It is a common question and the web is glutted with plenty of articles answering this question. You might have already read some before coming here. You should review your credit report, dispute and remove errors, make payments on time, maintain good balance, watch your credit utilization ratio, request reporting parties to direct credit bureaus to remove some entries from your credit report and so on. You can also work with free credit repair companies out there to help you.

We are going to tell you about one of the factors that can affect your credit score, credit inquiries. The impact of credit inquiries depends on how you are using your credit. visit Hani Zeini.


There are two types of credit inquiries including soft inquiries and hard inquiries. A hard inquiry can stay on your credit report for two years and hence affect your credit score. Hard inquiries can decrease your credit score and you might have to pay more interest rate. However, what does a credit inquiry mean?

Credit Inquiry

When you apply for a credit card or loan, the lender accesses your credit report from the credit bureaus and checks your credit score. Credit bureaus record the information reported by your lenders and credit card issuers. When a lender pulls your credit report, a soft or hard inquiry is made. The date, name of the company and the type of inquiry (soft or hard) are added to the report.

New credit, also including inquiries, makeup 10% of your credit score. An inquiry does not drop your credit score by more than five points. While your credit report reflects inquiries for two years, most scoring models consider credit inquiries occurring within the past year. They usually ignore older inquiries.

Hard Inquiries

A hard inquiry is added whenever a credit card issuer, a lender or any other financial institution checks your credit score before making a lending decision. These inquiries occur when you apply for a loan, mortgage or credit card. A hard inquiry can have a negligible effect on your credit score or in some cases, your scores might be dropped by a few points. A single hard inquiry does not have a significant role in whether your loan or card application will be approved or not. The damage done to your credit scores usually disappears even before the inquiry is dropped off. You might think that this is not too bad. However, what if you are applying for multiple credit cards at the same time? Think twice before you do so even within a period of a few months.  

Multiple hard inquiries occurring in a short span of time can create a negative impression. Credit card issuers and lenders might consider you a risky borrower. You make them believe that you are short on cash. So, spread out your loan or credit card applications.

Following are the common hard inquiries:

  • Credit card applications
  • Mortgage applications
  • Auto loan applications           
  • Student loan applications
  • Apartment rental applications
  • Personal loan applications

Soft Inquiry

Also known as soft pulls, soft inquiries are not generated when you shop for credit. However, this does not affect your credit scores. When you have not applied but a lender sends you a pre-approved offer, this generates a soft credit inquiry. When you check your credit score, this also generates a soft credit inquiry. If you already have a loan or credit card, your current lender can also review your credit report from time to time. This type of review inquiry does not appear on your credit report or affect your credit scores.

Inquiries made by an insurance company or an employer for checking your credit history are not considered while calculating your credit scores. So, when you are checking your credit report from the credit bureaus, this is not going to hurt your credit score. Both hard inquiries and soft inquiries give the same information. This information includes your payment history, credit history, any derogatory marks and debt management. You might not even know that soft inquiries are occurring on your account.

Following are the common soft inquiries:

  • Pre-qualified insurance quotes
  • Pre-qualified credit card offers
  • Checking your credit scores
  • Employment verification

Soft inquiries do not affect your credit scores. However, hard inquiries can. You can dispute hard inquiries if you have not authorized the hard pull. You can count on free credit repair companies or learn how to repair your credit score on your own.