In the context of credit and lending, “inquiries” refer to requests made by individuals or organizations to access your credit report and review your credit history. These inquiries can be categorized into two main types: hard inquiries and soft inquiries, each serving different purposes and affecting your credit report differently.

Hard Inquiries:

   – Hard inquiries, also known as “hard pulls” or “credit pulls,” occur when a lender or creditor reviews your credit report as part of their decision-making process for a credit application you’ve initiated. Examples of hard inquiries include applying for a credit card, mortgage, auto loan, or personal loan.

   – Hard inquiries are typically recorded on your credit report and can have a temporary negative impact on your credit score. Each hard inquiry may lower your score by a few points, and the effect can last for a short period.

   – Multiple hard inquiries within a short time frame, often referred to as a “credit inquiry spree,” can raise concerns for lenders and may further impact your credit score.

Soft Inquiries:

   – Soft inquiries, also known as “soft pulls,” occur when someone accesses your credit report for purposes other than making a credit decision related to a new credit application. These inquiries do not affect your credit score.

   – Examples of soft inquiries include checking your own credit report, pre-approval offers from lenders, and background checks by employers or landlords.

   – Soft inquiries are not visible to lenders when they review your credit report for credit applications.

It’s important to understand the distinction between hard and soft inquiries and their impact on your credit. Here are some key points to keep in mind:

– Hard inquiries can affect your credit score, while soft inquiries do not.

– Multiple hard inquiries in a short period may raise concerns for lenders and affect your ability to secure new credit.

– Checking your own credit report (a soft inquiry) does not harm your credit score and is encouraged for monitoring purposes.

– You have the right to request a free copy of your credit report from each of the three major credit bureaus (Equifax, Experian, and TransUnion) once a year through AnnualCreditReport.com without affecting your credit score.

– If you’re rate shopping for a specific type of credit (e.g., auto loans or mortgages), multiple inquiries for that purpose within a specific time frame (usually 14 to 45 days) are typically treated as a single inquiry to minimize the impact on your credit score.

Managing inquiries responsibly, especially hard inquiries, can help you maintain a healthy credit profile. It’s advisable to be selective about applying for credit and to understand how credit inquiries can affect your credit score.

Hard Inquiries:

Hard inquiries typically stay on your credit report for about two years.

While they remain on your report for up to two years, their impact on your credit score is most significant in the first 12 months. After that, their effect gradually diminishes.

Lenders can see hard inquiries when reviewing your credit report, and multiple hard inquiries in a short period can raise concerns and potentially lower your credit score temporarily.

Soft Inquiries:

Soft inquiries have a shorter lifespan on your credit report.

They are generally visible on your report for a shorter period, often around 24 months or less.

Importantly, soft inquiries do not have any negative impact on your credit score. They are typically generated for informational or promotional purposes and are not associated with credit applications.