Credit Inquiries

Credit inquiries are when someone requests a copy of your credit report from a credit reporting agency (Like Experian, TransUnion, Equifax, etc).  Inquiries impact your credit score, and are considered a new type of credit- since most inquiries are a result of you applying for new credit.  New credit is about 10%  of the calculation of your overall credit score, although might be weighted more heavily if you do not have many other credit accounts.

Access to an individual's credit report is restricted by the Federal Credit Reporting Act (FCRA) to people or companies that have obtained a permissable purpose.   Only companies and people with legitimate needs for pulling your credit report should have access- most often it is companies that you have applied for lending from, such as a credit card, insurance company, or a residence to rent. 

Some employers like to use your credit score as an indication of a person's integrity.  In order for an employer to view a credit score and report of an employee or potential hire,  however, they must be given permission.   If you give permission to an employer to view your credit report, this type of inquiry will not impact your credit score.

When a person or business obtains a copy of your credit report without permissable purpose, they can be put in jail for up to two years, and/or fined a large sum.

If you're curious who has gained access to your credit report, you can look at your report and see a list of inquiries made for the last two years.  The FICO score is impacted only by inquiries made within the last year.

Types of Credit Inquiries

Two types of credit inquiries exist:  the hard inquiry and the soft inquiry.  A hard inquiry is the classification of inquiries made to your credit report that are a result of actions you've taken.  For example, applying for a credit card, mortgage or department store credit.  The business you are applying for lending from needs to know your creditworthiness before giving you the money, and therefore you've given them permission to view your credit report by applying.  A soft inquiry is not counted in your FICO score and can include promotional inquiries- such as the businesses that check your credit report in order to give you a pre-approved offer.  Sometimes, a company that you already have business with (a credit card lender), might check your report for what they deem "administrative inquiries"- these also do not affect your credit score in any way.  Individuals can request a copy of their own credit report at any time in order to find and correct errors that might exist- and it will not affect your credit score.

Multiple Credit Inquiries

In most instances, making multiple applications for credit will hurt your score.  In some instances, however, multiple inquiries will not hurt your overall credit score- and makes it possible for individuals to shop around for the best prices and rates on large purchases, like mortgages  and car loans.  In this case, you can apply at several different places, and it is known that you are only looking for one car, or one home to purchase, and so the inquiries made during 14 days under the Classic FICO score (and 45 days under the NextGen FICO score) are not counted as individual inquiries and will only have the impact of a single inquiry on your credit score.