Hard inquiries, soft pulls, and who's allowed to look
Permissible purpose under the FCRA, what inquiries really cost you, and removing unauthorized ones.
§ 1Two kinds of looks at your file
A soft inquiry happens when your report is checked for any reason other than a credit application you initiated: you checking your own score, a card issuer reviewing an existing account, an employer screening (with your written permission), or a company pre-approving you for an offer. Soft pulls are visible only to you and never affect your score. Check your own credit as often as you like.
A hard inquiry happens when a lender pulls your file because you applied for credit — a card, a loan, a mortgage, sometimes an apartment or a phone plan. Hard inquiries are visible to other lenders and factor into the "new credit" slice of your score.
§ 2What a hard inquiry actually costs
For most files, one hard inquiry costs fewer than 10 points, and the effect fades over months. Inquiries remain visible on your report for two years, but FICO models ignore them entirely after 12 months. One application is noise; six applications in three months is a pattern that scoring models read as risk.
Rate shopping is protected. When you compare mortgage, auto, or student loan offers, FICO counts every inquiry of that type within the shopping window as a single inquiry — the window is 45 days in current models (14 days in some older ones still in use). Shop hard for two weeks and you pay the score cost of one application, not seven. Note the exception: credit card applications are never deduplicated.
§ 3Permissible purpose: who is allowed to pull your file
Under §604 of the Fair Credit Reporting Act, your report may only be accessed with a permissible purpose: a credit application you made, an account review by an existing creditor, collection of a debt you owe, insurance underwriting, employment screening with your consent, a court order, or your own written instruction. Curiosity is not on the list. Pulling a report without permissible purpose exposes the puller to statutory damages.
This is the legal hook for removing inquiries you never authorized. If a lender you have never dealt with shows a hard pull, you can dispute it with the bureau reporting it and demand the source establish its permissible purpose. If none exists, it comes off.
§ 4Unknown inquiries and what they can signal
An inquiry you don't recognize has three common explanations: a company operating under a parent or partner name you didn't expect (the financing arm of a store, for example), a broker who shopped your application to multiple lenders, or — the serious one — someone applying for credit in your name.
If you cannot trace an inquiry to anything you signed, treat it as a potential identity theft signal: dispute the inquiry, and consider placing a fraud alert or a security freeze with all three bureaus. A freeze is free, blocks new hard pulls entirely until you lift it, and is the strongest protection available. We cover freezes in more depth elsewhere in the curriculum; the short version is that anyone not actively shopping for credit loses nothing by freezing.
Want this applied to your actual reports?
The free review is Unit 01 of the same playbook: we pull all three bureau reports and show you exactly what’s disputable — before you decide anything.
This lesson is general education, not legal, tax, or financial advice for your specific situation. Laws vary by state and change over time; verify current rules or consult a qualified professional before acting.