Credit Inquiry

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A credit inquiry is a credit report request. Every time you apply for new credit or request an increase of credit it is considered an inquiry.

When you complete an application for credit and provide your personal information, it is reported to the credit bureaus.

Types of Inquiries

There are two types of inquiries. Each type has a different implication for your credit score.

Soft Inquiry

Some lenders perform a soft inquiry using just your name and address to see if you prequalify for a loan. Soft inquiries are reported in your credit report but only viewable by you and do not impact your credit score. When accessing your credit report, you may see a number of lenders who have performed a soft inquiry to determine if you prequalify for an offer. Sometimes these soft inquiries were not initiated by you. You can opt-out of prescreened marketing offers.

Hard Inquiry

Each time a credit application is completed or a credit line increase is requested counts as a hard inquiry. Hard inquiries are reported and viewable to others with access to your report. It may impact your credit score.

Are credit inquiries bad?

A large number of inquiries on a credit report can sometimes make a credit score lower. It may impact your ability to be approved for future credit or lead to a less than favorable loan term. That’s because every hard inquiry is considered a hit and lowers your credit score a few points. If your score is within a specific range, a credit application aka a hard inquiry may cause your score to fall a few points bringing you down the credit score range.

If you’re applying for credit and concerned about inquiries, limiting the number of inquiries can ensure your score is less impacted.

You can view your inquiries by requesting a copy of your credit report through annualcreditreport.com.