within a certain period of time, that those inquiries will be counted as one. WRONG!
    Don’t believe the stories they tell, and make sure you know who you’re dealing with.
    And know that ALL of the inquiries are counted.
    Also, since there is no STANDARD for credit reporting, and each company, such as Equifax, play by their own rules, and not all companies report out to all credit bureaus, your credit score could be different on each credit bureau.
    I suggest that you ask a company that you are applying to which credit bureau they pull from, and then if you already know your scores, you can choose the one that pulls from your highest score.

  8. Alexa says:

    Why do hard inquiries stay on even if years have passed? I still have some showing from 2014!

  9. SUE says:

    I HAVE GREAT CREDIT. I HAVE ALWAYS PAID MY BILLS ON TIME AND JUST GOT MY FIRST CREDIT CARD AT AGE 44. I WAS MAKING OCCASSIONAL PAYMENTS ON A HOSPITAL BILL FROM A WRONGFUL INJURY UNTIL SETTLEMENT WAS REACHED WITH THE INSURANCE COMPANY. I JUST RECEIVED A NOTICE FROM THE HOSPITAL THAT THEY SENT MY ACCOUNT TO COLLECTIONS! YIKES!! HOW BADLY WILL THIS EFFECT MY CREDIT REPORT? ALSO, HOW MUCH WILL IT CHANGE IF I GO AHEAD AND PAY IT OFF RIGHT AWAY?

    • Mr. C. says:

      Sue, challenge the entry that the collection agency placed against you. In your challenge state that you are still in a legal dispute. Then provide this information to your lawyer so that they can add additional damages to your case.

  10. Greg says:

    How do I dispute a hard Inquiries?

  11. Anonymous says:

    Every time I pay something off instead of my credit score going higher it keeps going lower and it’s very frustrating. I don’t have a student loan, I don’t have 2 house mortgages, I don’t have 3 car loans.how do I get these things off of my report. I take having a high credit score very important and this is very very frustrating.

    • McG says:

      Eliminate some of your open credit accounts. Score going down may be related to multiple lines of credit open, with high credit value. Close a couple of those accounts and scores can climb.

    • Chwh16 says:

      After you pay things off, are you closing the card/account?

  12. Anonymous says:

    I paid my car loan off over ten years ago, still on my credit report. I did pay some late. But in Owe them zero.

  13. Sonia says:

    I had a small loan with an organization. They sent me an offer to pre-pay the loan with a 20% discount offer. Once I sent them the check to get the benefit of 20%, they are saying it will be labeled as a loan “settlement” versus a loan “Payoff”. I was never late in my payment, always on time and nothing overdue.

    Is this settlement will impact my credit rating?

    Thanks

  14. Christine says:

    How can a voluntary repossession be challenged on a credit report? Would like to have it removed.


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