Hard Inquiry

DEFINITION of 'Hard Inquiry'

A type of credit report check that may lower an individual's credit score. A hard inquiry occurs when an individual applies for any type of credit, such as a mortgage, credit card or auto loan. The reason a hard inquiry may lower an individual's credit score is because someone who has recently applied for new credit is seen as a potentially riskier borrower.

Also called a "hard pull."

BREAKING DOWN 'Hard Inquiry'

The application for new credit indicates either that the individual may need credit as a result of a financial setback, or that the acquisition of new debt by the borrower makes him or her a higher lending risk. However, credit scoring formulas typically take into account that an individual might be shopping around for the best rate, so when multiple inquiries are made for the same type of credit in a short period, such as multiple mortgage applications, the individual's credit score is not dinged repeatedly.

The other type of credit report inquiry is called a soft inquiry, or soft pull. Soft pulls include inquiries such as an individual checking her own credit report, employer checks of job applicants' credit reports and credit card companies' screening of applicants for preapproved credit offers. This type of credit report check does not affect an individual's credit score because it is for informational purposes only.

RELATED TERMS
  1. Soft Inquiry

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

    A transaction whereby a bank or other credit-issuing institution ...
  3. Good Credit

    A qualification of an individual's credit history that indicates ...
  4. Credit Mix

    The types of accounts that make up a consumer’s credit report. ...
  5. Bad Credit

    A qualification of an individual's credit history that indicates ...
  6. Credit Rating

    An assessment of the creditworthiness of a borrower in general ...
Related Articles
  1. Credit & Loans

    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. Credit & Loans

    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. Credit & Loans

    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.
  4. Credit & Loans

    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.
  5. Credit & Loans

    7 Credit Myths You Thought Could Hurt Your Score

    The Internet is brimming with tales of how your complete lack of knowledge surrounding credit scores is costing you big every day.
  6. Credit & Loans

    A Quick Way to Boost Your Credit Score

    The easiest technique ever for raising your credit score. Why don't more people use it?
  7. Credit & Loans

    5 Surprising Things That Will Hurt Your Credit Score

    Here are five ways that you can damage your credit score without even knowing it.
  8. Credit & Loans

    What Do Credit Score Ranges Mean?

    Take a closer look at what credit scores in each range mean for your financial future.
  9. Personal Finance

    Looking To Clear Up Your Credit Report?

    If you look at your credit report you might see any number of various items that are harmful to your credit score, but you can learn how to remove them.
  10. Credit & Loans

    9 Ways To Improve Your Credit Score Today

    When it comes to finances, there are a number of goals that you might have established, such as saving money, paying down debt or new investments.
RELATED FAQS
  1. Does shopping for the best interest rate affect my credit score?

    Learn about hard and soft credit inquires and how shopping for credit may negatively affect credit scores. Explore strategies ... Read Answer >>
  2. Does every inquiry affect a credit score?

    Check a credit report to prevent an overabundance of hard inquiries and to obtain an overall picture of your credit score's ... Read Answer >>
  3. Do free credit reports affect your credit score?

    Find out whether your credit score is affected when you are using one of the services that let you check your credit rating ... Read Answer >>
  4. 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 >>
  5. How would a mortgage pre-approval vs pre-qualification affect my credit score?

    I am a married potential first time homebuyer concerned about how requesting a mortgage pre-approval v... Read Answer >>
  6. 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 >>
Hot Definitions
  1. Labor Market

    The labor market refers to the supply and demand for labor, in which employees provide the supply and employers the demand. ...
  2. Demand Curve

    The demand curve is a graphical representation of the relationship between the price of a good or service and the quantity ...
  3. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
  4. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
  5. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  6. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
Trading Center