We use cookies to improve security, personalize the user experience,
enhance our marketing activities (including cooperating with our marketing partners) and for other
business use.
Click "here" to read our Cookie Policy.
By clicking "Accept" you agree to the use of cookies. Read less
A credit inquiry refers to the examination of an individual's or business's credit history. This process is typically conducted by financial institutions or credit agencies when a person or a business applies for credit. There are two main types of credit inquiries: hard inquiries and soft inquiries. Hard inquiries occur when a lender checks your credit report as part of their decision-making process for a credit application, while soft inquiries are performed for purposes like account reviews or tenant screenings. It's important to note that hard inquiries can negatively affect your credit score.
Table of content
Legal Use & context
Credit inquiries are commonly encountered in various legal contexts, particularly in financial and consumer law. They play a significant role in the credit application process, impacting loan approvals and interest rates. Users can manage their credit inquiries through legal forms and templates provided by platforms like US Legal Forms, which can help them understand their rights and responsibilities in these situations.
Key legal elements
Real-world examples
Here are a couple of examples of abatement:
Example 1: When applying for a mortgage, the lender conducts a hard credit inquiry to assess the applicant's creditworthiness. This inquiry may slightly lower the applicant's credit score.
Example 2: A landlord performs a soft credit inquiry to evaluate a potential tenant's credit history without affecting their credit score. (hypothetical example)
State-by-state differences
State
Hard Inquiry Regulations
Soft Inquiry Regulations
California
Requires explicit consent for hard inquiries.
Permitted without consent for account reviews.
New York
Must notify the applicant before a hard inquiry.
Allowed for tenant screenings with written consent.
This is not a complete list. State laws vary and users should consult local rules for specific guidance.
Comparison with related terms
Term
Definition
Key Differences
Credit Report
A detailed report of an individual's credit history.
A credit inquiry is part of the process of obtaining a credit report.
Credit Score
A numerical representation of creditworthiness.
Credit inquiries can affect the credit score but are not the score itself.
Common misunderstandings
What to do if this term applies to you
If you have concerns about credit inquiries affecting your credit score, consider the following steps:
Review your credit report to identify any hard inquiries.
Limit the number of credit applications you submit within a short period.
Use US Legal Forms to find templates that can help you manage your credit inquiries effectively.
If you believe an inquiry was made in error, contact the creditor or a legal professional for assistance.
Find the legal form that fits your case
Browse our library of 85,000+ state-specific legal templates.