Every time you apply for new credit in Canada, whether it is a credit card, car loan, mortgage, or line of credit, the lender pulls your credit report to evaluate your application. This is called a hard inquiry. Hard inquiries affect your credit score and remain on your credit report for a period of time. Here is what Canadian borrowers need to know.
How Long Do Hard Inquiries Stay on Your Credit Report in Canada?
Hard inquiries stay on your credit report for 3 years at both Equifax Canada and TransUnion Canada. After 3 years, they fall off automatically. During those 3 years, lenders can see which institutions have pulled your credit and when.
How Much Does a Hard Inquiry Hurt Your Credit Score?
A single hard inquiry typically reduces your credit score by 5 to 10 points. This is a relatively small and temporary impact. However, multiple hard inquiries in a short period can signal financial stress to lenders, and the combined impact can be more significant.
If you have 5 or 6 hard inquiries from different types of lenders over 6 months, a lender reviewing your report might be concerned that you are desperately seeking credit, even if each individual inquiry was harmless.
Rate Shopping Is an Exception
When you are shopping for a mortgage, car loan, or student loan, you may apply with multiple lenders to compare rates. Canadian credit scoring models are designed to recognize rate shopping behavior. Multiple inquiries for the same type of credit made within a 14 to 45 day window are often grouped and counted as a single inquiry for scoring purposes.
This means you can get quotes from multiple mortgage brokers or auto lenders without destroying your credit score, as long as you do your shopping within a concentrated period.
Soft Inquiries Do Not Count
Not all credit checks are hard inquiries. A soft inquiry happens when you check your own credit, when a lender checks your credit for pre-approval offers, or when an employer does a background check. Soft inquiries do not affect your credit score and are not visible to lenders on your credit report.
You can check your own credit reports at Equifax Canada and TransUnion Canada as many times as you like without any impact on your score.
What Can You Do About Hard Inquiries?
Hard inquiries from legitimate credit applications cannot be disputed or removed before the 3-year window expires, unless they are fraudulent. If you see an inquiry on your report from a company you never applied to, that is a red flag for identity theft and should be disputed immediately.
To minimize the impact of inquiries, be selective about where and when you apply for credit. Each application should be intentional.
FAQ
**How long do hard inquiries stay on a credit report in Canada?** Three years at both Equifax Canada and TransUnion Canada.
**Do inquiries hurt my credit score in Canada?** Yes, but mildly. A single inquiry causes a small, temporary drop. Multiple inquiries in a short period can be more damaging.
**Can I remove a hard inquiry I did not authorize?** Yes. Unauthorized hard inquiries can be disputed with Equifax Canada and TransUnion Canada under PIPEDA. Provide any documentation you have that you did not apply to that lender.
If you have concerns about your credit report, call (437) 755-6579 for a free consultation.