A new inquiry on your credit report is simply a record that someone looked at your credit file. If you applied for a loan or credit card, it’s a hard inquiry, and it may drop your score by a few points and sit on your report for two years. If it came from a pre-approval mailing, your own credit check, or an existing creditor reviewing your account, it’s a soft inquiry and doesn’t affect your score at all. The one scenario that calls for action is an inquiry you don’t recognize.
Hard Inquiries and Soft Inquiries
The dividing line is whether you applied for credit. A hard inquiry gets logged when you formally apply for something that involves borrowing: a mortgage, auto loan, credit card, personal loan, or a business credit card where the issuer reviews your personal file. The lender pulls your full report to decide whether to approve you.
Soft inquiries cover almost everything else:
- Checking your own credit through a monitoring service.
- Pre-approval screenings for promotional credit card offers you didn’t ask for.
- An existing creditor reviewing your file to adjust a credit limit or terms.
- Employers or landlords screening your credit as part of an application process.
- Insurers reviewing your credit profile when pricing a policy.
Soft inquiries only appear on the version of the report you see. Lenders reviewing your file for a credit decision don’t see them, and they never factor into your score.1myFICO. Does Checking Your Credit Score Lower It
How Much a Hard Inquiry Affects Your Score
A single hard inquiry usually costs fewer than five points.1myFICO. Does Checking Your Credit Score Lower It People with short credit histories or few accounts tend to feel it more than someone with a long, established file. The impact fades either way. FICO scores only factor in inquiries from the past 12 months, even though the entry itself stays on your report for a full 24 months before the bureaus automatically remove it.2Experian. How Long Do Hard Inquiries Stay on Your Credit Report
VantageScore works a little differently. It can consider hard inquiries for the full two years they appear, though the effect still diminishes over the first few months.3Experian. How Many Hard Inquiries Is Too Many One inquiry on its own isn’t something to lose sleep over. Several piling up in a short period outside of rate shopping is where lenders start reading the pattern as financial stress.
Rate Shopping: Why Several Inquiries May Count as One
If you applied with multiple lenders in a short window to compare offers on the same loan, scoring models are built to protect you. Five mortgage applications in a week are treated as a single event rather than five separate hits.
The window depends on the model. Newer FICO versions give you 45 days to shop for a mortgage, auto loan, or student loan, and all inquiries for that same loan type within those 45 days count as one. Older FICO versions use a 14-day window.4myFICO. The Timing of Hard Credit Inquiries: When and Why They Matter VantageScore 4.0 uses 14 days but groups inquiries regardless of the loan type.5VantageScore Solutions, LLC. Lender FAQs
The practical rule: once you start applying for a particular loan, submit all your applications within a two-week stretch. That keeps you inside both models’ consolidation windows.6Consumer Financial Protection Bureau. How Will Shopping for an Auto Loan Affect My Credit
Credit cards are the exception under FICO. The rate-shopping logic covers mortgages, auto loans, and student loans, but credit card applications are generally counted individually because each card is treated as a distinct product rather than a competing offer for the same debt.7TransUnion. How Rate Shopping Can Impact Your Credit Score If you’re planning to apply for several cards, space them out over months rather than days.
Who Is Allowed to Pull Your Report
Not just anyone can look at your file. The Fair Credit Reporting Act requires every entity that requests your report to have a permissible purpose tied to a transaction you’re part of.8Office of the Law Revision Counsel. 15 USC 1681b – Permissible Purposes of Consumer Reports The common categories:
- Banks, credit unions, and credit card issuers reviewing an application.
- Property managers or landlords evaluating a rental application.
- Insurers underwriting or pricing a policy.
- Employers checking your credit as part of a hiring or promotion decision, only with your written consent.
- Utility providers deciding whether to require a deposit.
One scenario that catches people off guard: applying for a business credit card almost always triggers a hard inquiry on your personal credit report. Most issuers evaluate the owner’s personal creditworthiness to make the approval decision, especially for newer businesses without an established commercial file.
You also have the right to know who has accessed your file. Credit bureaus must disclose the identity of anyone who pulled your report for credit or insurance purposes in the past year, or for employment purposes in the past two years. The disclosure includes the company’s name and, on request, address and phone number.9Office of the Law Revision Counsel. 15 USC 1681g – Disclosures to Consumers You can pull your own report for free every week from all three bureaus through AnnualCreditReport.com, and Equifax is offering six additional free reports per year through 2026.10Consumer Advice (FTC). Free Credit Reports
What to Do About an Inquiry You Don’t Recognize
Before assuming fraud, check whether the creditor name on the inquiry belongs to a parent company or trade name of someone you actually applied with. A quick search of the name usually clears it up. If it doesn’t, treat it seriously.
Contact the lender listed on the inquiry directly. The contact information should appear on your report alongside the entry. Ask them to confirm whether an application was submitted in your name. If they can’t verify it or confirm it was submitted in error, ask them to notify the credit bureaus to remove the inquiry.11TransUnion. What to Do if You Don’t Recognize an Inquiry on Your Credit Report
If it turns out to be fraudulent, report the identity theft at IdentityTheft.gov. The FTC will generate a personal recovery plan and an Identity Theft Report you can use when you dispute the inquiry with the bureaus.
Filing the Dispute
You can dispute an unauthorized inquiry by mail, online, or by phone with each bureau that shows it. A written dispute should include your full name and contact information, the specific inquiry you’re challenging and why it’s unauthorized, a copy of the relevant section of your report with the entry highlighted, and copies of supporting documents such as the FTC Identity Theft Report. Send it by certified mail with a return receipt.12Consumer Financial Protection Bureau. How Do I Dispute an Error on My Credit Report
Once the bureau receives your dispute, it generally has 30 days to investigate and five business days after completing the investigation to notify you of the results. If you filed the dispute after requesting your free annual credit report, the window extends to 45 days.13Consumer Financial Protection Bureau. How Long Does It Take to Repair an Error on a Credit Report
Fraud Alerts and Credit Freezes
If an unauthorized inquiry suggests someone is actively trying to open accounts in your name, two tools can shut it down, and you can use both at the same time.
A fraud alert tells lenders to take extra steps to verify your identity before approving new credit, usually by contacting you directly. A standard fraud alert lasts one year and can be renewed. Lenders can still see your report while an alert is active.14Consumer Advice (FTC). Credit Freezes and Fraud Alerts
A credit freeze goes further. It blocks anyone from accessing your report at all until you lift it, which means no one can open a new account in your name, including you. When you need to apply for credit yourself, you lift the freeze temporarily with a PIN or password and put it back afterward. Both fraud alerts and credit freezes are free to place and lift, and neither affects your credit score.14Consumer Advice (FTC). Credit Freezes and Fraud Alerts
For most people dealing with a suspicious inquiry, a freeze is the stronger move. A fraud alert asks lenders to verify your identity, but compliance isn’t guaranteed. A freeze makes verification unnecessary by cutting off access to the report entirely.