Understanding Hard Inquiry and Its Impact on Credit Score

By: Jaivinder Bhandari
Review By: Ankur Koul

Updated on: December 31, 2025

Your CIBIL score lets you understand your credit status. While it helps you manage your finances, it also lets the lender assess your eligibility. The credit score, altogether, reflects whether you are a risky or non-risky borrower. A higher credit score may speed up your loan application. So, when you request a new type of credit, like a credit card or loan, a "hard pull" occurs from the lender's side. Also regarded as a hard inquiry, it reviews the borrower's credit file to assess risks. Welcome to this all-encompassing post, where you will learn about hard inquiry. Also, you can understand the hard inquiry's impact on your credit score.

Introduction to Hard Inquiry - (Ins & Outs)

Suppose you apply for credit from a financial institute, bank, or credit card company. The lender asks you to review your credit history before approving your request. That's a hard inquiry, also known as a hard pull. It occurs when the lender or financial institution evaluates your creditworthiness as a borrower. Compared to a soft inquiry, which mainly involves background screening, a hard pull examines your credit history, considering the credit report.

So, each time you consult a bank or credit card company, you must review your CIBIL history beforehand. Lenders consider your CIBIL reports the best tool for assessing your past and present financial performance before they approve your loan request. The credit inquiry usually evaluates your payment history, loan and credit card amounts, etc.

Repeatedly missing your credit card payments may reduce your chances of loan approval. In such circumstances, your lender may think you will do the same thing in the future. So, they end up rejecting your loan application. Alternatively, some lenders may approve your application with a higher interest rate.

You may also read this: Factors that Decide Personal Loan Approval

Types of Inquiries on Credit Report

Your hard inquiry credit score reflects the total repayment history. At the same time, it records requests made to review the credit profile. Such requests are termed inquiries. They are categorized into two types mentioned below. Note that these inquiries appear on your report but one of them has an impact on your credit score. 

1. Hard Inquiries: A hard inquiry occurs when you apply for any of these a loan, a credit card or any financial product. These need approval, so lenders pull the credit report in order to evaluate your application. This leaves a record of the hard inquiry. Too many hard inquiries within a short time span may reduce your score. They suggest that you are taking on more debt.

2. Soft Inquiries: The next comes a soft inquiry. It happens when someone reviews the credit report for any non lending purpose. It includes background screening by employers, pre-approved credit card deals or when you check your credit score yourself. Note that soft inquiries don't impact your credit score. They are visible only to you & not lenders. Lenders can get a better understanding of how much you take loans through inquiries. A few hard inquiries spread over time are usually decent. However, multiple of them in a limited time may result in consequences. Soft inquiries, on the other hand, are harmless. They help you stay updated about your financial decisions.

Hard Inquiry vs Soft Inquiry

A hard inquiry & soft inquiry have various differences. A few of them are mentioned in the table below:

How Does Hard Inquiry Process Occur?

A lender asks for the borrower's complete credit history from a credit reporting agency through a hard inquiry. The lender may choose a credit agency based on their requirements. Some offline and online agencies offer in-depth insight into the candidate's credit score, depending on various aspects.

The lender or financial institute reports the hard credit request on the credit report from the creditor. It may reduce the borrower's hard inquiry credit score if they have multiple hard inquiries within a short time. Additionally, it results in a higher risk of rejection of their loan application.

Impact of Credit Scores in India

Credit scores in India are a significant consideration when it comes to financial transactions. The credit score lets lenders assess the risks associated with the money-lending process. Your CIBIL credit is crucial when it comes to collateral-free loans or unsecured loans. It may affect the eligibility for personal loans too. Various parameters evaluate the credit score. Some of them include the following:

• Your Payment History
• Your Owed Amount
• Your Credit History's Length
• The New Credit
• Credit Mix

Also Read: Factors that affect Credit Score

Impact of Hard Inquiry on Credit Score

The impact of hard inquiry on credit score may be negative on the borrower's credit score if it's for the short term. The hard inquiry is on the credit report for about two years. So, it impacts the overall credit for a year or two by less than five points. Getting multiple hard inquiries within a short period may indicate that the borrower has applied for various loans and could not repay them.

1. A Reduced Credit Score

The impact of any hard inquiry on the credit score isn't permanent. The credit bureau thinks the borrower is pursuing a new credit when a lender asks for a hard inquiry. That potential risk may result in a reduced credit score temporarily.

2. A (Temporary) Low Credit Status

Credit scores can identify the borrower's nature of repaying the loan and applying for new ones. However, a hard credit check temporarily reduces your credit status.

3. Adds a New Credit Component to Your Score

Hard inquiry indicate that you have applied for a new credit. It determines how often you open new accounts. In addition, it may influence a small portion of the overall score. Lenders use it to evaluate how actively you can manage your credits.

4. Loan Approval Reduced with Multiple Hard Inquiries

One hard inquiry might have a minimal impact on the CIBIL score. However, multiple hard inquiries may be risky for lenders and borrowers. For borrowers, it may affect their chances of getting their loan approved.

Lenders may think of these multiple recent inquiries as financial stress. When they see various inquiries about your credit history, they will become cautious about approving your loan.

However, there are ways to avoid hard inquiries. For instance, in auto loans or mortgages, some credit bureaus consider that you submit the application to various lenders for comparing rates.

So, they might not opt for a hard credit check to assess the score. On the other hand, applying for different credit cards along with a personal loan may be a warning sign. That indicates that you are searching for credit that you cannot afford.

What Triggers a Hard Inquiry on Your Credit Report?

Why does a hard inquiry hurt your credit? A hard inquiry occurs when you opt for a loan or mortgage formally.

Here are the things that trigger the inquiry:

a. A Personal Loan Application

b. Student Loan

c. Applying For Credit Cards

d. For Mortgage Applications

e. Applying For A Home Loan

f. Job Applications That Need Credit Checks

g. For A Rental Application At Times

When Does a Lender Opts for Hard Inquiry?

The following are the times when a lender may send a hard inquiry to assess the borrower's credit history:

1. While Applying for a Loan

Suppose you have applied for a home construction loan or a personal loan. The lender or financial institute will send a hard inquiry to understand your creditworthiness. That determines the risks involved with the lending process. Credit card issuers must understand your credit status before approving or rejecting the loan application. It helps them assess your credit usage and payment history.

2. Getting Your Mortgage Loan Approved

Did you know that applying for a mortgage loan may cause a little dip in your hard inquiry credit score? That's because lenders may run a hard inquiry on the credit. Each time the lender conducts the hard inquiry, it will appear on the credit report. So, there will be a small reduction in the score.

Note that mortgage loans come with longer repayment payments and larger amounts. So, lenders need to evaluate your financial responsibility. They assess this parameter by running a hard inquiry and get a better understanding of your creditworthiness.

3. While Applying for Increasing Your Credit Limit

Your credit card issuer might perform a hard inquiry on the hard inquiry credit score and status when you require an increase in the credit limit. However, this might lower the credit score temporarily, but it diminishes its impact over a few months or a year. When your credit limit is higher, it might be because of the hard and soft inquiries.

4. Applying for a New or Multiple Credit Cards

Applying for a new credit card requires a credit check. The issuer may assess your credit history to evaluate your credit limit and the card's terms. Alternatively, if you want to apply for multiple credit cards within a short timeframe, your application may trigger hard inquiries.

You may read this: Disadvantages of Multiple Credit Cards

What Does a Lender Think When They See a Hard Inquiry?

Lenders see that you have recently applied for the new credit when they notice a hard inquiry credit score. A hard inquiry shows lenders that you've approached another financial institution for credit. Lenders also understand that borrowers compare loan and credit card offers.

Suppose your credit history is already average or poor. Multiple hard inquiries may result in consequences. Lenders might see this as financial stress.

How Long Does a Hard Inquiry Stay On Your Credit Report?

Do hard inquiries affect credit score? A hard inquiry remains visible on the credit report for up to two years. However, this may have an impact on your credit score.

Lenders may weigh the inquiries when evaluating your applications for the new credit during the first year. After that, it carries little influence on your borrowing capacity but the record remains.

How to Minimise the Number of Hard Inquiries?

How to get hard inquiries off credit reports? Too many hard inquiries can weigh down your credit profile.

Here are the ways to reduce the number:

1. Shop Smart: Use pre-qualification tools to assess approval chances rather than applying for multiple loans or credit cards. 

2. Avoid Multiple Applications: Submitting different applications within a short time may impose risks. It can make you appear credit-hungry. You must spread out applications to keep your profile reliable.

3. Monitor Your Credit Report: Review the credit report regularly to detect outdated information or errors. Correcting inaccurate information ensures that the valid inquiries remain on the record. This keeps your profile clean while preventing unnecessary damage to your credit score.

These are the answers on how to remove hard inquiries from my credit report.

Also Read: How can Personal Loan Improve Credit Score?

How to Dispute Hard Credit Inquiries?

Hard credit inquiries can sometimes appear on your report even when you did not authorise them. The errors may harm your credit health if left unchecked.

Here are the ways to dispute a hard credit inquiry -

1. Review Your Credit Reports: Check the reports from credit bureaus. Scan for hard inquiries that you do not recognise (these mean fraudulent activity).

2. Identify Unauthorized Inquiries: Valid hard inquiries from lenders that you applied with do not get removed. However, they may be fraudulent or added by mistake if you spot entries from companies you haven't yet connected to.

3. Collect Evidence: Gather proof to back your claim, such as Emails, Letters or Account Screenshots. File a complaint & consider submitting a police report for suspected identity theft.

4. Write a Dispute Letter: Draft a formal letter addressed to the credit bureau. Clearly explain why you believe the inquiry is unauthorized and include identifying details like your name, address, and report reference number.

5. Attach Documentation: Include copies of your evidence with the dispute letter. Supporting records strengthen your case and make it easier for the bureau to verify the legitimacy of your claim.

6. Await Investigation Results: The credit bureau typically has 30 days to investigate. If the inquiry is proven unauthorized or incorrect, it will be removed, helping restore your report's accuracy and your credit score.

Wrapping up

So, you now know that a hard inquiry credit score is a critical part of the credit file. However, they should occur strategically and sparingly when comparing financial product rates. You can keep an eye on the impacts of hard inquiry on your credit and manage your score accordingly.

The best way to manage your score is by checking your report frequently. Have you seen any inquiry that you did not make earlier? The borrower can dispute these unauthorized inquiries as errors with the credit bureau. You must be attentive to ensure that hard inquiry impact your score positively.

The borrower must plan their application to avoid making multiple applications in one go. Please perform your research and apply for the credit only when you think it's necessary. With the above things in mind, you can check the credit report regularly.

Frequently Asked Questions (FAQs)

Q.1. How many points does 1 hard inquiry affect credit score?

A single hard inquiry credit score usually lowers your credit score by about five points or less. The impact is temporary & fades within a year. The impact for individuals with strong credit histories is negligible. However, multiple inquiries may raise concerns.

Q.2. Do all hard inquiries affect credit scores?

All hard inquiries appear on your credit report. However, the effect is typically small. Credit scoring models may treat them as a single inquiry if you are rate-shopping for mortgages or any other loans (student or auto) within a short period.

Q.3. How bad are 3 hard inquiries?

Three hard inquiries within a year might reduce your credit score slightly more than one, but the effect is still moderate. Lenders could view multiple inquiries as higher risk, especially if your overall credit history is limited. 

Q.4. How long do hard inquiries stay on your credit report?

The hard inquiry credit score remains for up to two years. However, their impact on your credit score generally lasts only one year. They are visible to lenders but usually carry minimal or no weight in determining your creditworthiness during the second year.

Q.5. How can I minimize the impact of hard inquiries on my credit score?

Wondering how to improve credit score after hard inquiry? You can apply for new credit only when necessary to reduce the impact. Use pre qualification tools for estimates without triggering hard checks. Avoid submitting multiple applications in a short span. Do monitor your credit report regularly. 

Q.6. How can I check my credit report for hard inquiries?

You can check your credit report for free once a year through major bureaus. Look under the “inquiries” section to identify lenders who accessed your file.

By: Jaivinder Bhandari

Jaivinder Bhandari is a Senior SEO Manager at lendingplate with a passion for writing on a wide range of financial topics, including personal loans, credit and debit cards, investments, money management, and practical financial tips to help people improve their financial well-being. Linkedin Profile