Hard Inquiry

What is Hard Inquiry?

When a borrower requests a detailed Credit Report consisting of the complete credit history and records, the credit bureau deducts some points from their credit scores. Usually, borrowers request a full credit report when they are having a hard time getting their loan request approved. Sometimes, banks and credit unions ask borrowers to present their full credit reports. For background checks and loan approvals, borrowers use hard inquiry. The process of requesting a full credit report that might deduct their Credit Score is known as a hard inquiry meaning.

Commonly known as the hard pull, this type of information is needed when you need a loan from a financial institution or a private lender. You may also need it to show your creditworthiness to the landowner. Basically, a borrower can request two types of inquiries – soft and hard. As the name suggests, soft inquiries involve basic credit-related information. As these reports can be easily arranged, soft inquiries have no impact on the borrower’s credit reports. Simply put, soft inquiries do not lower your credit score. Common examples of soft inquiries are the request for loan information, a free credit card report, pre-qualification approvals, and so on.

An Overview of the Hard Inquiry

Generally, a hard credit score refers to the request of full credit history and credit score of a person from a reputable credit bureau. Now, this information can only be supplied by the credit-reporting company. Most people choose Equifax and Experian for requesting a full credit report. Others opt for alternative Credit Bureaus that claim to use advanced methods to calculate the credit score.

It is easy to ask the credit bureau to send the credit history with a detailed list of all the past transactions. However, all kinds of hard inquiries deduct your credit score. This inquiry will be displayed on your credit report for at least 2 years. That’s why borrowers do not request hard inquiries. It has a negative impact on your credit score. The more you request hard inquiry, the lower your credit score will be. People who have multiple hard inquiries reported on their credit reports are considered risky. As a result, lenders are likely to charge a high-interest rate to these borrowers.

When do you Need Hard Inquiry?

Not even the private lenders are willing to lend money to random borrowers these days. In order to get your loan request sanctioned, you need to submit your Income statement, credit reports, and credit score to the Bank. Many banks and credit unions ask borrowers to submit a detailed credit report, especially if the borrower requests a significant amount of loans. To verify their credibility and past credit records, banks ask them to have a hard inquiry.

That’s when the borrower needs to contact the credit bureau and request a hard inquiry. While it increases your chances of getting the loan sanctioned, it can deduct points from your credit score. Requesting a full credit report once a year will do no damage to your credit score.