Back to school on your credit: what’s an inquiry?

As students start semesters and parents prepare for playgrounds, proms and carpools, now’s a great time for anyone to get in the learning frame of mind. Here’s a quick & practical guide on a mysterious-sounding, but essential credit-related phrase: credit inquiry.

What’s an inquiry?

At its most general level, an inquiry happens when a request for a person’s credit information is made to a credit reporting agency. There are two types of inquiry: soft and hard.

What’s a soft inquiry?

A soft inquiry happens in two different scenarios:

  • You check your own credit report
  • Your credit report is viewed for the specific purpose of making you an offer (usually these are credit card companies or other potential lenders who want to review your credit information to see if you’re creditworthy enough in their eyes to make an offer for a specific product).

In either case, soft inquiries have no effect whatsoever on any credit score — they won’t raise it, they won’t lower it, they won’t help it or hurt it. In fact, they’ll only show up on a specific kind of credit report only you can see, available for free, once per year per major credit bureau at

Key takeaway: Soft inquiries are requests for your credit information only you can see. As such, they’re not factored into the calculation of credit scores.

What’s a hard inquiry?

Hard inquiries, on the other hand, are those that may show up on credit reports. That means companies developing credit scores may choose to include the number of inquiries in a person’s credit file as data used to calculate their score.

Generally, when you apply for credit and the potential lender performs a credit check as part of the application process, a hard inquiry will be made to one, two or all 3 major credit bureaus. Each lender is free to decide which credit bureau(s) they’d like to use for their credit checks or even if they’d like to check credit at all.

Hard inquiries remain on your credit report for 2 years, after which time, they’re required to be automatically removed.

Key takeaway: Hard inquiries are requests for your credit information, authorized by you, which are made with the purpose of evaluating your creditworthiness. Hard inquiries are listed for 2 years on the kinds of credit reports available to lenders and creditors.

Why you should be paying attention to hard inquiries.
As discussed above, hard inquiries may have an effect on your credit score. Typically, each hard inquiry has a minor, somewhat-temporary, and negative effect on scores taking it into account. For this reason, it’s a good idea to limit the number of hard inquiries in your credit file, especially ones made within a relatively short period of time.

One key thing to keep in mind, though, is that many credit-scoring models won’t penalize you for “rate shopping.” What does that mean? It means if you make several hard inquiries within a really short period of time, and the inquiries relate to one purchase (for example, you’re causing several hard inquiries because you’re shopping around for a good mortgage rate), those inquiries will typically count as one inquiry.

Another big reason to pay attention to inquiries is to help detect suspicious and potentially fraudulent activity. If you’re made aware of an inquiry in your credit file that’s completely unfamiliar to you, it may be a sign someone has stolen your identity and used it to apply for credit in your name.

Key takeaway: Now that you know what inquiries are and how they work, make sure to keep an eye on them. Start with your free credit reports at