Credit inquiries and their impact on your qualifications to borrow money (get a mortgage, credit card, car loan, etc.) is an area of great confusion for many people.

First, it is a complex topic. Second, people from outside of the industry write much of the content you find online.

We created this complete guide to credit inquiries to help you learn about key definitions, determine the effect on credit scores, and decide if attempting to remove them is worth your time and/or money.

Most people have bigger fish to fry.

What Are Hard and Soft Credit Inquiries

You need to learn five critical concepts in order to understand what hard and soft inquiries are, what they mean to your credit score, and what makes them different.

  1. An inquiry means a person or company viewed your consumer report
  2. A consumer report contains identifying and financial information
  3. The initiator and reason for viewing the file determines hard vs soft
  4. Only the bureau that furnished the report logs the event
  5. The bureaus present two file versions: one for consumers and one for lenders

Hard Inquiries

Hard inquiries display on your consumer report when you apply for a loan or credit card. Your score goes down when checked by a lender when you initiate the transaction. The first step lenders take in the underwriting process is to pull a copy of your file from one or more bureaus.

  1. They appear only on the bureau(s) file that furnished the data. For example, if Experian furnishes the report, the hard inquiry displays at Experian, but not at Equifax or TransUnion.
  2. It does not mean that you were declined. Hard inquiries are an early warning signal to lenders that a new borrowing account could be on the horizon. Credit-seeking activity hurts your risk profile temporarily.
  3. Hard inquiries appear on both file versions that lenders and consumers see. Scoring algorithms such as FICO and Vantage consider this activity when making predictions about your future behavior.

A common mortgage industry practice illustrates these three points. Mortgage companies require a letter of explanation after they detect a recent hard inquiry on a consumer report without a matching trade line. They need to know what new accounts might be opening soon. Since mortgage companies pull a tri-bureau merged file, they always find at least one.

Soft Inquiries

Soft inquiries follow similar rules but with several key points of distinction. Some can appear without your permission or authorization. Do not worry. This is not a cause for concern.

  1. Soft inquiries only appear on the bureau file that furnished the data.
  2. They only appear on the report versions that consumers see about themselves. Lenders and scoring algorithms cannot see the version displaying soft inquiries. Therefore, they do not affect underwriting decisions.
  3. The bureau furnishing the report will log a soft inquiry for five different reasons.
    1. An existing lender reviews your behavior
      1. Automatic credit line increases
      2. Collection activities
    2. Banks make pre-approved credit offers
    3. Consumers attempt to pre-qualify themselves
    4. Loan aggregators create anonymous profiles – no identity data
    5. Other business transactions with a permissible purpose
    6. A consumer pulls his or her own file

The last three reasons warrant a more detailed explanation as they create a great deal of confusion.

Preapproved Offers

Preapproved credit offers log a soft inquiry when the lender initiates the transaction. Banks have a permissible purpose to view a consumer report (without explicit permission) provided that the person receives a tangible benefit in return. In this case, the tangible benefit is a firm offer of credit.

The preapproval process works in the opposite fashion when the consumer initiates the transaction. This results in a hard inquiry because it accurately reflects new account seeking behavior.

  • Mortgage preapprovals
  • Car loan preapprovals

Other Transactions

Other business transactions with a permissible purpose will result in a soft inquiry after the company pulls your report. In these cases, you the consumer, initiate the transaction. However, because you are not seeking to borrow money, the bureau classifies the activity as a soft pull.

  • Companies wanting to predict risky behaviors
    • Car insurance
    • Homeowners insurance
    • Employment background screening
  • Companies providing services in advance of payment

Checking Scores

Checking your credit score does not lower your ratings. You are not applying for a loan or credit card. You simply want to monitor progress and fluctuations. Therefore, the bureau furnishing the report logs a soft inquiry when a person looks at his or her own information.

The soft inquiry does not display on the report version seen by lenders and scoring equations. Feel free to check your own score frequently (at each of the three bureaus), without fear of hurting your qualifications.

Soft Pull Lenders

Take these core concepts to understand what is really happening with lenders touting a soft pull underwriting process. Clearly, if you are initiating a transaction to borrow money this simply cannot be true – yet the promise is legitimate.

One of four things is happening as illustrated by these examples.

  1. Soft pull credit cards do not involve a credit check. The bank is issuing a secured credit card with a limit that matches the amount you have in their savings account. You are not borrowing money.
  2. Soft credit check personal loans may use alternative consumer reports. They pull a file from a bureau not named Experian, Equifax, or Transunion. The inquiry logs on the alternative file only and therefore does not hurt your FICO or Vantage score.
  3. Soft pull loan aggregators at not lenders and do not handle applications. They create anonymous profiles (financial data without your identity) and allow lenders to bid on the depersonalized summary.
  4. Soft credit check mortgages and auto loans rely on the fact that FICO and Vantage scores ignore “shopping inquiries.” It is common and sensible for home and car buyers to shop around for the lowest price and interest rates. Therefore, the equations count multiple shopping checks as one when they occur within 14 to 30 days.

Hard Inquiry Effect on Score (How Many Points)

In general, a single hard inquiry showing on your consumer report results in an immediate drop of 1-5 points on your credit score (FICO or Vantage) – at the bureau furnishing the data (Experian, Equifax, and/or TransUnion). A soft inquiry has no impact.

Both the FICO and Vantage scoring systems have five major factors in their equations. The “New Credit” factor makes up 10% of the average person’s number and consists of two components.

  1. Hard inquiries precede most newly opened accounts.
    1. Display only on the bureau furnishing the report
      1. Drop 1 – 5 points at furnishing bureau
      2. Drop 0 points at non-furnishing agencies
    2. Show the date and company name
  2. Newly opened accounts follow hard inquiries by 30 days or more
    1. Often display at all three agencies
    2. Show dated opened and company name
    3. The impact to score varies by account type and terms
      1. Credit card limits and initial balance
      2. Mortgage principal amount and repayment terms
      3. Car loan amount and schedule
      4. Unsecured personal loan amounts and terms
      5. Home Equity Line of Credit
      6. Others

After 30 Days

The negative impact of hard inquiries to your credit score lasts for 30 to 60 days or continues depending on the outcome of the application of the new borrowing account.

  • Approvals: Hard inquiries are meaningless after the lender approves the application and reports the new account to the agencies. The scores no longer need to factor in that you might borrow more money in unknown amounts with unknown repayment terms. They now have the exact answer.
  • Declinations and Delays: Hard inquiries continue to hurt your credit score if the lender declines the application or delays their decision. Banks do not report declinations to the agencies. Therefore, the uncertainty about possible new obligations lingers. However, the uncertainty slowly fades away over 12 months.

After 12 Months

The negative impact of hard inquiries on your credit score goes away after 12 months. You can verify this yourself by studying reason codes. Reason codes are simply a listing of the score factors that had the largest negative impact.

Banks must include up to four reason codes in an adverse action letter after declining an application. The reason code, “Too many inquiries in the last 12 months” illustrates two important points made above.

  1. “Too many inquiries” signals high-risk credit seeking activity
  2. “In the last 12 month” confirms they are meaningless beyond this period

Stay on Report

Hard inquiries stay on your credit report for 24 months. The agencies automatically delete these entries so that they no longer display after this period expires.

Lenders and scoring algorithms can no longer read these data and bake them into their equations. However, at this point, it no longer matters.

After Dropping Off

Your credit score does not go up when a hard inquiry drops off your report after the 24-month expiration period. The data no longer have any predictive value.

  • 0 – 30 days old: negative effect
  • 0 – 12 months old: possible negative impact
  • 12 – 24 months old: meaningless

Meaningless information that expires from your file has no impact on your credit score. Some people describe online of their scores going up by 50 points or more after the item expired. Do not believe it. These are one-off observations of changes driven by other factors.

Hard Inquiry Removal Services

Now that you understand the basics, we can address hard inquiry removal services and letters. We see plenty of chatter online about how to remove these items from a credit report. Much of this effort either go to waste or misses the bigger problem: identity theft and fraud.

Pointless Effort

Why waste your time disputing meaningless entries? Be wary of any company offering services to remove inquiries from your consumer report that will not improve your credit score.

  • Items lenders and algorithms never see
  • File pulls followed by corresponding new accounts
  • Requests more than 12 months old

Unauthorized Inquiries

Removing unauthorized inquiries from your credit report places the focus on the wrong issue. While doing so may result in a short-lived boost in your score, it overlooks a much bigger problem!

  • Unauthorized access is an early warning sign of fraud
  • Identity thieves may be using your personal information
  • New accounts in your name may quickly follow
    • Thieves take the money and run
    • They leave you with delinquencies on your file
    • Derogatory marks hurt your score for 7 years
    • Payment history makes up 35% of your score

Focus on protecting your ratings from bad payment history instead. Freeze your file at each of the big three agencies (Equifax, Experian, and TransUnion). Place a fraud alert on your file so that lenders know to decline any new account requests from an imposter.

Authorized Inquiries

Removing authorized hard inquiries from your credit report is dishonest. Any company promising to delete truthful information from your file is by definition a shady operator. Be careful about sending this outfit your hard-earned money.

The bumpage method is sketchy at best, and you can send dispute letters yourself to remove inaccurate entries.


Credit inquiry “bumpage” is a sneaky technique to push older entries off your file. The theory behind this approach is that the agencies have practical limits to the number of items they can store for each consumer.

Bumpage requires the person to pull a copy of their consumer report 60 to 70 times or more – at each bureau. This supposedly results in their systems pushing the older hard inquiries off of the file to make room for the newer soft versions.

Make sure that you factor in the cost of pulling your own file up to 200 times. It probably is not worth it given all the other factors noted above.


The Federal Trade Commission provides a free resource that you can use to remove inaccurate hard inquiries from your credit report. You do not need to hire a company to do this for you.

  • Dispute letter template for each bureau
  • Mailing addresses and phone numbers
  • Detailed instructions to complete the letters