Can You Talk About Inquiries? What Are Inquiries?

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An inquiry is simply a record that someone has looked at your credit report. There are two types of inquiries: soft and hard.

Soft Inquiries

Soft inquiries are inquiries that are only shown to the consumer on their personal credit report. They do not affect credit scores in any way. They include reviews of your credit history by existing creditors, such as collection agencies or lenders, getting your own report, employment purposes, insurance purposes and preapproved credit offers, among others.

Soft inquiries on your credit report are only visible to you, except: (1) insurance companies may be able to see other insurance company inquiries; and (2) inquiries by debt settlement companies you have authorized to access your report may be shared with your current creditors. These inquiries have no effect on your credit score as they are never considered as a factor in credit scoring models. Soft inquiries are not disputable but are available for reference.

If the consumer did not apply for credit or other services, a soft inquiry will be added to the credit report. It's not uncommon to see a lot of soft inquiries in a person's credit report.

Hard Inquiries

Hard inquiries are the result of a person's application for credit or other services.

Hard inquiries can affect credit scores because they represent potential new debt that doesn't yet appear in the credit report as an account. However, the effect they have on scores is minimal and short term.

Typically, any impact drops off dramatically after a month or two because there will either be a new account entry, which then becomes the key risk indicator, or there is no new account, which means the inquiry doesn't represent any risk.

All inquiries remain two years from the date of the inquiry. Generally, you cannot have them removed before that time unless they are the result of fraud.

Keep in mind, hard inquiries alone will never be the sole reason that an application is declined. There will always be something more serious that causes the inquiries to become a deciding factor.

When a person receives a credit score they also should get a list of the risk factors that most affected the score. There are generally four and sometimes five factors, and they are usually listed in order of importance. Inquiries are referred to as the "fifth factor" because they always are the least important.

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Scoped on: 12/8/2016