Hard Inquiry
Definition
A hard inquiry is a lender checking your credit file because you have made a real application for credit. It is recorded on the file and can lower a score slightly for a short period.
The effect is usually small and temporary, and it fades well before the inquiry drops off the file after about two years.
Rate shopping is treated differently. Several inquiries of the same kind inside a short window are commonly grouped as one event, so comparing mortgage or auto offers is not penalised the way unrelated applications would be.
A soft inquiry, such as prequalifying or checking your own score, is not visible to lenders the same way and does not affect the score.