Credit Checks and Inquiries

What a Credit Inquiry Is

When a business or individual requests your credit report from a national credit reporting company, that access is often recorded as an inquiry. The three national credit reporting companies—TransUnion, Equifax, and Experian—maintain separate files, so an inquiry may appear on one, two, or all three reports depending on which company was asked for the report.

Inquiries are part of the information in your credit file. They usually include the name of the requester, the date of the access, and the type of inquiry. The Fair Credit Reporting Act (FCRA) governs how credit reporting companies handle this information and what rights consumers have.

Hard Inquiries Versus Soft Inquiries

Hard inquiries usually result from an application for credit, such as a credit card, loan, or mortgage. When you apply, you typically authorize the lender to obtain your credit report. Hard inquiries may be shared with other lenders and are often considered by scoring models.

Soft inquiries occur for reasons unrelated to a new credit application. Examples include checking your own credit, account reviews by existing lenders, pre-approved credit offers, insurance underwriting, and some employment checks. Soft inquiries are generally not shared with lenders and are not considered by scoring models.

• Hard inquiry: new credit application
• Soft inquiry: account review, pre-screening, or self-check
• Soft inquiries are not typically visible to lenders
• Hard inquiries may be visible to lenders and scoring models

Who May Check Your Credit

The FCRA permits access to credit reports for specific purposes, known as permissible purposes. Lenders may check your credit when you apply for credit. Landlords may check when you apply to rent housing. Insurers may check for underwriting. Employers may check with your written consent. Utilities may check before opening an account. Debt collectors may check to locate you or collect a debt. Government agencies may check for certain enforcement or licensing purposes.

You also have the right to request your own credit reports. These self-checks are soft inquiries. The FCRA requires credit reporting companies to provide you with a free report from each nationwide company once every twelve months through the centralized source.

Permission and Consent

For hard inquiries, you generally give permission when you apply for credit. The application includes terms that authorize the lender to obtain your report. For employment purposes, the FCRA requires your written consent before an employer or potential employer may obtain your credit report.

Soft inquiries may occur without your direct request, but only for permissible purposes. For example, a lender with which you have an existing account may review your credit as part of account monitoring. Credit reporting companies may also include you in pre-screening lists for firm offers of credit, unless you opt out. You can opt out of pre-screening by contacting the centralized notification system.

Residents of California have additional rights under the California Consumer Privacy Act (CCPA) and the California Privacy Rights Act (CPRA), including rights to know, delete, and opt out of certain sharing of personal information. These state laws work alongside federal law.

How Inquiries Are Recorded and Reported

Credit reporting companies record inquiries in your credit file. Hard inquiries typically remain on your credit report for about two years. Soft inquiries may appear on a report you request, but they are usually not included in reports provided to lenders. Scoring models may consider the number and recency of hard inquiries, though the exact treatment varies by model.

Some scoring models group inquiries from rate shopping for mortgages, auto loans, or student loans that occur within a short period. This grouping is often called deduplication. The length of the window varies by scoring model. Inquiries are only one factor among many in a credit scoring model, and their influence depends on the model and the rest of your credit file.

Reviewing Inquiries and Your Rights

You can review inquiries by obtaining your credit reports from the nationwide credit reporting companies. If you see an inquiry you do not recognize, it may indicate that someone accessed your report without authorization. Under the FCRA, you have the right to dispute inaccurate or unauthorized information with the credit reporting company.

If an inquiry resulted from identity theft, you may place a fraud alert or security freeze on your credit reports. The FCRA provides additional rights for identity theft victims, including the right to obtain a copy of records related to fraudulent transactions. You can also file a complaint with the Consumer Financial Protection Bureau or the Federal Trade Commission.

Inquiries are records of access, not statements about your creditworthiness. Understanding how they are recorded and reported helps you exercise your rights under federal and state law.