1 min read Credit Dictionary

Hard Inquiries



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Hard Inquiries are made by credit grantors when a consumer applies for a credit product.  The creditor requests a credit report for review from one of the three major reporting agencies, Equifax, Experian and TransUnion to evaluate creditworthiness.  This request generates an updated report and, if requested, a credit score.  This action is considered a hard inquiry. 

A hard inquiry remains on a consumer credit file for 24 months, but for scoring purposes, only inquiries in the past 12 months are considered.  The credit reporting agencies, along with Fair Isaac Corporation advise that the credit gathering system understands and accounts for multiple credit applications due to rate shopping.  Therefore, a consumer may apply for preapprovals on items such as loans and mortgages, at various lenders within 30 days, and it will reflect as one credit inquiry for the purpose of credit scoring (FICO score).  This allows the consumer to compare rates, terms and conditions offered at different institutions. 

It should be noted that as each inquiry is made, the name of the financial institution will appear on a consumer’s credit report.  Therefore, as a consumer travels from lender to lender, the creditor will be able to see which companies have processed an application.  This can be beneficial for the consumer wishing to negotiate a better offer, as the creditor will be aware the consumer is shopping.