What is a Hard Inquiry?
A hard inquiry is a type of request for credit information that seeks a full credit report from a borrower and deducts points from a credit score for inquiring from a borrower. Such kinds of inquiries are used for loan approvals and history inspections.
Understanding Hard Inquiry
The word for a hard inquiry is a strong pull. For a credit judgment, a hard pull is necessary, and it can also be used in other forms of background checks, such as jobs or rental leases.
There are usually two forms of credit inquiries that an individual may apply for: a hard inquiry and a soft inquiry. Soft inquiries follow slightly different protocols and include less information than hard inquiry. Soft inquiries are not reported on a credit report from a borrower and have no impact on its credit score.
Hard Inquiry Process
A hard inquiry asks a credit reporting agency for a borrower's full credit history and credit score. Entities have the right to choose the best-suited credit reporting agency and credit report type.
Many companies would depend on traditional credit offices, such as Experian, Transunion, and Equifax, for example. Other entities may use alternative bureaus, which can provide deeper analysis or credit scoring based on alternative methodologies.
Any form of hard credit request will be reported on a credit report from a creditor triggering a minor reduction in credit score. Strong enquiries linger for two years on a borrower's credit score.
Borrowers with lots of hard inquiries in a short period of time will see a more dramatic reduction to their credit score and will also be deemed a higher risk to lenders.
