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What is a Credit Enquiry?

Learn about credit enquiries, what they are and how they can impact your credit score right here with Savvy.

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Savvy Editorial Team
Savvy's content writing team are professionals with a wide and diverse range of industry experience and topic knowledge. We write across a broad spectrum of finance-related topics to provide our readers with informative resources to help them learn more about a certain area or enable them to decide on which product is best for their needs with careful comparison. Meet the team behind the operation here. Visit our authors page to meet Savvy's expert writing team, committed to delivering informative and engaging content to help you make informed financial decisions.
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, updated on December 22nd, 2023       

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Written by 
Savvy Editorial Team
Savvy's content writing team are professionals with a wide and diverse range of industry experience and topic knowledge. We write across a broad spectrum of finance-related topics to provide our readers with informative resources to help them learn more about a certain area or enable them to decide on which product is best for their needs with careful comparison. Meet the team behind the operation here. Visit our authors page to meet Savvy's expert writing team, committed to delivering informative and engaging content to help you make informed financial decisions.
Our authors
, updated on December 22nd, 2023       

Fact checked

At Savvy, we are committed to providing accurate information. Our content undergoes a rigorous process of fact-checking before it is published. Learn more about our editorial policy.

Are you looking into getting a loan but are wondering what a credit enquiry is and how it works? It’s essential to know how these checks function and what they mean for your credit file when you apply for a small loan, so find out all about them right here in Savvy’s comprehensive guide.

What is a credit enquiry?

A credit enquiry occurs whenever an organisation accesses your credit report. This happens when you apply for a loan (such as a small loan), credit card, phone contract or rental lease. The enquiry reflects the organisation's interest in assessing your creditworthiness before making a lending decision and marks the date of your application.

There are two main types of enquiries:

  • Hard enquiries: these are listed on your credit report and occur when you formally apply for credit, triggering lenders to perform a detailed credit check. Multiple hard enquiries in a short period can slightly lower your credit score, but responsible borrowing practices can mitigate this impact.
  • Soft enquiries: these are generally invisible to lenders and don't affect your credit score. They happen when you check your own credit report or seek pre-approval for loans without formally applying.

How long will an enquiry stay on my credit file?

Hard credit enquiries will remain on your credit report for five years. However, their impact on your credit score diminishes over time, especially if you demonstrate responsible borrowing habits like making timely payments. Lenders often will focus on enquiries within the six to 12 months immediately before your enquiry, so those from three or more years ago are unlikely to carry much weight when it comes to assessing your application.

How will an enquiry affect my credit score?

A credit enquiry in itself will tend to have a minimal or no impact on your score. However, multiple hard enquiries within a brief window are likely to impact your score negatively. This is because lenders may view these frequent loan applications as desperate and label you as a potential borrowing risk as a result. For this reason, submitting repeated credit enquiries can be detrimental to your chances of loan approval in some cases.

It's important to note that there are other factors which can have a greater bearing on your score, such as your repayment history and how reliably you’ve paid your debts on time and in full. Once a hard enquiry is removed from your file or becomes older, you may see the negative effect on your score decrease.

What information is included in a credit enquiry?

Each hard credit enquiry for a small loan records a specific set of information, including the following:

  • The date of enquiry: when you submitted your application or the enquiry was conducted by your lender
  • The name of the organisation: who your lender is that’s checking your credit report
  • The amount you’ve applied for: how much you’re looking to borrow
  • The type of credit: in this case, a small loan
  • Your application number: the number assigned to your application by your lender

Common questions about credit enquiries

Is there such a thing as too many credit enquiries?

There’s no specific number which constitutes too many enquiries. While occasional enquiries are normal, a sudden flurry of hard enquiries in a short time (such as two to three months) can raise eyebrows for lenders. It isn’t necessarily “too many”, but it might suggest you're seeking credit aggressively, possibly increasing your risk profile in their eyes. However, balanced with responsible borrowing habits like timely payments, the impact often diminishes in the coming months and years. You may still be able to access emergency cash loans if your credit score isn’t the best, though.

Am I able to remove credit enquiries from my file?

No – there’s no way of removing a legitimate hard enquiry from your file before it disappears after five years. The only way to have enquiries removed is if they aren’t legitimate or are there by mistake.

What should I do if there’s a mistake on my credit file?

If you find credit enquiries on your file which shouldn’t be there, it’s important to follow up with your lender or other organisation and request they be removed. If this doesn’t work, you can put in a request for this to be removed with your credit reporting agency (such as Equifax, Experian or Illion).

Do credit repair companies help remove credit enquiries?

Credit repair companies may be able to help you improve your credit file and score by picking up on errors you might have missed. However, they won’t be able to remove any legitimate enquiries from your file in the process of “repairing” it.

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The information on this website is of general nature and does not take into consideration your objectives, financial situation or needs.

For loans between $2,050 and $5,000, the APR is between 21.24% (minimum) and 48% (maximum) per annum. Comparison rate of 65.4962%. Minimum term is 16 days and maximum term is 24 months. The cost of the loan is a $400 establishment fee and monthly interest charged on the amount borrowed. For example, a loan of $3,000 over 3 months with an APR of 48%, (comparison rate of 65.4962%), will have an establishment fee of $400, monthly repayments of $1,225.20. Total repayments of $3,675.60 and total interest payment of $275.60.

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