Hard Inquiry

A type of credit report check that may lower an individual’s credit score. A hard inquiry occurs when an individual applies for any type of credit, such as a mortgage, credit card or auto loan. The reason a hard inquiry may lower an individual’s credit score is because someone who has recently applied for new credit is seen as a potentially riskier borrower.

Also called a "hard pull."

The application for new credit indicates either that the individual may need credit as a result of a financial setback, or that the acquisition of new debt by the borrower makes him or her a higher lending risk. However, credit scoring formulas typically take into account that an individual might be shopping around for the best rate, so when multiple inquiries are made for the same type of credit in a short period, such as multiple mortgage applications, the individual’s credit score is not dinged repeatedly.

The other type of credit report inquiry is called a soft inquiry, or soft pull. Soft pulls include inquiries such as an individual checking her own credit report, employer checks of job applicants’ credit reports and credit card companies’ screening of applicants for preapproved credit offers. This type of credit report check does not affect an individual’s credit score because it is for informational purposes only.