Budgets and Money

What is a "Hard Credit Inquiry?"

When does a credit score inquiry impact your credit, and how can you minimize that impact? Read on for a discussion of the differences between 'hard' and 'soft' credit pulls and what they mean.

Budget 101 Financial Advice: What Does a Hard Credit Pull Mean?

You’re probably aware that too many inquiries into your credit report can create a negative impact on your overall FICO credit score. However, did you know that not all credit inquiries are harmful?

The fact is, credit reporting agencies discriminate between hard credit inquiries and soft credit inquiries. A soft inquiry such as pulling your own credit score, credit card solicitations, and employer credit checks generally will have no effect on your credit score. However, that’s not the case with a hard pull of your credit.

As part of our budget 101 series of articles, we’re explaining what a hard credit pull is and how it can affect your credit score.

What’s A Hard Credit Pull?

A hard credit pull (or inquiry) typically occurs when you apply for credit and have agreed to allow a company with a legitimate business reason pull and review your credit report. Hard credit inquiries are common when you apply for a home loan, refinance, or line of credit. Simply put, hard pulls indicate that you are attempting to borrow money. Therefore, numerous hard pulls that are made within a short period of time can be an indication that you are desperately looking for a loan, and may result in lower credit scores. In fact, according to LendingTree.com, one hard inquiry can knock up to five points off your credit score, which may take you six months to earn back.

Apply for Credit Sparingly

There may be many cases where a hard credit inquiry is necessary – such applying for a new home loan – and can be well worth the temporary dip in your credit score. However, a good rule of thumb would be to only apply for credit when you really need it.

For more budget 101 articles on how to improve and build your credit score, visit the Protective Learning Center.


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All Learning Center articles are general summaries that can be used when considering your financial future at various life stages. The information presented is for educational purposes and meant to supplement other information specific to your situation. It is not intended as investment advice and does not necessarily represent the opinion of Protective Life or its subsidiaries.

Neither Protective Life nor its representatives offer legal or tax advice. We encourage you to consult with your financial adviser and legal or tax adviser regarding your individual situations before making investment, social security, retirement planning, and tax‐related decisions. For information about Protective Life and its products and services, visit www.protective.com.

Budget 101

As part of our budget 101 series of informational articles, we're helping you learn more about how to build and manage your credit score. This budget 101 article looks at the impact a hard credit inquiry can have on your overall credit score. Understanding the types of inquiries that can affect your credit score will help you prevent any negative impacts on your financial future. This article highlights the importance of learning the differences between a soft credit pull and a hard credit pull so that you can protect your credit score. Follow the tips and tricks in this article to learn the basics of building your budget. For more information, visit our learning center.

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