I know many people worry about credit inquiries on their reports. It makes sense - they can affect your score and future applications. But not every inquiry impacts you the same way. Let me walk you through what they are and when they actually matter.

What is a Credit Inquiry?

When someone reviews your credit history, that's a credit inquiry. There are two different types, and understanding the difference will help you manage your credit better.

Hard Inquiries

Hard inquiries happen when you apply for credit. Lenders are legally required to report these applications on your credit report so other lenders can see your recent credit activity. This helps them make informed decisions about your applications.

You'll see these when:

• You apply for a new credit card
• You're getting a loan (personal, car, or mortgage)
• You ask for a credit limit increase
• You apply for certain rental properties

What this means for you:

• Your credit score will drop slightly
• The impact lessens after a year
• They stay on your report for two years
• Getting several in a short time might concern lenders

Soft Inquiries

Soft inquiries won't affect your credit score at all. These happen more often than you might think.

These occur when:

• You look at your own credit
• Companies send pre-qualified offers
• Your current lenders review your account
• Employers run background checks

What you need to know:

• These don't affect your score
• Only you can see them on reports
• They can happen without your knowledge
• There's no limit to how many you can have

Managing Your Inquiries

If you're shopping for a major loan, you have some flexibility. Credit scoring models give you a 45-day window where multiple inquiries for the same type of loan count as one inquiry. This lets you compare rates without worrying about multiple hits to your credit.

Found Unauthorized Inquiries?

If you spot inquiries you don't recognize, contact the credit bureau and ask which lender made the inquiry. Then call that lender to check if someone opened an account. If you suspect identity theft, tell the bureau immediately, dispute the inquiries, and request a credit freeze. File an identity theft report at identitytheft.gov to protect yourself.

What This Means for You

Watch your hard inquiries, but don't stress too much about them. Try to space out credit applications when possible, and use that rate-shopping window for big loans. Regular credit report checks will help you stay on top of things. And if you see something suspicious, act quickly - early action prevents bigger problems later.