Any inquiry made on your credit status is classified as ‘hard’ when you shop for mortgage loans, student loans, auto loans, and new credit cards. Hard inquiries can stay on your credit report for 24 months (2 years). However, after 12 months, it will no longer affect your credit score.

Perhaps, you are interested in shopping for additional loans, home or car ownership, mortgage rates, or you’d like to tackle debt, it’s critical to understand how long hard inquiries stay on your credit report and the potential effects it may have on your financial wellbeing.

Therefore, we provided an in-depth analysis in this article on the best approach of making hard inquiries as well as keeping your credit score healthy.

So let’s keep the ball rolling.

Hard vs. Soft Credit Inquiry

A credit inquiry is indicated in your financial records when you grant an institution or a corporate entity the access to your credit report, and the two major types are classified as hard and soft credit inquiries.

Basically, hard inquiries are those done by financial institutions, lenders and approved credit issuers after the completion of a credit application by a borrower. By conducting inquiries on your financial status, creditors can access details of your credit history and credit score thereby predicting your behavior as a borrower, and it helps them to make an informed decision on each application.

Below are some examples of hard inquiries.

  • Lease application or car loans
  • Application for mortgage loans
  • Credit card application
  • Student loan, personal or business loan applications

Soft Credit Inquiries

Checking your credit report or score online can be categorized as a soft credit inquiry and they are neglected by scoring models like VantageScore and FICO. Soft inquiries do not have any impact on your credit score.

The noteworthy point is that any report you can pull from an online source is not your FICO or VantageScore – they are not the same score a lender uses to evaluate and make decisions about your loan application. Credit companies can use the soft inquiry to determine your pre-qualification for a loan in addition to other underwriting purposes.

For clarification, we’ve provided some examples of soft inquiries below:

  • Inquiries by auto insurance companies
  • Personal online credit report search
  • Cable, utility, new phone carrier and internet provider inquiries
  • Pre-qualification inquiries for various types of loans
  • Employer credit or background checks

More so, we’d like to shed light on the employer background checks because some resource persons do believe that it belongs to the category of hard inquiries, but that assertion is wrong.

The fact is, Credit or background checks for employment purposes do not have a negative impact on your credit score, and it doesn’t appear in your records. Employers request such background checks for job seekers in the financial sector because it is believed they are likely to handle sensitive financial information of the public.

Do Hard Inquiries Drop Your Credit Score?

A single hard inquiry can drop your credit score by 5 points or above. This depends on the number of times you made the inquiries as different credit scoring models have defined periods allowed for hard inquiries.

The impact of hard inquiry will be insignificant for those with established credit profiles and different types of credit accounts. Approximately, inquiries and new credit accounts make up to 10% of your credit score, but that will increase when you shop heavily for loans within a short period.

Let’s do a little comparison on the popular consumer credit scoring models to show you the approved amount of time you need to shop for loans.


Provides 14-day window for mortgage loans, car loans, and credit card shopping and considers all inquiries made within that period as a single hard inquiry.

While the older FICO SCORE versions allow the same 14-day period for hard inquiries.

Putting the above into perspective, you need to shop for credits within the 14-day period allowed by the VantageScore model. It is advisable to inquire about the scoring model a lender uses so you could shop as fast as possible within the permitted period.

Rate Shopping

Rate shopping gives you the advantage of getting the lowest rates for mortgage, auto or student loan applications. It makes financial sense if you can get the best rates without hurting your credit score, then below is the solution.

A period of 14-30 days is giving by the popular scoring models like VantageScore and FICO. This grace period is for borrowers to make multiple hard inquiries without it affecting their credit score. In other words, that is your ‘rate shopping’ period.

As a rule of thumb, you need to be ready for the purchase before allowing lenders to pull your credits. As long as the inquiries are within the rate shopping window, they will be summarized as a single inquiry, and that will not have a negative impact on your credit score.

Disputing Inquiries on Your Credit Report

According to The Federal Trade Commission, it falls within your right as a consumer to periodically review your credit report and submit a dispute for wrong information or possible identity fraud.

Details from a study conducted by the commission in 2012 showed that one in five consumers had an error that was corrected by a credit reporting agency (CRA). Therefore, you need to raise the alarm immediately you notice inaccurate information in your credit report since it will have a negative impact on your overall credit score.

Disputing inquiries in your credit report is not difficult; you can start by calling the customer service of the credit bureaus and providing the required information. You can also write a detailed email to the bureau and copy the Federal Trade Commission.

It is the responsibility of the credit bureau to contact the creditor with your claims, and within 30 days, the dispute will be resolved.

Final Words

It is a fact that you’ll be penalized by both VantageScore and FICO scoring models if you have multiple hard inquiries done outside the rate shopping periods. Such inquiries can negatively affect your credit score, and it stays for 24 months.

Additionally, inaccurate information in your credit report can increase your insurance premiums and interest rates as well as lead to disqualification of your mortgage or car loan applications.

Interestingly, in this article, we recommended the right steps to take if you have issues, but you can contact us for further clarifications and expert financial advice.

Remember, no one is perfect when it comes to personal finance issues. Endeavor to share your experience in the comment session so we all could learn.

About the Author:
John Blakely has had a passion for all things personal finance for over a decade. He is a firm believer in having big financial dreams and executing on a plan to realize them. He is an Education Ambassador for ScoreSense where you can find more of his writings.