What is ‘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.
Explaining ‘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.
Hard Inquiry FAQ
Are hard inquiries bad for your credit?
How many points does a hard inquiry affect credit score?
Can you remove hard inquiries from your credit report?
How many hard inquiries are bad?
How does a hard inquiry affect your credit score?
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