What is a hard inquiry and how does it affect my credit score?

A hard inquiry, often referred to as a hard pull, occurs when a financial institution or lender reviews your credit report as part of their decision-making process when you apply for credit. This can happen when you apply for a loan, a credit card, or even a mortgage. Unlike a soft inquiry, which does not impact your credit score, a hard inquiry can have a noticeable effect. When a hard inquiry is made, it typically results in a temporary decrease in your credit score. This reduction is usually minor, ranging from a few points to around five points, depending on your overall credit profile and history. Hard inquiries usually remain on your credit report for two years; however, their impact on your score diminishes over time. Lenders may view too many hard inquiries within a short period as a sign that you are experiencing financial distress or taking on too much debt. It is advisable to limit the number of credit applications you undertake in a short timeframe to maintain a healthy credit profile. If you would like more information about how hard inquiries may affect your credit score specifically, you might consider looking at the relevant sections on the UK Credit Info website for detailed guidance.