Business Finance

How Long Do Hard Inquiries Affect Your Credit Score?

Jul 30, 2021 • 4 min read
Man holding phone typing in credit card information
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      When you apply for small business loans, lines of credit, and other sources of funding, potential lenders might conduct a credit check. These financial institutions use credit scores to evaluate the level of risk of working with a business or individual.

      In theory, the higher your credit score, the better your financial reputation and the more likely you are to pay back your debt.

      However, not all credit inquiries carry the same weight. Use this guide to understand how long hard inquiries stay on your credit report and what this means for your business.

      What Is a Soft vs. Hard Credit Inquiry?

      There are 2 different ways for an institution to check your credit: a soft pull and a hard pull. Soft inquiries can be done without your permission and typically won’t affect your credit.

      For example, a credit card company might conduct a soft pull on your credit check to see if you qualify for certain credit cards. An employer might complete a soft pull if you are applying for an accounting position.

      In most cases, you might not realize that your credit score was pulled unless the organization that pulls it lets you know.

      You typically need to authorize a hard credit inquiry because the hard pull can impact your credit score. Your score may drop a few points, and the hard pull will be recorded in your financial history.

      Hard credit inquiries are often done when you plan to take out a loan or mortgage. They will also be completed by credit card companies if you decide to apply for the cards they offer.

      A hard credit inquiry isn’t necessarily a bad thing—and might not affect your credit at all. For example, if you seek out financing to buy a car, other lenders won’t see that hard pull as an issue. However, if you have multiple hard queries over a short period, it could serve as a warning sign to lenders that you are trying to accumulate a large sum of money or that your applications aren’t getting approved.

      How Many Hard Inquiries Is Too Many?

      There is no magic number for good or bad hard inquiries. In fact, the level of concern—and the impact on your credit score—will depend on your financial situation and reasons for having the reports pulled.

      If you already have good credit, a few hard inquiries likely won’t affect your score. It may drop by a few points and that’s it. However, if you have multiple hard inquiries over a short period, lenders may elevate your risk level. This shows that you might have high levels of debt or multiple debt sources to pay off each month.

      However, there are exceptions to this hard inquiry rule. For example, if you are shopping around for a mortgage or loan, you might have multiple hard inquiries from lenders. Eventually, your lender might ask you to explain these hard inquiries and sign-off that you consented to them in order to help the underwriting process.

      How Long Does a Hard Inquiry Affect Your Credit Score?

      The Fair Credit Reporting Act requires credit bureaus to disclose all inquiries on your account from the last 2 years. This means that any hard inquiry within that period will show up.

      However, your credit score is constantly changing. A large bill one month or missed credit card payment in the next can affect your score as well. While a hard inquiry will stay on your credit reports for 2 years, other factors related to your financial health will draw your score up or down.

      Does Your Credit Score Go up When a Hard Inquiry Drops Off?

      If you recently passed the 2-year mark from the last time you had a hard inquiry on your credit (or multiple hard inquiries), you might think that your credit score should increase as a result. However, this might not be the case.

      First, a hard inquiry will only drop your score by a few points—typically less than 5. Even if your score increases, you might not notice much of a difference.

      Next, credit scores are created through a variety of factors. It’s likely that your credit score already rebounded a few months after your hard inquiry anyway. If you continue to pay off your loans and practice good financial health, your credit score will overcome any hard inquiries.

      Finally, most credit modeling companies only look at the past 12 months of your history. This means they might not take your older hard inquiries into consideration when assigning you a credit rating.

      A hard credit inquiry is meant to provide clarity into your financial history and behavior. It’s not meant to punish your credit score. This is why a hard inquiry dropping off might not have the impact you expect.

      Can You Remove Inquiries From Your Credit Report?

      You cannot remove a hard inquiry from your credit score unless it is the result of fraud. For example, if someone tries to use your Social Security number to apply for a car loan, then the hard pull on your credit is fraudulent.

      You cannot request the removal of hard inquiries purely because you don’t want them on your records. If you are worried that these inquiries might affect your ability to get funding, prepare documents that address these concerns.

      For example, if you have multiple hard inquiries by mortgage companies, you can show your current mortgage agreement as proof that you were just shopping around for a home loan.

      Find a Lender to Secure the Funding You Need

      If you are worried about lenders pulling your credit and affecting your score, let Lendio help. We can help you find willing lenders who offer favorable rates so you don’t have to meet with multiple banks or credit companies. By starting your relationship with the right bank, you can limit the number of hard inquiries that come with shopping around for loans.

      Visit our online loan center to learn about your business financing opportunities.

      About the author
      Derek Miller

      Derek Miller is the CMO of Smack Apparel, the content guru at, the co-founder of Lofty Llama, and a marketing consultant for small businesses. He specializes in entrepreneurship, small business, and digital marketing, and his work has been featured in sites like Entrepreneur, GoDaddy,, and StartupCamp.

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