Free credit reports do not impact your credit score. Credit inquiries are divided into two categories: soft inquiries and hard inquiries. Free credit reports use soft inquiries to determine your credit, and soft inquiries have no impact on your credit rating or credit score. Hard inquiries, however, do impact your score.

Soft Inquiries

Soft inquiries are typically initiated by an individual or company looking at your credit for background purposes. When you personally initiate a credit check, including for a free credit report, it is considered to be a soft inquiry. Soft inquiries usually appear on your credit report, but they don't impact your credit score.

Hard Inquiries

Hard inquiries are generally conducted by lenders to decide if they should lend you money. These inquiries have a tangible impact on your score. Common examples of hard inquiries are those conducted when you go the bank and apply for a mortgage or to an auto dealership and apply for a car loan, but other credit inquiries such as those conducted when you rent a house or obtain a new mobile phone contract can come across as hard inquiries.

A hard inquiry impacts your score by a few points and remains on your credit report for two years. One hard inquiry may not be a problem, but lenders may look upon multiple high inquiries in close succession unfavorably. Multiple inquiries in a row can add up to a significant decrease to your credit score. From a lender's point of view, these inquiries could signal that you are having difficulty obtaining credit.

If you find a hard inquiry on your credit report that you are certain occurred without your permission, you can dispute it through the appropriate credit bureaus. You have the right to obtain one free credit report every 12 months from each of the national credit reporting companies: Equifax, Experian and TransUnion.

  1. Do inquiries for preapproved offers affect my credit score?

    Find out what types of inquiries are on a credit report, if they affect a credit score and how much a score is affected by ... Read Answer >>
  2. How does applying for student loans hurt my credit score?

    Discover whether shopping for student loans negatively impacts your credit score, and how concentrating your applications ... Read Answer >>
  3. How do balance transfers affect my credit score?

    Learn the ways a balance transfer can negatively and positively affect your credit so you can pay off debt while maintaining ... Read Answer >>
Related Articles
  1. Personal Finance

    Credit Scores: Hard Vs Soft Inquiries

    Creditors and even prospective employers want to know how well you handle your money. They use soft and hard credit inquiries to find out.
  2. Personal Finance

    Do Credit Inquiries Hurt Your Credit Score?

    There are two types of credit inquiries, but only one can lower your credit score. Learn the difference and act accordingly.
  3. Personal Finance

    Credit Karma Doesn't Hurt Your Credit Score, and Here's Why

    Credit Karma is a popular option for checking credit histories for free, and it doesn't hurt your credit score.
  4. Managing Wealth

    5 Common Misconceptions About Your Credit Report

    Your credit report is one of the most important factors in determining your ability to get loans and new credit and has a major influence on your rates.
  5. Investing

    5 Things You Need For A Good Credit Score

    How good a credit score you have depends on 5 factors. What they are and what it takes to better your credit rating if it's not as high as you'd like.
  6. Personal Finance

    5 Surprising Things That Will Hurt Your Credit Score

    Here are five ways that you can damage your credit score without even knowing it.
  7. Personal Finance

    Is Your Credit Score at 850? It Can Be!

    Use these tips to increase your credit score and your ability to get low interest rates on loans.
  8. Personal Finance

    Common Things That Improve And Lower Credit Scores

    Credit scores are used by lenders to estimate credit risk. Find out how you can better earn the trust of lenders and reap the benefits.
  9. Personal Finance

    4 Habits That Damage Your Credit Score

    Many common money habits can affect your credit score negatively without you even knowing it.
  10. Personal Finance

    Credit Repair: How to Improve Your Credit Score

    There is no quick fix for a bad credit score, but there are several strategies you can take to improve your credit rating and save money over the long term.
  1. Soft Inquiry

    A credit report check that does not affect an individual's credit ...
  2. Hard Inquiry

    A type of credit report check that may lower an individual's ...
  3. Credit Inquiry

    A transaction whereby a bank or other credit-issuing institution ...
  4. Appreciative Inquiry

    Definition of appreciative inquiry
  5. Credit History

    A record of a consumer's ability to repay debts and demonstrated ...
  6. Bad Credit

    A qualification of an individual's credit history that indicates ...
Trading Center