A Hard Inquiry or Hard Pull is a standard credit check process when applying for a loan or any other type of borrowable money. It is an assessment of the creditworthiness of an individual or entity by a lender or creditor and involves a check of the individual’s or entity’s credit history. Examples of such a hard inquiry include applications for mortgages, auto loans, credit cards, leases, personal loans, and other forms of lending.

The key element of a hard inquiry is that lenders or creditors perform a full financial review of an individual or entity as a requisite prior to granting approval on any lendable money. This usually entails an evaluation of the individual’s or entity’s credit score and other factors like debt to income ratio, housing expense ratio etc. to determine the applicant’s ability to responsibly handle borrowed money. This forms an important part of the loan approval process, as it is necessary for lenders and creditors to safeguard the financial interests of their customers.

It is important to note that hard inquiries can have an adverse effect on a credit score. Whenever a lender or creditor executes a hard inquiry of an individual or entity’s credit, it causes a short-term ‘hit’ to their credit score. This credit score dip typically lasts only a few months, depending on how many inquiries have been performed and how frequently they were done. It is recommended to avoid multiple hard inquiries in a short period of time as this could significantly affect an individual or entity’s credit.

In conclusion, a hard inquiry is an essential step taken by lenders and creditors when extending credit and borrowable money, and forms an important part of decision making to ensure the solvency and responsibility of the borrower. Hard inquiries can have a short-term impact on an individual or entity’s credit, however it is important to take into consideration the long-term benefits of responsible borrowing.