A credit pull is also known as a credit inquiry, and it’s what it sounds like–an inquiry into your credit. In other words, a request from a person or business entity to check your credit.
These credit pulls are split up into two categories: a hard credit pull and a soft credit pull. Knowing what a hard credit pull is and when it occurs can help you protect your credit score, so read on to understand the difference.
A hard credit inquiry occurs when you apply for credit. When you apply for a credit card, line of credit, or loan, the lender runs a hard pull on your credit report to determine your creditworthiness. This action then shows up on your credit report as a “credit inquiry” and can affect your credit. It’s important to note that a business can only run a hard pull on your credit report if you give them permission to do so.
Soft credit inquiries occur when your credit report is pulled for reasons other than a potential lender reviewing your credit history because you completed an application for credit. The most common types of soft inquiries are:
These soft credit pulls do not show up on your credit report, nor do they impact your credit score.
While hard credit inquiries do impact your credit score, the effect is usually minimal. A couple of hard credit pulls may only lower your score a few points, and the drop is temporary. You’ll see your score start to recover after 90 days, and after 12 months, a hard inquiry will no longer affect your credit score. After 2 years, hard inquiries fall off your credit report entirely.
However, a series of many hard pulls on your credit report can cause a more substantial drop in your credit score. “New credit” makes up 10% of your FICO Score, and lots of inquiries and new accounts are considered negative because they signal to potential lenders that you could be in financial trouble. For this reason, it’s wise to limit your credit applications by only applying for credit you qualify for and never applying for too many loans or credit cards in a short time.
Under the “Inquiries” section of your credit report, you’ll be able to see a list of hard pulls, when they were performed, and who performed them.
If an inquiry on your credit report is legitimate, such as a hard credit pull performed by a lender with whom you applied for a loan, you probably can’t get it removed. You’ll just have to wait until it falls off of your report 2 years later.
However, you might notice inquiries on your credit report that you didn’t authorize. If this is the case, you can dispute the inquiry online while reviewing your credit report. It’s also wise to write a letter to the credit bureau asking them to remove the error from your credit report.
You should check your credit report for errors regularly. In the end, only you are responsible for protecting and improving your credit score.