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Impact of a Credit Inquiry

Impact of a Credit Inquiry

Credit3 min readFebruary 11, 2026
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Credit inquiries cause significant concern among mortgage borrowers, often disproportionately so. In Canada, Equifax and TransUnion distinguish two types of inquiries: soft pulls and hard pulls. A soft pull does not affect the credit score and occurs when a consumer checks their own file, when a lender performs a no-commitment pre-approval, or when an employer checks a candidate's credit. A hard pull, however, is recorded on file when a consumer applies for credit (mortgage, credit card, auto loan). Each hard inquiry can temporarily reduce the score by 3 to 10 points. A little-known but crucial fact: Canadian credit agencies bundle mortgage-related inquiries made within a 14-to-45-day window into a single inquiry for scoring purposes. This mechanism, designed to allow rate shopping, means a borrower can consult multiple lenders or mortgage brokers without a cumulative impact on their score. AMF-certified mortgage brokers in Quebec must inform their clients of this reality to dispel unfounded fears.

Impact of a Credit Inquiry on Your File

One of the most common concerns among mortgage borrowers is the impact of credit inquiries on their score. This topic is surrounded by myths and misconceptions that sometimes prevent consumers from shopping around for their mortgage rate, a mistake that can cost them thousands of dollars in interest over the life of their loan. Understanding how credit inquiries actually work in Canada is essential for every borrower and for AMF-certified mortgage brokers in Quebec.

Soft Pull: No Impact on Your Score

A soft pull is a check of your credit file that is not related to an official financing application. At Equifax and TransUnion, the two credit agencies operating in Canada, soft pulls are invisible to lenders and have no effect on the credit score. They include personal checks of your own file (free once per year by mail from each agency), employer background checks during a hiring process, promotional pre-approvals sent by financial institutions, and background checks performed by insurance companies.

Hard Pull: Real but Limited Impact

A hard pull occurs when you authorize a lender to check your credit file as part of a financing application. Each hard inquiry can reduce your score by 3 to 10 points, a relatively modest impact that gradually fades over a 12-month period. Hard pulls occur with mortgage applications, credit card applications, auto loan applications, line of credit applications, and credit limit increase requests. The hard inquiry remains on file for 3 years at Equifax and 6 years at TransUnion, but its effect on the score is mainly concentrated in the first 12 months.

Mortgage Inquiry Bundling

A crucial and often overlooked feature of credit scoring models used in Canada is the rate-shopping window. Equifax and TransUnion recognize that a consumer shopping for a mortgage will typically consult multiple lenders. Hard inquiries related to mortgage products made within a 14-to-45-day window (depending on the scoring model used) are counted as a single inquiry for scoring purposes. This mechanism protects borrowers who compare offers from multiple financial institutions or who work with a mortgage broker who submits the application to several lenders. It is therefore in the borrower's interest to concentrate mortgage-related steps within a short period rather than spreading them over several months.

Practical Tips for Borrowers

  1. Concentrate your shopping: Complete all your mortgage pre-approval applications within a 14-day window to benefit from inquiry bundling.
  2. Avoid simultaneous credit applications: Do not apply for a credit card or auto loan at the same time as your mortgage application. These inquiries are not bundled with mortgage inquiries.
  3. Check your file regularly: Review your credit file for free at least once per year from Equifax and TransUnion. This check is a soft pull with no impact.
  4. Work with a mortgage broker: An AMF-certified broker in Quebec can compare offers from multiple lenders with a single hard inquiry, maximizing your negotiating power while minimizing credit impact.

In summary, credit inquiries should never prevent a borrower from shopping for their mortgage rate. Inquiry bundling, combined with the modest impact of each hard pull, means that comparing offers carries no significant risk to your score and is a responsible financial practice that can generate substantial savings.

Frequently Asked Questions

Does a credit inquiry lower my score?
Only a hard pull affects your score. The impact is generally 3 to 10 points and temporary, lasting about 12 months. Soft pulls, such as checking your own file, have no effect on your score.
Can I shop for mortgage rates without affecting my credit?
Yes. Equifax and TransUnion bundle mortgage inquiries made within a 14-to-45-day window into a single inquiry for scoring purposes. You can compare multiple lenders without cumulative impact. The key is to concentrate your efforts within this window.
What is the difference between a soft pull and a hard pull?
A soft pull is invisible to lenders and does not affect the score. It includes personal checks, non-binding pre-approvals, and employment verifications. A hard pull is visible to lenders and temporarily reduces the score. It occurs with an official credit application.
How long does a hard inquiry stay on my file?
At Equifax Canada, hard inquiries remain on file for 3 years. At TransUnion, they stay for 6 years. However, their impact on the score diminishes significantly after 12 months and generally becomes negligible after 2 years.
Does my mortgage broker need to do a hard inquiry?
For an informal pre-qualification, a soft pull may suffice. For an official mortgage application, a hard pull is required. AMF-certified mortgage brokers in Quebec must inform you of the inquiry type before proceeding, in accordance with the LDPSF.

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Educational information only. This does not constitute financial advice under the Act Respecting the Distribution of Financial Products and Services (LDPSF). Consult an AMF-certified mortgage broker before making any financial decision.

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