Monday, November 1, 2010

Can a Credit Inquiry Affect my FICO Score?

There are many questions and some confusion surrounding this topic. A credit inquiry is when a consumer's credit is reviewed by a lender, creditor, or by the consumer personally. Inquiries remain on the credit report for two years. Some types of inquiries will hurt credit scores, while others won't affect them at all. This seems to be where the most confusion lies. When a third party pulls credit with the consumer's authorization this inquiry will hurt the credit score. This is called a "hard pull".

On the other hand, if a creditor pulls credit without authorization (for example, to consider a consumer for a promotional credit card offer), it is considered a "soft pull." A soft pull is an inquiry that does not negatively impact the credit score. But suppose the consumer applies for the promotional credit card? Then the creditor will undertake a more in-depth review, this time with authorization. This will be considered a hard pull, which will reduce the score.
To understand inquiries we must look at scores as well. We will take the FICO Score as an example. FICO is used by mortgage lenders when deciding a consumer's risk level. Based on the risk level, lenders decide what interest rate is appropriate for a loan or if it will be approved at all. When lenders pull FICO it is considered a hard inquiry and will negatively affect the credit score. FICO also sells scores directly to the general public online at Ordering your score and credit report directly from this site will not affect your score. In fact, even if a consumer pulled his credit and scores 80 times in one day at, all 80 pulls would be considered "soft" and would not affect the score.

Consumers can also obtain their credit directly at other online sites, such as,,, etc. without hurting their credit scores.