What is a hard inquiry? How long does it stay on your credit report? Can you get a hard inquiry removed? These are just a few questions we will answer about hard inquiries and how it affects your credit score.
What Is A Hard Inquiry?
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A hard inquiry is a credit history report that’s been generated by an individual applying for credit. A hard inquiry or a “hard pull” occurs when you apply for a credit card, personal loan, auto loan, rental application or home mortgage. This means that a creditor has requested to look at your credit history before they approve or deny you for any new lines of credit.
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What is a soft inquiry?
A soft inquiry is when someone runs your credit check that is unrelated to lending money. These inquiries typically are not associated with repayment risk so it does not affect your credit like a hard inquiry does. Some examples of a soft inquiry are utility companies might check your credit to determine if a security deposit is required, auto insurance companies that need to set premiums and safe driving habits, or credit card companies that you already have accounts with might check your credit before they offer you new products.
How Many Hard Inquires Will Lower My FICO Score?
A hard inquiry will lower your FICO score by around five to ten points. So if you apply for several new lines of credit at a time such as a new credit card, an auto loan and a personal loan this can affect your credit score by 15-30 points. According to myFICO it is best to not open new accounts rapidly as this can affect your credit score. New credit makes up 10% of your FICO score which doesn’t affect your credit score too much, but opening new credit can lower your credit age which can have a bigger impact on your credit score.
To make sure your credit score isn’t affected too much you should always make your payments on-time and have a low credit utilization. These two things make up the majority of your credit score, with late payments being the biggest factor that can negatively impact your score.
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How Long Does A Hard Inquiry Stay On Your Credit Report?
A hard inquiry can stay on your credit record for up to two years from the date of request, with some exceptions such as mortgages and student loans where it may stay until the loan is paid off. A hard inquiry will be removed after two years of it appearing on your credit report, and multiple hard inquiries can be reduced over time with timely payments and low balances.
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Can I Have More Than One Hard Inquiry?
You can have multiple hard inquiries at a time, but the more hard inquiries you have on your credit report, the less likely it is that a lender will approve of an application. For best practices, you should only open new lines of credit once every few months to space out your new lines of credit.
Can You Get A Hard Inquiry Removed?
You may be able to get hard inquiries removed by checking with the company that generated it or if you’ve had an account for at least two years and maintained a good payment history, some credit card issuers will remove hard inquiries from your report.
You can remove any hard inquiries from your credit report that you didn’t authorize, or notice an error. Once you notice an error you can mail dispute letters to the major credit bureaus to tell them about the error along with proof. You can get free dispute letters here.
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How Many Points Does A Hard Inquiry Affect Your Credit Score?
A hard inquiry will affect your credit score by about five to ten points for each hard inquiry. The hard inquiry itself does not affect your credit score on its own. It’s the hard inquiries plus other factors that make up your credit profile, which in turn determines your credit score. If you’re looking for ways to improve it or get a higher one, consider softening negative items such as late payments and high balances with positive changes like making more timely payments and paying down your balances.
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How Can I Remove Hard Inquiries From My Credit Report?
If hard inquiries are preventing you from getting the credit that you need, there’s a simple way to remove them. If you check your credit report at AnnualCreditReport.com for free, which you should do frequently, and look for errors on your credit report such as inquiries you don’t recognize you can get these hard inquiries removed.
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Contact the creditor in which the hard inquiry came from that you don’t recognize. You can find their contact information on your credit report. They will be able to tell you where this inquiry came from and the reason. The inquiry might have been from a lending partner where you applied for an auto loan, insurance or a credit card. If the hard inquiry is indeed connected to fraudulent activity follow these steps below.
- Opt for a credit freeze to protect your credit reports so another hard inquiry won’t occur.
- Contact law-enforcement agencies to report the fraudulent activity.
- Dispute the hard inquiry to have it removed form your credit report by mailing dispute letter to the three major credit bureaus Experian, Equifax and TransUnion. You can get your free dispute letters here.
- Monitor your credit regularly so you can stay on top of your credit score and notice any errors. Some of the best credit monitoring apps include Credit Karma, myFICO, and Credit Sesame.
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In Conclusion
Hard inquiries are used when creditors need more information about you before they decide if they should give you a new line of credit. A hard inquiry can temporarily lower your credit score by five to ten points and can stay on your credit report for two years. If you notice a hard inquiry that you don’t recognize contact the lender and file a dispute to the credit bureaus to get it removed from your credit report.
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