A hard inquiry occurs when a lender checks your credit report to make a lending decision, such as when you apply for a loan or a credit card. This type of inquiry can impact your credit score, typically lowering it by a few points. Hard inquiries remain on your credit report for about two years. Unlike soft inquiries, which do not affect your credit score and occur during background checks or pre-approval processes, hard inquiries signal that you are seeking new credit. It's important to manage hard inquiries carefully, as too many in a short period can suggest financial distress to lenders.