When you’re trying to repair credit, it’s all about taking a holistic approach to the problem.
You need to identify every area you can make improvements, no matter how big or small. That’s because every small change is one more brick in the wall, on your way to having great credit.
It’s easy to dismiss credit inquiries as being an inevitable and necessary part of borrowing money, so not something to worry about as you work to rebuild your credit.
But these inquiries — especially hard searches — can have a much bigger impact on your credit score than you probably assumed.
Don’t worry, though. I’m here to share the secrets about hard inquiries, and how they fit into the credit repair jigsaw.
In this article, I’ll answer these questions:
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What is a hard inquiry?
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What’s the difference between a hard and soft inquiry?
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How long do hard inquiries stay on a credit report?
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How do hard inquiries impact credit scores?
By the end, you’ll know everything you need to know about hard inquiries, and understand their impact on your credit score.
What is a hard inquiry?
Whenever you apply for credit, the lender needs to assess your current and past financial situation to calculate the risk. This could be for a credit card, loan, mortgage, or something else.
Imagine a friend of yours asks to borrow $100. You don’t just hand over the cash without thinking about it first. You’ll think about any times you’ve lent them money before, or even instances where someone else has lent them money. Did they pay it back in the agreed time? Did they pay it back at all?
This is essentially what the lenders are doing when they carry out a hard inquiry. They’re requesting information from a credit bureau to help them make this decision. This will include things like:
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Payment history: This is arguably the most crucial factor — showing how responsibly you've handled past debts (on-time payments, late payments, collections, etc).
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Credit balances: The total amount of outstanding debt you currently have across all credit lines.
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Credit lines and types: Information on different types of credit you have, such as mortgages, auto loans, personal loans, credit cards, etc.
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Derogatory marks: Any negative information in your credit history, such as foreclosures, repossessions, bankruptcy filings, or charge-offs.
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Public records: Records of judgments, liens, or tax liens filed against you.
They can then use this information to calculate the risk to them if they decide to lend you the money you’ve asked for.
Using this information, they might accept your application, reject it, or even counter-offer with alternate rates/amounts.
What is the difference between a hard and soft inquiry?
When people talk about credit inquiries, there are two types that will be mentioned — hard and soft.
As we’ve already touched on, a hard inquiry, also known as a hard search or hard pull, is when you apply for new credit or enter into a contract with another service provider. The company will then request your credit report to check how you are currently or have previously managed credit.
A soft inquiry, also known as a soft search or soft pull, can happen for multiple reasons. This includes things like checking your own credit history, a potential employer or landlord may doing a background check, and when a lender is checking you out for a pre-approved offer.
But while a hard inquiry will provide a comprehensive credit history, a soft inquiry will only return a limited snapshot of your credit report. This will be basic information like name, address, etc, as well as your credit score and sometimes recent hard inquiries.
Another huge difference is that a soft inquiry won’t make any impact on your credit report or score, but a hard inquiry will.
This is why you need to be very careful with what type of inquiry you authorize someone to request. As I’ll get into a bit later on, you want to be very careful with the number and frequency of hard inquiries you allow.
How long do hard inquiries stay on a credit report?
As I mentioned, soft inquiries won’t show up on your credit report, but hard inquiries will stay on your report for two years.
It’s not quite that simple, though.
For the first year, the inquiry will be visible on your report, and will likely affect your credit score. This is typically around 5 points or less, but it depends on the bureau.
And for the second year, the inquiry will still show on your credit report, but it will have no significant impact on your score.
Then after two years the inquiry will automatically be removed from your credit report altogether.
How do hard inquiries impact credit scores?
As I mentioned at the start, credit inquiries are a small part of a much bigger credit repair puzzle. But that doesn’t mean they can’t make a decent impact on your credit score and ability to get new credit.
I mentioned that a hard inquiry can decrease your score by up to 5 points, but this is a single inquiry in isolation. If you were shopping around for a new credit card and applied to a few different lenders in a short space of time, that can have a larger impact on your credit score.
This is because lenders view hard inquiries as a potential signal of increased risk. They see you actively seeking new credit, which could raise concerns about your ability to manage multiple debts.
To avoid this, you should shop around strategically, only applying for credit when you’re confident it’s the best option for you. This helps you to avoid unnecessary applications, which can really start to add up.
Compared to other factors, hard inquiries shouldn’t be causing you too many problems, but it’s still important to be mindful of their impact.
Top Tip: Monitor your credit report regularly to keep track of any inquiries, and the impact they have on your credit score.
Can hard inquiries be removed from credit reports?
If you have a lot of hard inquiries dragging down your credit score, there are things you can do to potentially remove some of them.
The first step in this process is to look for any conflicting information in your personal data. Looks for misspelled names, incorrect addresses, outdated employment details, etc.
Once you’ve done this, you need to contact the credit bureau to remove or amend this information.
This is important because the conflicting information almost always comes from credit inquiries. This happens because every time an inquiry is submitted, the information they send is then added to your report.
Once you’ve identified and resolved these discrepancies, the next step is to dispute the inquiries themselves.
You do this by sending a ‘Round 1’ letter to the three major credit bureaus, Experian, Equifax, and TransUnion. You can get a template for this letter in the letter library inside Credit Repair Cloud.
Hopefully this will get the hard inquiry removed from your credit report, and get those points back onto your credit score.
Important: Don’t dispute inquiries that are tied to open accounts or recent applications you want to keep. This could cause an automatic denial or result in your account being closed.
Frequently Asked Questions About How Long Does a Hard Inquiry Last
How many points does a hard inquiry affect credit score?
While a single hard inquiry can temporarily lower your score by 5 points or less, its impact fades within a year and responsible credit habits quickly outweigh its influence.
How many hard inquiries are OK?
Occasional hard inquiries are normal, but avoid clusters. Generally, aim for under 6 inquiries within a year to minimize score impact. Prioritize responsible credit management for long-term score strength.
How damaging is a hard inquiry?
A single hard inquiry may lower your credit score by 5 points or less. But its impact fades within a year and disappears after 2.
Why did my credit score drop 50 points after a hard inquiry?
A 50-point drop is unlikely from just a single hard inquiry. Check for other factors like multiple inquiries, recent negative activity, or errors in your credit report.
How bad are 3 hard inquiries?
Three hard inquiries within a short time can hurt your score, but responsible credit habits like on-time payments can quickly outweigh their impact.
What should you do now?
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If you're looking to handle more clients without getting bogged down by the admin, start a free 30-day trial today to see how Credit Repair Cloud makes your life easier.
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Join the Start Repairing Credit Challenge to improve your credit score and discover how to earn extra income repairing credit for others.
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Check out the Credit Repair Cloud blog to learn more about credit repair techniques and strategies
