What Is a Hard Credit Check?
Besides applying for a loan or opening a new credit card account, there are other financial moves that will create a hard credit pull. Landlords or leasing managers may make a hard pull when you apply to rent a place. Turning on the utilities at a new home can also trigger a hard pull – the water company and the electric/gas supplier may require deposits from people whose credit report shows they’ve had trouble consistently paying bills on time. The same holds true when you sign up for a cell phone plan. Even renting a car might trigger a hard inquiry credit check if you pay with a debit card instead of a credit card.1
Each hard inquiry stays on your credit report for two years, but when FICO calculates your credit score, it only considers credit inquiries made during the last 12 months. And even during that first year the impact is typically small – generally about five to ten points.2 That’s a minor ding compared to other financial moves that can trigger a big credit score drop.
The reason a hard inquiry impacts your credit score is because you’re asking for credit in one form or another. Hard inquiries also serve as a heads up to businesses checking your credit. If they see multiple hard inquiries popping up over a few weeks or months, that can be a yellow flag that you may become financially overextended.
American Express’ application process means that you can apply for a U.S. personal credit card with confidence, knowing that simply submitting an application will not impact your credit file. A hard check will only happen once you’ve been approved and have formally accepted the card. If you apply for an American Express business card, however, a hard credit check will happen regardless of the application decision.