What’s the Difference Between a Hard and Soft Inquiry?

Quick Answer

A hard inquiry occurs when a lender accesses your credit file to help decide whether to approve you for credit. A soft inquiry happens when you or someone else checks your credit unrelated to a specific credit application.

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Along your financial journey, there's a good chance a business or service provider will check your credit. Credit inquiries are essential to the credit evaluation process because they help lenders understand your financial history and the likelihood that you'll follow through on a financial commitment.

Credit inquiries fall into two categories: hard inquiries and soft inquiries. While the two types of inquiries have some things in common, they have important differences. Read on to learn more about hard and soft credit inquiries and the best ways to protect your credit.

What Is a Hard Credit Inquiry?

When you apply for credit, such as loans or credit cards, lenders will request information from one or more of the three consumer credit bureaus (Experian, TransUnion and Equifax) to assess your creditworthiness. A hard inquiry, also called a "hard pull," is when a lender accesses your credit file to help decide whether to approve you for a loan or line of credit.

The most common scenarios in which you can expect a hard inquiry include:

  • Applying for a new credit card: Each credit card application will result in a hard inquiry.
  • Purchasing or leasing a car: Whether you're getting a loan from a bank or dealership to buy a car, or you're leasing your car, you can expect a hard inquiry.
  • Buying a house: When you apply for a mortgage, the lender will do a hard pull on your credit.
  • Applying for a personal loan: As with other lenders, personal loan lenders will do a hard credit pull when you formally apply for the loan.
  • Renting or leasing an apartment: This could be a hard pull or soft pull; check with the landlord or leasing company to know for sure.

Do Hard Inquiries Affect Your Credit Score?

Hard inquiries can impact your credit score, though usually minimally and for a short period of time. Each hard inquiry can cause a slight drop in your credit score, typically less than five points. Hard inquiries stay on your credit report for two years but will affect your score for less than a year. While they're on your credit report, they are visible to anyone who checks your credit.

A single inquiry will not do serious damage to your credit score; however, it's still a wise move to limit the amount of hard inquiries on your credit report. But if you're considering buying a home or making another sizable financial commitment, the best course of action is limit your credit applications for several months.

Once you start rate shopping for a loan such as a mortgage or car loan, multiple inquiries within a specific period (usually 14 to 45 days) for the same purpose are counted as one inquiry by credit scoring companies. This process reduces the impact on your credit so you can compare rates to find the best loan options for you. Keep in mind, however, that inquiries related to credit card applications are not treated the same way: Each credit card inquiry will appear individually on your credit report.

What Is a Soft Credit Inquiry?

While lenders do hard pulls to decide if they want to lend you money, a soft inquiry happens when someone checks your credit unrelated to a specific credit application.

A soft credit inquiry, or soft pull, can happen for several different reasons, including:

  • Checking your own credit: Viewing your own credit report generates a soft inquiry.
  • Loan preapproval: Some lenders may do a soft pull when you are seeking loan preapproval as part of the rate shopping process.
  • Preapproved offers: A company may pull your credit to see if you qualify for a promotional offer.
  • Employment background checks: Employers may perform soft inquiries as part of their pre-employment screening process.
  • Requesting utilities: When you apply to set up a service at a new address, the utility companies might check your credit.

Do Soft Inquiries Affect Your Credit Score?

Unlike hard credit inquiries, soft credit pulls do not affect your credit score. This is because soft inquiries are generally used for informational purposes, not loan-related decisions.

How Long Do Inquiries Stay on Your Credit Report?

Both types of inquiries appear on your report for up to two years, but understanding their differences is crucial in maintaining good financial health.

Soft inquiries don't impact your credit score. On the other hand, hard inquiries can decrease your score by a few points—or more if there are many different types of inquiries in a short period of time. A hard inquiry will impact your score for less than a year.

How to Minimize Credit Inquiries

While a hard inquiry will rarely if ever be the sole reason you're denied credit, it's still important to be mindful of the number of hard inquiries that appear on your credit report. Here are some ways to avoid too many hard inquiries:

  • Get prequalified. Take advantage of prequalification offers before formally applying for credit. Prequalification typically involves a soft credit inquiry and provides an idea of your eligibility without affecting your credit score.
  • Use the rate shopping window. When shopping for a mortgage, auto loan or private student loan, research and apply within a specific timeframe (within a two-weeks period if at all possible) to ensure multiple inquiries are treated as a single inquiry, minimizing the impact on your credit score.
  • Limit new credit card applications. Avoid applying for new credit cards frequently. Each new credit application can result in its own hard inquiry and potentially lower your credit score.
  • Monitor your credit. Regularly review your credit reports to ensure accuracy and identify any unauthorized inquiries or potential fraud. You can get free credit monitoring from Experian and receive alerts anytime there are changes to your Experian credit report.

The Bottom Line

A solid understanding of hard and soft inquiries is critical for maintaining a healthy financial profile. Hard inquiries can impact your credit score negatively for up to a year and remain visible on your report for up to 24 months, while soft inquiries don't affect your score. By taking proactive measures to minimize hard inquiries, like applying for new credit only when necessary, getting preapproved and comparing options before submitting applications, you can better safeguard your financial well-being.