What is a hard inquiry?
A hard inquiry, also called a hard pull, is a type of credit check done to determine an applicant’s creditworthiness. It results when a consumer applies for credit, such as a car loan or credit card. The pull on the applicant’s credit history can lower their credit score. An inquiry will show up as a hard pull only if the consumer initiated it by applying for credit.
In most cases, a hard inquiry is necessary to obtain a new line of credit, and sometimes to raise the credit limit on existing accounts. All hard pulls show up on a consumer’s credit report and can lower her credit score and make lenders hesitant to give her credit, especially if there have been several hard inquiries in a short period of time.
Lenders can be wary when they see multiple hard inquiries in a brief period on a consumer’s credit report because it suggests the person is having financial difficulties. Some lenders do a hard pull for a credit line increase, but others waive the requirement for dependable, existing customers.
When someone applies for multiple loans or credit cards, each attempt shows up as a single inquiry on their credit report. However, if a consumer makes multiple applications for a mortgage or other loan within a 45-day period, FICO, the credit-score company lenders use most, counts it as a single inquiry. That’s because FICO assumes the consumer is shopping around for the best deal and is not desperate to obtain credit.
Not all inquiries into a consumer’s credit history count as a hard pull. When someone is preapproved for a credit card offer, it doesn’t show up on their credit report. That’s because it is an unsolicited offer and a preliminary screening, otherwise known as a soft inquiry.
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Hard inquiry example
Jack applied for a credit card online. The lender pulled his credit report to review his financial history, check his credit score and assess his overall creditworthiness. This is a hard pull that will ding Jack’s credit score, even if he is issued the credit card.